Hi reader’s, I wanted to talk to you about how to fund a new business that you want to start. CloudBooks can be one of the best examples of startup and after the success of CloudBooks, I can help to other startups by giving some tips. One of the ways to fund that business is to try to keep down the amount of money that you actually need to start it, that’s obviously the easiest way. I’ve got up here, minimise your startup costs. Sometimes that’s the choice of the type of business that you go with. Oftentimes, service businesses are much less expense to start up front, because you don’t need a lot of stuff.
If you’re a product based business you may need inventory, and equipment, vehicles, and so forth, and that all adds up quickly, as well as, often a larger facility. Those costs can be a lot more that you need to fund, and it becomes very difficult to do it. Especially, in a climate where business loans are hard to get.
One of the ways is to try to hold down those startup costs by choosing a business that doesn’t require a lot up front, or perhaps it’s something you’ve been involved in on a part-time basis already, and you’ve already acquired some of those assets. That will help to hold those startup costs down too. The second way is to think about outsourcing. When we talk about outsourcing that doesn’t necessarily mean ship the jobs overseas. There are plenty of individuals in the local area, in your own city or town, or throughout the United States to outsource your work.
Outsourcing is a way to take and place secretarial services outside, marketing services, accounting services. You can have other people doing those things for you on an as-needed basis. Especially in the early going when you don’t have a lot of business generated yet, so you don’t really to bring the employee on and incur all of those costs. Later on, once your business is flying, then it will be time, perhaps, to bring some people on board. Then you’ll incur those employee costs, benefits costs, and so forth. At the get-go in order to keep those startup costs as low as possible, outsourcing lets you use it as you need it.
Part-time, another way to minimise the money that you need or the funding that you need to do your business is to start out slow, start our part-time. Many a business was started while an individual was working for another company, either during the day or in the evenings. Then taking the other free time that they had, and getting their business off the ground and going, because you already have a paycheck coming in. Your startup business doesn’t need to generate so much money that it can provide a salary for you yet. It’s a very, very safe way to get started, as long as you respect your current relationship with your employer, and you don’t violate it while trying to get your own business up and running.
The fourth way is to strike a deal, perhaps with your current employer, or someone else that you know needs some services. Sometimes current employers will say, yeah you want to start your own business that’s fine, but I still want to work with you. In fact, I think you’re such a good employee, and you’re so valuable to us, we’ll provide some office space for you here, and some of the supplies, and other things that you need, if you’re willing to do our stuff for a while, in addition to other people’s work.
It could be with your current employer, it could be with another company that you know of that’s willing to trade you some space and services, and so forth, in exchange for doing some work for them. Striking a deal with somebody can be a good way to hold those costs down and get started.
One that’s often most overlooked is saving up for it. A lot of people have trouble setting money aside to do something. If you know that you want to start a business down the road, you may have been setting some money aside that you can tap for that purpose.
An alternative is to look at retirement plans, lots of people have retirement plans out there. It may make sense to draw money out of the retirement plan to invest in a startup business of your own because that business could grow to be a very significant retirement asset for you one day when you sell it. There’s a lot of tax and non-tax issues to why you might, or might not want to do that, but certainly, however much you can save for it makes a lot of sense.