For years, you’ve been trading your hard work and brilliant ideas for a regular salary. Even if you’re well-paid, there comes a time when you want to make the decisions yourself instead of always needing to seek approval before taking the next step. You’re ready to start your own business. But where will you get the money?
There are no guarantees, but you have several options.
Use your own money.You may be thinking that if you had money, you wouldn’t be reading this. But depending on how much you need to start your business, you might be able to save up and fund it on your own. Even selling some of your assets or borrowing from your 401(k) counts as using your own money, although the wisdom of these approaches may be questionable under certain circumstances.
Ask your family. Many, many startups have been funded by the Bank of Mom and Dad. They love you best and will always forgive your mistakes, but this isn’t always the case with siblings and other far-flung relatives. Make sure your relationship can survive if your business doesn’t.
Take out a loan.NerdWallet lists a number of options for taking out small-business loans. This may be challenging if your credit isn’t good. If you are eventually approved for such a loan, you may want to celebrate, but Entrepreneur warns loan terms can be short and interest can be high. Remember, lenders don’t take big risks. You may be able to use your house or car as collateral, but if your company takes a nosedive, you may be left without transportation or a roof over your head if you take this route.
Find a partner or investor.This isn’t as easy as it looks on Shark Tank. Finding an investor who 1) has the money and 2) can be convinced to give it to you is a lot of work. Further, your silent partner or investor will own a part of your company, so you’ll always have to share the profits. The good part is, if your business fails, you don’t have to pay the money back the way you would with a loan.
Before you try any of these methods for obtaining capital, carefully re-evaluate your business plan to determine how much you need. The amount you borrow and the time it takes to pay it back can affect how much your loan will cost you.
One Great Way to Reduce the Amount You Need to Borrow
One way to save money when starting your own business is by opting for a virtual office space instead of a physical space. A virtual office provides many benefits and can save you thousands of dollars each month.
You likely know leasing office space is expensive, but beyond that, you must consider the costs of utilities, furnishings, supplies, transportation, parking — the list goes on. Going with a virtual office space frees you of all these ongoing expenses and obligations.
You may think of your dining room as your de facto virtual office, but a real virtual office provides that crucial business address you need to secure insurance, licenses, and permits. Different jurisdictions vary on their requirements, but a virtual office allows you to bypass many of the traditional hurdles to starting a business without taking on the expense of a year-long lease.
Further, a virtual office space at Premier Workspaces comes with the services of a live receptionist, a dedicated phone and fax line, answering service, and call-forwarding capability. A virtual office allows you to serve your customers better, and the downtown address lends your business the credibility a new company needs.
Contact Premier Workspaces today to find out more about how our virtual office spaces can help you get your new business up and running.