The decision to go into business for yourself is an empowering one; after all, business ownership is the epitome of the American dream. But, once the decision has been made the hard work begins. How much money will I need? Where will I get it? What do I need to know? How will it be paid back? What are my options?
A common misconception is that when a business (start-up or existing) needs money, the only option is a bank for the common loan. Depending upon the size, nature and financial requirements of your business, there are alternatives ranging from short term fixes to long term commercial loans.
SAVE BEFORE YOU SLAVE
Often times, we think of financing as simply acquiring more money when in actuality it can be restructuring the way our current funds are distributed. Perhaps starting your business out of your home office (or an extra bedroom) is an option rather than taking on the added expense of commercial office space. This is an especially good temp to perm money saving solution if you don't see clients on a regular basis. If your business is not designed to function out of your home (i.e. the packaging plant just won't seem to fit in the hall closet) then look at a wide variety of spaces for your company. When it comes down to signing a lease, opt for the less desirable - and often times much less expensive - location. When the demand for an area is not at its peak, the chance of the rent increasing is significantly lower. You can always grow. Functionality is functionality. You can pay a lot or you can choose to pay less somewhere else. It doesn't matter how wonderful your facilities are if you are out of business in a year because the business couldn't afford the location.
Buy used office machines and furniture. Often the cost is less than renting and it is ALWAYS less than buying new. Auctions are a good place to find these buys as well as newspaper and online classifieds. Companies look to revamp their look and entire offices can be had very reasonably.
IN YOUR OWN BACKYARD
A relatively easy way to keep from incurring additional debt while still "finding" money to start your business is by refinancing personal property. Homes and cars are the most obvious places to begin. It goes without saying that holding onto an asset such as a boat or motorcycle, if not in use, is a piggy bank waiting to be tapped. A small, home based business's financial needs can perhaps be satisfied in this way, but a larger undertaking is probably better served through other means.
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