What do most people think about when they plan to get into business? Do I have enough money to start? Can I quit my job to concentrate full time? Will I be able to cover my monthly expenses?
When the time comes to actually launch your business you must have done your homework regarding your business startup funding needs. You need to be prepared so that if the opportunity to accelerate your launch presents itself, you’re ready. There are some things that if not considered carefully can undermine your chances of success.
Assess Your Personal Finances
Before you quit your job and pursuing your million-dollar idea it is a good idea to see if your financial health is in good shape. Take out your bank statement and review all of your personal expenses. Find all the frills and eliminate them.
It’s tough to do, but if you’re really committed to getting this business of the ground you need to reduce your personal expenses. You don’t want to start out already in debt.
Taking control of your business startup funding doesn’t mean you have to quit enjoying life. You just have to prioritize for now. Skip the night show and catch a matinee instead. If you’re going out for dinner, clip a 2 for 1 coupon or go to the early bird. Hold off on that tropical vacation for one year.
Evaluate Your Business Expenses
Another element of business startup funding is your minimum business expenses. You want to get into business with a working knowledge of your expenses. They can become very overwhelming very quickly. You must analyze what those are and factor them into your business startup funding needs.
Do the Math
Sum up your personal and business monthly expenses. To launch a successful business you need to have at least six months of cash in the bank OR an alternative source of affordable capital. Many people won’t have 6 months cash to cover their business startup funding needs. If this is you, you will need to find, or keep, a job.
Securing adequate business startup funding is one of the most challenging aspects of launching a small business. You don’t want to minimize its importance though. Inadequate business startup funding is at the root of many business failures.
Do what you need to do now, in order to do what you want to do in the future. Having enough business startup funding means conserving your cash mercilessly. You have to know where your money is going and have enough to cover 6 months of expenses.