WEBLOG Houston, Texas: January 21st, 2010: There are many ways to start a business with minimal cash, but it is important to start with your own resources and not borrowed money.
— By far the best resource is personal savings.
— Raise cash by selling personal assets – motorhome, boat,
— Invite family and friends to invest in your business,
— Customer financing – where the customer pays a deposit,
— Sell annual maintenance contracts.
I think it unwise to start a business with borrowed money. A business starting in debt, and a going business taking on debt, are two very different things. When there is no income and the first thing one must do as a new business owner is write a repayment check to the bank, that is pure folly. At least go out and make a few sales. At least win a few customers or clients. At least get established as a business before burdening yourself with repayments.
If you were a business owner and you are starting a new business, you must have some money built up from the previous business, or you were not a capable business owner. If that is the case, that is a problem you need to address before getting into debt.
If you have never been a business owner before, you have no experience of business debt. Add that to the inexperience of being a business owner, and you are asking for trouble. Establish the business first, then take on debt, if necessary. Taking on debt before knowing what it is to be a business owner, is an indication of poor business decision-making.
Lacking any resources of your own, I recommend getting an entry-level job in the industry of choice, learn the business from the inside, save like the blazes, then start your business with knowledge and money – two prime requisites for a successful business.
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