“The world we live in today is run by mega-corporations, ultra-successful entrepreneurs and internet gurus who invested all their time, money and efforts in entrepreneurship. All the products that we use in our homes, in restaurants and even in the offices are all a result of someone who sacrificed their savings and decided to risk it in a business.”
— Marco Carbajo
Saving money, according to Napoleon Hill, is the foundation of all financial success, including investing. The ability to save money is the starting point of building wealth.
In order to fund your own business, you have to overhaul your saving habits and get a better grip on your financial situation. Here are some ways to get the ball rolling.
- Invest In Interest-Bearing Accounts
It is good to keep your money in an interest generating account for some time while carrying out feasibility study on your proposed business or when considering the need for business expansion. Interest bearing investments include your bank account, a certificate of deposit, or any other kind of investment in which you receive interest from the principal.
- Start Budgeting
Budgeting is an important part of any business, so if you haven’t started a budget yet, this is the time. Without a budget you may not know how your business is performing. A budget provides an accurate picture of expenditures and revenues and can help drive important business decisions.
- Minimise Costs
When starting a business, you must bear in mind the need for cost minimization. Buy used equipment instead of new ones. One mistake many young entrepreneurs have been doing is starting a business with brand new equipment or machines. This is not the way to go. It is expensive for you considering the fact that you do not have a lot of money to play around with. Without conserving cash flow, businesses would rarely grow. Also, buy goods or office supplies in bulk because such purchases always attract large discounts.
- Get Rid Of Your Debts
F. Jimoh, advising on how to get rid of your debts, says: “Debt is a fatal enemy of savings. The man bound in the slavery of debt is as helpless as the slave bound by ignorance, or by actual chains. Debt has a tendency to draw its victim deeper and deeper into the mire.” It is important to start your business on a clean slate, this way you can focus more on the profits being generated. When you get rid of debt, you’ll feel like you got a raise. Suddenly all of that money that was going towards repaying a debt can be put towards running your business.
- Re-Invest Your Profits
While your natural inclination is to start spending the money you make from your new business, it’s a much more sound practice to reinvest your profits. This will allow you to continue growing without needing to take on debt.
- Start Small
We have seen people go into the business with both feet and succeeded. However, for those with little capital, the best way to start a business is to go slowly.
Start your business in accordance with your financial strength. You may have a grand business idea but it’s better to start small if you have minimal capital and/or little business experience.
- Run Your Business From Home
Rather than waiting to raise cash to rent office space, it is advisable run your business from your home. This is one of the easiest ways you can start saving a lot of money that comes into your business.
Although, this article is a slight deviation from our usual business law write ups, we consider it necessary to focus on the above topic because we live in a day and age where most entrepreneurs assume that you must borrow if you want to start a business. The borrowing mentality stems from the fact that most aspiring entrepreneurs usually don’t have enough cash to start a business. Also, some are not willing to put forth the sacrifice it takes to actually save for business. Others are not even confident that they can possibly save up the money needed to fund a startup.
However, it only makes sense that you put your money where your mouth is. If your idea is as brilliant as you say it is, you should have no problem committing some of your own hard-earned money to it! Saving a reasonable part of any money you receive is a good start to raising the capital you need for your dream business. It is usually easier to convince your friends, family, investors and banks to give you capital if you already have some of your own money invested in your idea or small business. It’s a sign of confidence and a show of faith that you believe the business idea is worth it.
Therefore, if you’re really serious about your dream business, you need to start making both small and big sacrifices to ensure that you save more from your current earnings.
This article is provided for general information purposes only. It does not constitute advice or an opinion on any specific facts or circumstances. If you have any enquiries about this article or require further information, please contact the writer at firstname.lastname@example.org.