As the saying goes, “you must spend money to make money.” If you’re thinking about starting a side hustle or full-time business venture, you’ll need cash to get started. Unless you’ve been saving for years, all financial obligations will fall on your shoulders. Even if you decide to apply for a loan, you’ll be responsible for repaying the balance, interest, and associated fees. As such, most entrepreneurs opt to get their finances in check and fund their business ventures themselves.
Bootstrapping To Success
Bootstrapping is the process of starting and operating a business using funds from your savings or other income sources. While you may accept a charitable contribution or try other fundraising methods to secure capital, most of the money comes out of your pocket. Although it can take longer to acquire things you need for your company and accomplish your professional goals, it’s often the most rewarding and least stressful approach.
Benefits of Bootstrapping
When you invest your hard-earned money into your business, you feel a sense of pride. Not to mention, you don’t have to worry about repaying the debt to lenders and creditors or relying on investors. Everything you earn will essentially go back to you instead of paying off debts, and your credit remains intact. There’s also the added benefit of maintaining full ownership and complete power over your business, as working with investors could require you to give up some of your control in exchange for cash.
If self-funding sounds like an avenue you’re interested in taking along your entrepreneurial journey, here are a few tips and tricks to help you succeed:
Set Up A Savings Account
Every penny you can earn towards your business venture is a lifesaver. So, the first suggestion for hopeful entrepreneurs is to put their money in an interest-bearing bank account. Companies like ONE offer customers 1.00% APY, far exceeding the national average of 0.06%.
Cut Out Unnecessary Spending
If you want to start and manage a business, you’ll need to get serious about unhealthy spending habits. That means significantly reducing or eliminating expenses that aren’t necessary. You may need to stop eating out for lunch, learn how to make coffee at home, narrow your streaming services down to one, change your cell phone plan, or find free ways to entertain yourself.
As you identify and eliminate wasteful spending, you’ll free up money you can dedicate to your business needs.
Save On Essentials
Of course, a life without any bills or financial obligations is impossible. There are things you need for your well-being and survival. While you can’t eliminate these expenses, you should constantly look for ways to save on things you need most.
For example, installing a programmable thermostat and turning off the lights when they’re not in use can help you save on your energy bill. Similarly, buying generic brands, shopping during promotions, and using coupons can help you save money on groceries.
Use Large Payouts
There are times when you get large payouts or lump sums of cash. Instead of splurging on a vacation, some new clothes, or another item, you don’t need, apply this money to your business. Some examples might include income taxes, a salary bump, holiday bonuses, birthday cash, etc.
Find Other Income Sources
Sometimes, despite your best efforts, your income isn’t enough to cover your everyday expenses and your business venture. That’s where having another source of income makes sense. It doesn’t have to be a full-time job or as involved as managing a business; simply something to bring in extra cash. You could join a rideshare service, deliver takeout or groceries, walk dogs, house-sit, tutor, provide resume writing assistance, etc.
In most cases, starting a business requires capital. Unfortunately, most people don’t have the extra cash just sitting around to use. While some people opt to get partners, work with investors, apply for a loan, or attempt other fundraising activities, many come at a high cost. If you wish to maintain complete control of your business, avoid going into debt, and have a renewed sense of accomplishment, self-funding is the way. Use some of the ideas listed above to secure the cash you need to get your business venture started.