If you’re starting a business, you’re certainly going to need funds to get it up and running. Even a simple Info product business will require some funding for web hosting, autoresponder fees, web design, and similar tools and services.
I am not saying it won’t work sure it will but only if you’re starting a big tech company (move over, Mark Zuckerberg!), but it’s not like venture capitalists are going to knock down your virtual door in a rush to fund your small business. And you know what? You don’t want to sell your soul to the venture capitalists anyway.
So what can a small business owner do?
The good news is that you’re about to get all the details inside this report. So without further adieu, let’s jump right in.
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1. Freeing Up Resources
Talking about your budget isn’t exactly the sexiest funding topic on the planet – but it’s a necessary step if you want to get your business funding off on the right foot. So take a look at the following three strategies and start planning how to put them to work for you.
2. Don’t Quit Your Day Job (Yet)
I know what it’s like to drag yourself into a day job while spending every other free minute thinking about your business. You’ve wanted to start this business for a while, and you’ve been dreaming about the day you waltz into your boss’s office and quit your job.
But hold up there for a moment.
If you quit your day job, then you’re destroying the income stream that could be funding your business. Think about how much faster your business would grow when you have the funds on hand to outsource and invest in advertising.
So here’s the point.
Unless you have some other source of income that you can use for your living expenses as well as your business expenses, I recommend that you hang onto that day job for a while longer. If needed, cut back your hours to part-time to free up more of your time to focus on your business.
3. Tighten Your Financial Belt
Here’s another topic that doesn’t exactly put the “fun” in funding: budgeting. What I’m talking about here is your household budget. Because if you’re like most business owners who’re bootstrapping a business, you’ll need to use some of your funds. As such, it makes sense to free up more of your funds so you can invest them in your business.
So what you need to do is take a look at all your outgoing cash-flow and figure out ways to cut back. If you have other people in your household, then you’ll need to sit down with them to brainstorm solutions for cutting back expenses.
TIP: Remind everyone in the house that these aren’t necessarily permanent steps.
This will make these belt-tightening measures easier to digest.
You might even get the kids involved by creating a contest to see who can save the most money in the household!
Here are a few examples:
- Focus on conservation to save money. Turn off the lights, turn the thermostat down, dial down the temperature of the water heater, etc. Also, look at your driving habits to see if you’re making unnecessary trips. Can you use public transportation or carpool to look at some savings?
- Dial back the food and entertainment expenses. This means less eating out and less grabbing that $4 coffee when taking some from home would do. Look for other places in your entertainment budget to save money, such as taking vacations closer to home or dropping expensive hobbies for the time being. (E.G., if you restore cars, now might not be the time to drop a new engine into that muscle car.)
- Shave expenses. Look at some of the subscription plans you have for services such as cable/satellite TV, internet plans and mobile phone plans. If there are any services you can outright get rid of, do it. Otherwise, opt for less-expensive packages where available.
- Those are just a few examples. Take a look at your budget to see where you can save money.
4. Reinvest Back Into Your Business
At this point, you’ve freed up some cash in your household budget, and you’ve kept your day job (for the time being) so that you’ve had the funds you need for your business.
At some point your business is going to start turning a profit – and this could happen incredibly fast if you’re starting something like an info-product business.
You may be tempted to grab all the profits out of business and spend like there’s no tomorrow.
Sure, treat yourself to a celebratory steak dinner – you deserve it.
But then commit to reinvesting your profits back into your business, as it will help you grow your business more quickly. You may invest all 100% of profits back into the business at first, and then go to 75% and perhaps 50%. Even when you’re well-established, be sure to keep reinvesting back into your business, so business growth doesn’t stagnate.
So what you’ve learned so far is the first step of this two-step process: namely, how to free up funds to invest into your business. This involves hanging onto your day job, slashing your budget, and reinvesting profits.
Now the second step of this process is to find creative ways to get the money you need to start and run your business. That’s what you’ll be learning about over the rest of this report, starting with borrowing money. Take a look.
5. Borrowing Money
Forget the venture capitalists who’ll want your first-born child in exchange for cash. If you need to borrow money, there are much better ways to do it.
Now, of course, the downside of getting any loan is that you’re going to be paying interest and fees. It becomes expensive money, primarily if you don’t shop around for lower interest rates. The upside, however, is that you can get the money in your hands very quickly – sometimes in as little as a few hours.
So if you’re thinking about borrowing money, check out these options.
6. Shop Around
Don’t even think about putting business purchases on those high-interest credit cards. Instead, look for loans with lower interest rates and fees.
One right place to start is at your local bank or credit union. You may be able to open up a business line of credit but be prepared to show a business plan if you’re asking for a large sum.
Another option is to get a personal loan or line of credit. Generally, you can secure lower interest rates if:
- You have good credit.
- You can offer collateral to secure the loan (e.g., provide something of value such as a house, car or other valuable).
You’ll also want to shop around online. If you have an online bank, check out their loan rates and fees. You can also check out sites like eLoan.com, which offer personal loans from a variety of financial institutions.
NOTE: A financial institution will need to run a credit check to determine your interest rate and loan eligibility. Every time someone runs one of these checks, your credit score gets dinged a bit. That’s why you’ll want to shop around and do your research first, and then only apply for those loans for which you’re eligible.
In other words, don’t use the shotgun approach or your credit score will suffer. Be judicious.
7. All things advertising and attracting new customers!
According to J. Donald Weinrauch, co-author of The Frugal Marketer, you should include advertising material in other mailings, such as in invoices, as it helps save postage and other costs. Likewise, in the bag with customers’ purchases tuck coupons, newsletters or other promotional fliers and this way you end up making the most of your point-of-purchase opportunities. There is one other approach of attracting a few customers and thereby saving a few bucks. Now, I know there is a slight chance of you reaching the prime-time viewers, but there are chances that you’ll make an excellent lasting impression by attacking the Local cable TV stations who have very reasonable advertising rates at time slots throughout the day and night which you can take advantage of.
8. Search engines and attracting visitor online.
There are millions of internet ideas you can follow through one of them is starting your search engines. You have to look for visitors for your Web site by looking through Usenet newsgroups. It is a type of forum where people post messages for public viewing. You could also use special-interest groups related to your target market, product or service as per your need. Just follow steps, and you’ll have yourself a few extra bucks in the savings jar.
9. How online store helps cut costs.
This is one of the easiest ways when it comes to saving money. Going online doesn’t always mean you’re going to get a lot of costs and expenses piled up. Nope instead what you could do is you can start selling those unwanted items over online auction sites like eBay and Yahoo! Auctions. There is also another solution available if you’re someone who needs a professional storefront you can access “Website in a box” usually for a low monthly fee.
10. Start a dialogue online!
Now, while we are on the subject one more way the internet helps us is by engaging in chat groups. I advise you to find newsgroups that cater to your audience. Many successful owners have recommended to engage yourself online into chat rooms because they help you survive and get useful information from fellow owners. All you have to do is invest some time. But make sure you always include your URL in your signature also don’t do any hard selling on any of the groups because most of the groups will ban you immediately if you do so. Instead, practice into providing useful information that’ll eventually make people want to click on your site. This way you’re helping others as well as you’re helping your business.
11. Be smart and get Insured!
In this world do you think without insurance you’ll survive? I don’t think so. Hence, check with your trade association who offer competitive group insurance and get one. There’s a saying I relate to given by Jeanne Salvatore of the Insurance Information Institute, a nonprofit organization in New York City ” Buying appropriate insurance upfront saves money in the long run” Look deep into your business find the vulnerable spots and get insured. Another good advice by the Insurance Information Institute is that you may be able to save on business interruption insurance by arranging for an alternative place to run your business in case of an unforeseen major disaster. Apart from this medical insurance is as essential. But before getting one make sure you ask for information on past claims and the loss ratio of paid claims to premiums. This way you’re insured and ready if god forbid a disaster takes place, and you won’t have to dip into your savings.
12. Purchase Used Office Equipment
There is no shame in buying little-used equipment for your office. There is no judgment there. Everyone cost cuts a bit. We all know how New technology, printers, desks, and other daily-use supplies are expensive hence buying fresh pieces can be a little tricky. So to take measures for this one needs to grab opportunities like looking into your newspaper or Facebook pages for going out of business sales which will often have all the furnishings you’ll need for your office. Apart from this, you save up to 60 percent by buying used equipment from stores such as the nationwide Aaron Rents & Sells chain. This way you’ll be avoiding dipping into that savings jar of yours.
13. Barter your way with other Small Businesses
As a small business owner whose business is a developing one bartering can be both a fantastic skill to utilize as well as a great way to save on cash. Everyone in this market is in the same situation as you so trying to scrimp and save at every corner is not a bad thing. Bartering services assist both organizations equally and effectively. Let me give an example to clear up the topic a bit. For instance, if you’re a mechanic looking for few plumbing fixes in your office space then what you could barter here is your auto or appliance services in exchange for those plumbing services. You can always try this before offering to pay. This way both are being benefited.
14. Do a thorough Research on Banks
We all know how banks tend to carry hefty fees so take time when you research banks. Many are immediately attracted to a larger, national bank, but if you’ve noticed often a financial institution on a regional level will work harder to earn your loyalty. We all know that ATM usage, overdrafts, and mailing paper statements, can include monthly maintenance fees. So, while selecting a perfect bank for yourself, you should always, and I mean always investigate all the requirements of your contract. Double checking the contract is a must because it includes details such as a minimum required balance and all benefits such as fraud protection and interest rate which is very crucial for any small business owner.
15. Provide intellect and earn extra savings
Now, one more way of creating saving is by generating an extra income. Few of the examples for that are:
- Teaching a class, or
- speaking at a community meeting,
- Or writing an article for a local paper.
These few little extra jobs could help you save up few extra bucks.
I hope this article helps you save that few extra bucks and gets your small business from developing to developer mode.
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