There’s nothing more exciting in your professional life than starting your own business. You’re finally taking control of your future, and you’re looking forward to everything it will bring to your life.
Before you get too deep into the startup process, turn your attention to funding. It’s critical that you have a clear idea of how you’ll fund your startup, both now and in the future.
On the plus side, you have many options available to. These include but are not limited to:
· Personal savings: Maybe you’ve been saving for many years to start your own business. Or maybe you have severance pay from your last job that you can use to get your business up and running. Regardless, it always makes sense to turn to personal savings. This gives you the opportunity to start your business without taking on debt.
· Credit cards and/or loans: It’s best to avoid borrowing money, when possible, but that’s not always the case. You may need to use credit cards or a small business loan to get off the ground. Doing so comes with many risks, such as the inability to repay the loan based on the terms and conditions. However, if you don’t borrow more than you’re comfortable paying back, you’re in position to use this to your advantage.
· Outside funding: This comes in many forms, such as a loan from a family member, an angel investor or venture capital funding. There are pros and cons of all three types of outside funding. Create a list to help you decide which option to pursue first.
Before you make any final decisions regarding funding, be sure that you have a clear idea of how much money you need. For example, you don’t want to borrow $100,000 if you only need $50,000. Doing so will put unnecessary pressure on your business during the startup phase.
Regardless of which funding strategy you settle on, have a clear idea of the pros, cons and the impact it’ll have on your personal and business finances now and in the future.
When you choose the right type of funding for your startup, you can hit the ground running.