Every business takes money to start and get off the ground. This is a simple reality for all people who want to start a business.
At the same time, it’s extremely important to avoid all the pitfalls of going into too much debt right from the beginning. Debt can be the death of a business, especially when the owner takes on too much debt before they’ve even made a sale.
As Brian Colpak says, there are ways that business owners can start a new company without going into too much debt. Here are a few tips for doing so.
Don’t Start Too Fast
While you may want to launch your business as soon as possible, it might not be the smartest financial decision — depending on your situation.
Create a detailed budget that includes all the expenses you’ll have to take on in order to launch your business. Then, compare that with the funds you have on hand to pay for those expenses.
If you can’t cover the expenses with the money you have, consider stretching out the date of your launch. In the meantime, you can work on refining your business plan while you build up your cash reserves.
Have Other Income
Along these same lines, you should consider keeping your current job while you’re in the process of starting your new business. This will ensure that you have a consistent income that can help fund your business startup without the need for loans.
At the same time, it’ll allow you to mitigate your financial risk by not throwing all your eggs into one basket.
Search for Grants
Outside funding doesn’t always have to come in the form of a loan. There are grants available to help people start new businesses.
Some of these grants are available through the Small Business Administration and may not need to be paid back. You can also explore other funding options, such as crowdfunding sites.
Select a Business with Low Startup Costs
One great way to avoid taking on too much debt is to start a business that doesn’t require a lot of upfront capital. Online businesses are a great option for many people.
If you’re selling products, you can start online and build your brand before you try opening a retail store. Your overhead will be significantly less online than it will be in a brick-and-mortar store. Some of your typical expenses such as marketing may even be free — and more effective — if you harness the power of social media.
Hire Help Only When Needed
Brian Colpak understands that entrepreneurs may have a bold vision for how to staff their company. But, it’s also important to keep your dreams in check and have realistic expectations.
Hiring employees is a great way to accelerate your growth, as you will have more hands to help. At the same time, employees are a huge cost to any business.
You can avoid taking on too much debt by starting small, either doing everything yourself or hiring one person to help. Then, as your income grows, you can grow your staff with proper planning.
About Brian Colpak
Brian Colpak is a tech entrepreneur and the founder of Continental Global. After spending most of his career in managerial positions, he founded and led a company that was recognized as one of the top 100 fastest growing companies in Massachusetts before starting his current company. These days his main focus is on an upcoming project in Dubai.