If you are dreaming of starting your own small business, then you must be charting plans to fund it as well. Many people prefer to keep their regular jobs while building their businesses. Others want to give it everything they’ve got and quit their jobs to pursue their ambitions. Whatever your plan may be, you must realize that cash can be the single most critical factor determining whether or not you succeed.
Setting up a business is similar to planning for a major life event, like getting married or having a baby. There will be tons of unexpected expenses, and you need to be in a position to meet them. If you’re planning to quit your day job, ensure you have saved enough money to meet at least two years of living expenses. Ideally, you should have enough funds to cover the new business needs for at least two years before the profits start rolling in.
Here are a few tips to help you save money to launch your own small business.
- Start Saving and Begin Investing
Saving every penny possible is extremely important when planning to leave your job and become a full-time business owner. The earlier you start, the better it is.
There are several ways to ensure you save money and build a comfortable corpus. First, rely on short-term investment options like savings account, mutual funds, certificates of deposit and individual short-term bonds to get quick returns. The best way out will be to consult a professional financial planning consultant who will give you good investment options suited for your needs.
- Work to Earn More
If possible, try to fit in a part-time job into your schedule. Alternatively, you can also work overtime and earn handsome overtime pay.
If you are willing to explore other options, you can try online coaching, training or teaching stints. Skills, knowledge and experience in latest technology are much valued, and you can make good money by offering coaching or even tailoring your own courses.
If you are creative and are capable of making unique and original stuff, consider designing handcrafted items, or vintage apparel or accessories, which you can sell on online marketplaces like Etsy, BriskSale, Rakuten or Newegg.
Another benefit is learning the basics of running a small business venture, like controlling operating expenses, keeping overhead costs low, and managing inventory. You will also be able to pick up the basics of marketing and customer management from running an online business, which will help you later when you venture out on your own.
- Downsize Your Lifestyle
A blanket downsizing of your lifestyle is another great way to save money.
Renegotiate your rent or move to a smaller place. Cook more at home and carry lunch to work. You can also consider giving up your car and opting for public transport, which not only saves a ton of money in fuel costs but is also good for your health and environment.
Review entertainment, shopping, and eating out expenses to see whether you can cut corners and save money. The more frugally you live, the sooner you will be able to give up your day job and plunge into entrepreneurship.
- Buy in Bulk
Bulk buying will help you save money, but only if you stay away from intermittent visits to the supermarket. It is also essential that you do not waste any of the stuff you have bought. This especially holds true for perishables like fruits and veggies, where if you do not end up eating the whole lot, it is literally money flushed down the drain. Several food items like apples, cheeses, onions, peppers, and meat have a long shelf life when stored properly. Consider buying more of these.
You can also look up offers and freebies online, and clip and collect coupons. These will help you get additional discounts on bulk purchases. You must evaluate other factors like your family requirements, availability of storage space at home, and your consumption habits before you splurge on bulk buys.
- Build Your Network
When you finally take the plunge and become an entrepreneur, you will realize how crucial your networking skills are to your success. A robust network will help you know about the inside happenings in your industry, new business opportunities, potential investors and collaborators, and latest technology and market dynamics, without spending a dime on market research or hosting trade events. So, get started with networking as early as possible.
Attend as many events, trade shows, and product launches as possible. You will get to meet and know a large number of people from varied backgrounds. Ensure you share your contact information and strive to impact the people you speak to positively.
Remember that you should not build a professional network only for personal gain. Unselfishness and a mentality to help others are also important. Always keep your network warm, actively participate in conversations and contribute to your community.
- Do Not Undertake Long-Term Commitments
This is easier said than done. But remember that major life events like buying a new house, getting married or having babies can potentially put additional strain on you. With a fledgling business, unstable income, and long working hours, you will not be able to commit to anything else.
Postponing certain events will free up your time and money to concentrate on your business.
Running out of cash can jeopardize your startup plans. So, plan well in advance and be prepared to meet emergencies. Then, it will be easy for you to realize your entrepreneurial dreams with the groundwork properly done.