Starting Your Own Business – How to Clear the Financial Hurdle
Many of us have dreamt, at one time or another, of opening our own business. The freedom of being your own boss, the thrill of making your own mark in your industry and the obvious financial benefits are more than enough to inspire us to consider escaping the rat race.
Starting your own business is an extremely alluring concept, particularly at a time when resources and supply pathways enable even the smallest of side hustles to become a full-sized and hugely profitable private endeavour. But entrepreneurship can be a costly thing – and, unavoidably, any new business requires money to get off the ground. With this in mind, what are some routes you can take in order to clear the key financial hurdles between you and your ideal business?
Setting Clear Goals
The first step you should take is to set some clear goals, financially speaking. Put simply, you need to know exactly how much money you need upfront, and for the first 12 months of your business, in advance of starting operations. This requires you to understand some fundamental things about the prospective size of your business, and early metrics for projected performance and profitability.
As such, you will need a robust business plan that details your anticipated financial figures for the first year of operation, and the funding you’ll need to get there. Having this information to hand, and in an easily digestible format, can make it much easier when you come to approaching lenders.
Save, Save, Save
Smaller start-ups may not need conventional loans or investments to begin, though; many are started with personal finances, particularly those that fall under the bracket of sole traderships as opposed to limited companies. You may be able to generate the initial capital you need through savings, necessitating a dedicated savings account to hold your self-sourced seed funding. This might also inspire you to reckon with your personal finances with regard to expenditure. Are there any places you can cut back to maximise savings?
Your seed funding would be used to buy equipment, premises, and staff in the event of proper incorporation as a limited company – but in the meantime, you may be able to get a foot in the door via a smaller iteration of your business concept. Freelancing in your niche could help you network, as well as help you generate early funding to re-invest in your own expansion.
Finally, and as a general rule, you should seek out independent and professional financial advice where you can. Starting a business is a multilateral endeavour, and not a simple one; advice could help you with tax, financial structuring or even simply finding the right kind of loan. This, along with the above steps, can help you on your journey to start-up entrepreneur.