How to Bootstrap Your Business to Success – Guest Post
If you are looking to start a business, don’t expect any venture capitalist, bank, or angel investor to give you money when you aren’t willing to put in some of your own funds or take risk to get your business started. Here are 7 ways you can get your business started by making due with resources that you already have…
If you have a steady job, you’d be wise to set aside some of your paycheck for your startup. If you feel that your paycheck is not enough to set aside money, look for ways to cut back on your monthly expenses. Savings from your job are the most ideal form of funding because your only risk is losing money that isn’t tied to anything.
Do you have a car, some equity in your home, a savings account, or stuff that you don’t need? You may be surprised to find out how much of your tangible assets you can sell. You can also use your assets as collateral when you’re looking for a loan.
Sergey Brin and Larry Page used credit cards to fund Google in the ‘90s. Although credit cards can give you as much as $100,000 in credit limits and have been used to launch very successful businesses, if your business fails, you may end up in bankruptcy court. As such, only use credit cards when you have done your homework and know what you are getting yourself into. Because you are free to do whatever you want with the funds, you risk spending money on superfluous business expenses (expensive web design, fancy storefront, etc.).
On the other side of things one of the best credit card processing solutions is to set your business up so that you can accept credit card payments, which could help your cash flow if you’ve always been dependent on waiting for someone to send you a check. Sometimes it tends to help prospective buyers loosen their pocketbooks because it’s easy for them to pay that way.
401(k) Retirement Plan
How would you like to get funds that require no bank or lender approval, and no interest expense? If you create a 401k plan for a newly created corporation, you can transfer your retirement funds from your job and invest it into corporate stock. When you sell your stock, you can use the money to invest in your business or pay yourself some sort of salary.
Cash-Value Life Insurance
If you have a life insurance policy you can take money out of it and not have to worry about monthly payments or accrued interest. Of course, if you pass away and don’t repay your debt, you’ll have taken away money from your beneficiaries.
Home Equity Loan or Line of Credit
A home equity loan is one loan payment which you pay back over many years and a home equity line of credit works like a credit card in that you have a credit limit which you repay and borrow from. If you opt for one of these options, make sure you know your business inside and out because failure to repay your home equity will result in home foreclosure.
Friends and Family
Borrowing small sums of money from those who already know and trust you may add up to significant startup capital.
Before you invest any money, always perform a validation test on your business idea to see if it has potential. For example, if it is product idea, ask people (on online niche forums, inside retail stores) if they would buy your product based on a picture and description. You may confirm your suspicions or find out that there is no need for your product in the marketplace. If you find that there is no interest, you save not only your money, but precious time that could now be used to explore other business opportunities.
Nickolay Lamm protects consumers from online scams at InventHelp Scam Watch.