Starting Your Own Business Can Provide More Than Just Income
Simplify Your Life
The first thing you’re going to have to do is make some sacrifices. Cutting back on some frugality now can go a long ways towards making your entrepreneurial dreams a reality. When asked how he would do things differently, if he had to rebuild his consulting business from scratch, multi-millionaire and entrepreneur Sam Ovens said, “The first thing I would do is I would just ruthlessly cut all my unimportant costs. Nothing is more prohibitive to starting out as an entrepreneur than having flabbiness in your lifestyle and unessential expenses.”
Every dollar that you cut from your personal spending is another dollar that goes towards starting your business. Those Starbucks runs and nights out at the bar can very quickly turn into the startup fund you need. So practice a little discipline, and cut back on every unnecessary expense you can.
Put Away Savings First
Before you start making your monthly purchases, put money in a savings account that’s dedicated to your business—one that you don’t touch for personal expenses. This goes hand-in-hand with the previous suggestion, as you’ll have to learn to live on only a portion of your regular monthly income. Financial experts recommend putting 20% of your monthly income into savings for personal finances. So if you're trying to save to start a business, aim to save 30% to 40% of your income each month.
It may sound difficult to consider living on only 60-70% of your current income, but put that money into your savings account before you begin spending, it forces you to work with what you have left. And keep in mind that more than 40% of small businesses started for under $5,000. So if you focus on putting money away for even a short amount of time, you could feasibly have enough money to start your business in a year.
Look for Opportunities to Trade Services
When you’re looking at starting your business, you can’t always afford to pay for the goods and services you need. But what many new entrepreneurs don’t know is that there are sometimes ways that you can trade your business’s products or services for the things that your company needs.
In fact, there’s an entire organization dedicated to it. The International Reciprocal Trade Association, or IRTA, is dedicated to matching up companies that want to barter or trade for goods or services. So before you pay for things your business needs, look around and see if you can’t trade for those items or services first.
Start with the Minimums
As you begin to put things into place for your business, it may be tempting to try to go “all in” on your investment by renting an office space, purchasing professional-looking office furniture, and hiring employees. You’ll reason with yourself that you have to look like a professional in order to get business. But that’s not necessarily true.
There’s no shame in being a one-man business in the beginning, and it’s not unheard of to meet with clients at their offices instead of having them come to you. Simple adjustments like these can allow you to minimize your startup expenses. Don’t be ashamed to run your business from your garage for the first little while. It’s okay to borrow, rent, or buy used office furniture. And if you do need to hire employees, look for outsourcing opportunities first.
With a little bit of discipline and a lot of drive, it’s completely possible to fund your own business. A bit of frugality now can help you to create a lucrative venture that will allow you to live comfortably in the future.
