Would you take it if you're in debt?
Archive Spotlight: I thought it would be a good idea to start spotlighting a couple of posts that are buried in the archives. Some of you are fairly new to this site and others are lifelong followers (you are, aren’t you?). No matter what category you fall into, I’m sure there’s at least 1 article here you haven’t read. Enjoy!
5 Ways to Start a Business without Going into Debt
Would you accept a $10,000 loan to start a business if you were personally in debt by, at least, double that amount? Think about that for a moment. Whether the business idea is, “pure gold,” or, “the next big thing,” is totally irrelevant. I honestly don’t believe God would give you an idea just so you can go into debt (and for some, further debt) just to get it started.
Proverbs 10:22 (NIV) says,
The blessing of the LORD brings wealth,
and he adds no trouble to it.
Let’s examine this scripture for a moment. The Blessing of the Lord can range anywhere from your spiritual gifts, the talents God gave you, the skills learned, or the abilities passed down from your parents. But, rest assured, everyone has a blessing from the Lord. Even you. There’s something that you can do that no one else can exactly like you.
In the same line of that scripture it says that the blessing of the Lord brings wealth. For those of you who are afraid to step out there and start your business because of fear, you’re missing out on financial increase. Yes, the economy is in bad shape. Sure, we have businesses closing their doors all around the country. But, if God be for us, who can be against us? If He gave you the vision in the first place, why wouldn’t he give you the tools to build it?
I love the last line of that scripture. It reads,
” . . . and he adds no trouble to it.”
What does trouble mean? It means financial trouble, aka. debt. Whatever blessing God gave you to start your business it will not only bring you wealth, but you won’t go into debt building it, either!
Here are 5 ways to start a business without going into debt;
#1 – Store/Company Front: start your company digitally with all communication, services, or products via the web. Creating an E bay store versus leasing out retail space will save you thousands in fees, maintenance costs, insurance, and etc. Skype is extremely popular for making free calls via the net and open source e-commerce websites typically come with many web hosting services. (For those not up to speed with nerdy internet lingo, open source is free software made available to the public.) Some companies will have to have a store front or physical company presence. That’s understandable. However, don’t go overboard with credit cards, lines of credit, and second mortgages just to make it happen. Be smart and stay strategic every step of the way.
#2 – Employees: Let’s get one thing straight, your payroll will become the largest monthly expense you will incur as a business owner. So ease into those pains by starting off with your “employees,” as independent contractors. This means that when a job is complete, you pay them, they handle their own taxes, and they’re legally not your employees so you won’t have to worry about Uncle Same breathing down your neck. After a while, once your cash flow is moving like the mighty Mississippi, you can start to add regular employees. Strategically, hiring your main gunner full time and maybe one part-timer would probably be efficient for a start-up.
#3 – Legal: In order to start the business you’ll have to get your business license and applicable permits. However, plenty of people go into debt by filing trademarks, copyrights, drawing up legal documents, hiring a business lawyer to start the company, etc. While it’s smart to protect your ideas, it’s even smarter to protect your wallet to keep those ideas afloat. Don’t purchase trademarks and copyrights all at once. Save up for them and purchase them over time. Utilize your bank’s notary service and mail copies of sensitive material back to yourself for a cheap “government stamp” of authenticity. Check out Docstoc.com, they have free business, marketing, and other legal documents online for free.
#4 – Start-up Costs: Does it take money to make money? Well . . . it depends. To curve start-up costs, seek general partnerships with people you trust and who can bring their wallets, skills, experience, and talents to the table. Maximize every available resource, old computers, old software, furniture hand-me-downs, etc. until you can generate some income. Also, look for local “in-kind” sponsorships. Instead of sponsoring your service or product for money, companies may be willing to give you tools, resources, equipment, or advice in exchange for promoting their brands.
#5 – Marketing: When it comes to spreading the word about your product or service, I’ve got 3 words for you; DIY, networking, and Social media. (Well, 1 word and 2 phrases, ha!) Doing-it-yourself as far as creating your website, business cards, fliers, etc. saves an unbelievable amount of money in the long run. There are plenty of free design tutorials and resources on the net. Youtube is a great place to start searching for them. If you’re not networking at business or industry events then you’re missing out on opportunities to interact with potential clients and colleagues. Even in this digital age, word of mouth is still the number one free marketing tool. Social media includes, blogging (which gives readers an inside look into your life, business, industry, service, or product), video creation and sharing (possibly, tips, how-tos, or an extension of the “inside look” the blog achieves), and social networks like Twitter or Facebook (Great for getting into “the flow” of conversations happening in your industry, sharing information, and engaging potential clients in new ways).
Resources:
For more free ways to help you market your business check out my series;
5 Free Ways to Market Your Business .
Also, check out Resource Round-Up | 10 Small Business Links
If God, has given you a vision, now is the time to step out there and start it! Don’t be afraid. Hold on to His promise to bring you wealth and add no trouble (or debt) to it. What other ways can you start a business without going into debt? For all my small business owners, what financial challenges did you face when you started your business? Please, share your comments below.
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About the Author
Rod
Rod, great suggestions. It definitely takes more discipline to do it this way, but then, does not everything worthwhile take the most discipline. Thanks for sharing some practical, proactive ways to keep expenses down while pursuing our dreams.
Hey Steve, glad you enjoyed the article. Discipline is definitely necessary to not only become successful but keep the success you've earned as well.
“Most businesses fail not because of a lack of money, but because a lack of planning.” You better say that, preacha!! That's the ticket right there. Plan, plan, and plan some more.
Starting your own business may sound like a lot of fun but there are many things that you need to take into consideration before you start a business of your own. Most businesses fail not because of a lack of money, but because a lack of planning. bill shor
bill shor
What are effective ways to get the word out about my business? I promote websites Take a look and give me your feedback http://www.vrepmarketing.com
Hello, vrep, check out this article for marketing help; 5 Free Ways to Market Your Business – http://www.rodkirby.com/2009/03/24/5-free-ways-...
Great suggestions. I think having contractors is a great idea. It is alot easier to cut their hours when needed. I have found that I also pay others to do what it would take me alot of time to learn. I recently had to hire someone to fix something I thought I could do myself and it ended up costing me more.
Rod,
Great info! I did not get myself into debt starting my business because I did many of the steps you mentioned. In fact, I even incorporated by myself (it's not as complicated as people may think) and filed my own copyright.
You can save a lot of money if you are willing to research and put forth the extra effort. It is extremely gratifying to do it by yourself because this knowledge cannot be taken away from you and you have the ability to pass it along to others.
Thank you for commenting Julia, I think the whole idea is to be smarter and more strategic so you can be a more efficient entrepreneur. Thanks again!
Thank you for commenting Julia, I think the whole idea is to be smarter and more strategic so you can be a more efficient entrepreneur. Thanks again!