Do you have a great business plan and no idea how to fund it?
In this post, I’ll review how I found startup money to finance my business. While I won’t give direct advice on financing, I’m sharing my story in the hope that you find creative ideas.
First, I Started at Zero
If you know my story, then you know that this subject is very personal for me. As a millennial personal finance expert, I built my platform on teaching people how to manage their money, budget, and improve their credit.
But, at the same time, I was doing the same for myself.
First, I paid off over $32,000 of consumer debt. I increased my credit score by over 200 points and joined the “700 Club.” Now, just to be clear – I didn’t pay off all of my student loans or mortgage. I only focused on the high-interest debt that could potentially bankrupt me.
By paying off all of my consumer debt, I essentially started out with a zero base.
Next, I Became Skilled at Using Credit Cards
While a lot of people will recommend taking out a business loan, I consider myself allergic to large principal balances. Today, I still prefer to pay off my credit card every single month.
And, this was how I financed my business.
I got both a personal and business card, used them little by little, then paid the cards off in full every month. I got into the habit of borrowing and repaying and borrowing and repaying.
This pattern of paying off my credit cards in full allowed me to increase my credit score to where it is today.
Finally, I Bootstrapped My Business Expenses
Bootstrapping is a slower process for growing your business because, as you bring income in, you use it to reinvest into your business. But, instead of using debt, you’re using your own money.
When I made my first dollars, I took my income and reinvested them into a working with a mentor and purchasing needed tools for my business. Between bootstrapping my expenses, I also had a business credit card. I used this credit card in small increments as long as I knew that I could pay it off the next month.
As you can see, there are many options for financing your business. There isn’t one right way – I encourage you to brainstorm creative ideas that you can use for your own business.
For example: can you get rid of stuff? Do you have items around the house that you can sell to get extra income? Can you find people who might already owe you money, but ask them to pay you back so you can reinvest the money into your business?
If not, do you have someone who supports your passion and is willing to invest in you and your future success? Are you willing to take out a line of credit to kickstart your business? Can you use your 9-5 income and invest in your business?
It’s important to start thinking about your business as an investment versus a cost. When you do this, it will be much easier to figure out where to find funds to finance your business.
Remember, all it is takes action to turn your ideas into income. That’s Creating Coins.