Starting a business is exciting, but expensive. Consequently, it may seem impossible to do without borrowing money. However, going into debt can limit your options and increase your expenses.
After all, by pursuing venture capital, you commit yourself to the requirements of investors who may not share your priorities. Additionally, if things don’t go as planned, you may have to relinquish your business.
For these reasons, bootstrapping is a better approach. By paying as you go for your new venture, you keep costs under control. Also, you stay in complete control over your operation. The following tips will help you start a business without accruing debt.
Your desire to be your own boss might make you eager to quit your regular job. Be patient. By maintaining a dependable income, you can bootstrap your business while keeping your personal life stable. If you work for your employer during the day, spend time at night and on the weekend working for yourself.
Ideally, as time passes, you will build your customer base and start generating an adequate income from your business. Only after this happens should you consider quitting your job.
Some businesses may require a substantial amount of money before you can try to get customers. Rather than borrowing startup money, look for creative ways to start small. For instance, if you want to open a parking garage, you could start by operating a car storage business on a smaller scale.
Similarly, if you want to sell apparel, you could open a store online using Etsy or eBay to avoid the cost of leasing a physical storefront. Of course, as you accumulate enough money, you will have the opportunity to scale your business, without going into debt.
Work from Home
Having an office with the name of your business on the door can make your business look and feel legitimate. Unfortunately, the cost of office space can easily overwhelm your financial resources. Rather than borrowing money to pay the lease, use the space that you already have.
Simply put, your customers will probably care more about the goods and services that you deliver than the quality of your workspace. So, a home-based business can minimize your operational costs, freeing your limited resources for equipment, marketing, and other necessities.
Many people can’t work from home due to noisy neighbors, lack of space, or other limitation. You still have options if this applies to you. For instance, you could rent space at a co-working facility. There, you’ll have access to many of the same amenities as a standard office at a fraction of the cost.
When you finally have to acquire a dedicated facility for your venture, you should cut costs by shopping for used or discount office furniture.
Scale Your Team
You can expect to need help staffing your business. However, human resources can bust your budget. Again, your best option is to start slowly. Although you might want to have separate marketing, public relations, human resources, and sales departments, you can get by with less.
So, rather than hiring a large team, start with one or two people who share your vision. As your business grows, you can add additional talent to share the workload. This approach will help you keep your expenses aligned with your profits.
In addition to adding stability to your business, scaling your team can help you build a solid reputation as an employer. Quality candidates will avoid you if they think you won’t keep them for long.
In summary, you should do everything possible to start your business without accruing debt. Although using the above tips may require time, patience, and effort, they will help you make your dreams come true without the cost and uncertainty that comes with borrowed money.