Whether you need $200, or $2 million to start your new business, the question of who’s going to pay for it might be tough to answer. But if you’re like most bootstrapping entrepreneurs, you don’t have unlimited funds to throw at your new venture; you either need to stick to a super low budget, or get more money from another source.
I find most new entrepreneurs fall into two camps: either they refuse to consider any type of external funding (even when it would really help them), or they refuse to consider spending a cent of their own money on a new venture and want it all to come from somewhere else.
In my opinion, it’s great if you can fund a business yourself. But if you don’t have enough money to do that right now, and you’re not willing to apply for any other funding, you really only have one option:
Save every penny you can.
Seriously. If you’re still planning out your launch and you’re not in business yet, you’re in a great position to start saving your own money so that when you do launch, you have some cash to pull you through while you build up your sales.
But maybe you’re cash strapped already and you’re thinking, “How can I do that? I barely have any money left over after I pay my bills. I can’t afford to save up.”
First of all: if you want to do this entrepreneurship thing, that attitude has to change.
Second: there are a bunch of ways to gather up funds for your business, especially if you only need a few hundred, or a few thousand dollars. Here are some ideas.
How to find the cash to start your own business
You can start saving even if you haven’t figured out just how much money you’ll need, because you need more than zero. But you should still create a startup budget, so you know when you have enough to get things going.
- Choose a specific dollar amount to set aside in a separate account, every week or every month. The key is to make the deposits automatic (you can set this up with your bank). When it’s automatic, you won’t notice it until you check your account and your jaw drops at the sight of all the money you saved without realizing it. Even if it’s only $5 a week, you’re getting somewhere at least.
- Spend less on things you don’t need. Say no to the second glass of wine at dinner, and put that $7 into your account. Skip the morning latte on the way to work, and put that $4 into your account. Do you need another pair of shoes, or that scarf (yes, I know it’s on clearance)? Or would you rather launch your entrepreneurial dream? I know what I’d pick.
- Buy things on sale, and save the difference. If your favorite ice cream brand isn’t on sale this week but a competitor’s is, pocket the difference in your account. Yes, even if it’s only $1. Another hot tip: pay close attention to the price per kilo or pound for the meat you buy – the prices fluctuate a LOT. When it’s cheaper, buy more. Pocket the difference.
- Get rid of your junk. You don’t need half the things in your home, I guarantee it. Sell them off. Have a yard sale or join a local buy and sell Facebook group, and ditch your unused possessions in exchange for a ticket to business freedom.
Even though my business has brought in 6 figures every year for three straight years, I still practice ALL of the tips listed above (but now I use that money to fund other things because my business has healthy cash flow). It adds up to more than $600 per month for me on average (seriously!), and it’s all money that I would otherwise be frittering away a couple of dollars at a time without even realizing it.
However much money you’ve saved up by the time you’re ready to launch, dump it all into a business chequing account right away so you don’t mix it up with your personal expenses.
That sentence above? Read it again. It’s really fricking important. If you start mixing your personal expenses in with your business, it’s a bookkeeping nightmare. So just don’t do it.
Cash IS King
For a lot of service-based and online entrepreneurs, the cost of starting up might involve no more than a domain name registration, a business registration, a web site hosting plan and a few business cards. That’s all I had when I started my business with less than $200. (Actually, I didn’t even have a domain name).
So suck it up, buttercup. If you really want this entrepreneurship thing, you need to find a way to get at least part of the money yourself.