Have you decided to leave your nine to five job and be your own boss? Before you start drafting your resignation notice, take time to reflect on whether you have enough capital to start a business.
According to the Small Business Administration, you need at least $3,000 in the bank to finance a microbusiness. If your savings are nowhere near that figure, don’t worry. There are numerous ways you can save up for starting a business. Let’s take a look at few things that will get you started:
- Deal with your debt
Loans and other obligations are a major hindrance to saving up for a business. Start by paying your debt on time to avoid penalties. You may have to make sacrifices in your lifestyle, but eliminating debt allows more room for saving. You just need to commit to a daily budget and avoid needless spending.
- Use personal finance apps
Tracking your expenses is important if you want to get as much financing for your business idea as possible. However, the process can be tedious and there’s always the risk of inaccuracy. Thankfully, there are a number of personal finance apps that will help you monitor your spending. There are also apps that allow you to automatically transfer a portion of your salary to a savings account. That way, you can spend as much as you want without slowing down your goals.
- Find the best deals
Cutting back on your daily expenses doesn’t need to be difficult. You just need to be strategic with your finances. For this, you need to have a nose for finding the best deals on food, gas, and other essentials. If you are shopping for clothes, take advantage of seasonal sales. In case you want to spend less while eating out, look for vouchers and coupons for freebies and discounts. Check out sites like Yo! Free Samples if you are on the hunt for promotions and deals from the best brands.
- Find investors
If keeping to a budget isn’t enough to help you finance your business, you can always reach out to people you know who might be interested to invest. Whether it’s a retiring uncle or your old college roommate, try to pitch your idea and see if they can become your business partner. This strategy is ideal if you want to start a business quickly or if you have too many obligations to cover.
- Get a loan
Apart from investors, consider applying for loans. Your options include small business loans, microloans, and invoice factoring. However, in order to qualify for most of these loans, you need a credit score of at least 700, but 500 is fine if you are okay with getting minimum financing. Just make sure you deal with certified and legitimate lenders. If you find a loan deal with terms that are too good to be true, make sure to conduct a background check on the provider.
Building a business takes time, but so long as you follow the right strategies, accomplishing that goal is good as guaranteed!