Categories Inspiration, Self Help

Finance: What to Know When Starting your Own Business

We’ve talked about taking the first steps to becoming your own boss, but what about the big question: money. A basic financial foundation is key to branching out. Have you wondered how people are able to finance a business?

Amy Sewell from Shop with Style breaks down the 5 key steps to getting started.

#1 – Get Out of Debt

Without debt, you can pour your creative energy into building the business, rather than dealing with the stress of how you will make payments each month.  Paying off credit card debt and building savings (see number three) gave me the freedom to leave a salaried job and strike out on my own.

#2 – Don’t Borrow Money

Just say no to people who tell you that you need to borrow money or find investors.  When I started my company more than 10 years ago, I bought a new computer and a comfy desk chair – and paid for it out of my cash flow.  I know a 19-year-old who saved up the cash to buy her own small-town barber shop.  It can be done.

#3 – Build Up Savings

Sock away at least six months of living and business expenses – even more if it will take longer for your business to generate sufficient revenue and cash flow.  If you can start your business while you still have another job – an option I did not have – even better.  Just don’t quit until you are earning enough to make it.

Visit Shop with Style for more tips.