*This is a guest post written by Lisa Walker of https://neighborhoodsprout.org
You need money to make money, or at least that's what the adage says. But while money certainly makes it easier to start a business, you don't have to be independently wealthy to become an entrepreneur.
Whether you're saddled with student loans, crippled by credit card debt, or mired in medical bills, it's possible to overcome financial setbacks and start a business.
Prepare your Finances for Entrepreneurship
High debt payments make it difficult to maintain the cash flow you need to build a business. There are a few strategies you can use to get debt under control before starting a business, including:
Cutting expenses to put extra money toward debt payments.
Consolidating or refinancing loans to secure new payment terms and a lower interest rate.
Putting federal student loans on an income-driven repayment plan.
Transferring credit card balances to a 0% APR credit card.
Negotiating a lower interest rate or settlement with creditors.
Requesting financial assistance or charity care for hospital bills.
Entrepreneurs also need a healthy emergency fund to weather the financial uncertainty of starting a business. While experts recommend most people maintain a three- to six-month emergency fund, prospective entrepreneurs should set aside enough to cover six to 12 months of expenses.
Consider Keeping your Day Job
These strategies work, but they take time. If you can't wait to start a business, launch your start-up while working full- or part-time. A stable job lets you maintain the cash flow you need to pay debts while starting a business. It also makes it possible to self-fund your startup so you avoid taking on even more debt.
Protect Personal Credit from Business Debts
Speaking of funding: the way you structure and finance your business could negatively impact your personal credit if you're not careful. Since it's hard to secure traditional bank loans with no track record, many first-time entrepreneurs lean on credit cards and personal loans for startup expenses. This isn't only expensive, it also threatens your personal finances if the business fails.
Avoid mixing business and personal finances when starting a business. Establishing a limited liability company lets you apply for credit under your business's name so that if things go sideways, only the business is affected. LLCs are much simpler to form than other types of business entities too. In Florida, for example, you only need to pick a name, appoint a registered agent, and file paperwork. Formation services make this easy with state-specific paperwork and templates you can fill in.
If you’re looking into credit repair based on your financial situation, it’s really important to compare several companies. This can seem like a complex or confusing process for some. However, there are a great number of resources on credit repair that can help you to. See what they offer so you can determine which will work for your specific needs.
Spend Wisely When Starting your Business
You've worked hard to start your business on a strong financial footing, so don't throw it all away by overspending. While some costs are essential to start and grow your business, spending in the wrong places could cripple your business before it takes off.
Wait to invest in office space and top-of-the-line equipment when starting a business or hiring personnel. Instead, focus your early spending on building your business's brand and creating efficiency with software and apps.
Branding is especially important in the early days. Branding photography, graphic design, social media marketing, and other branding expenses might feel frivolous when your business has yet to make a name for itself, but the truth is, branding is how your business builds a reputation. Branding builds trust and makes your business recognizable so it's easier to acquire your first customers.
Final Thoughts
You've been dreaming up your business idea for years, so it's worth doing it right. Rather than jumping head-first into entrepreneurship, prepare your finances for the challenges and triumphs of small business ownership. With a solid financial foundation and a strong brand with the help of Yanitza Ninett, you can start a business that's built to last. It’s time to put your best foot forward. Book Yanitza today!
Like it? Pin it! Share it!
Featured Posts
Fall and Holiday Mini Sessions in Orlando
Mommy and Me Mini Sessions in Orlando
How Traveling Influences my Photography
11 Instagram-worthy Photo Spots that you Can Find Anywhere
5 Tips for Creating a Concept Photoshoot
Valentine's Mini Sessions in Orlando
Photoshoot in Downtown Sarasota: Tips for Pictures on a Sunny Day
