There are many types of home baseds businesses that can be started with little money or overhead. Others will require a small to medium amount of working capital. You may need to purchase equipment and/or software, purchasing inventory, and perhaps you may need to rent a storefront. One thing is certain, you will still need money to live on even if your business is not making money yet. How can you manage this? Here are a few options you may want to consider.
1. Getting Help from a Commercial Bank: The problem that you may incur with consulting a bank is that they may not want to give you the loan if you do not have collateral or prior experience in running a business.
2. Small Business Administration: This organization does not loan the money to you but they find loans that you must guarantee to repay. You must show cash flow to repay the loan.
3. Home Equity Loans: If you own property, this type of bank load is most likely the easiest to get, and right now you can get them with low interest rates. Think long and hard on this option. The question you need to ask yourself, "Is do you want to risk your home to start up your new business?"
4. Cash Advances from Credit Cards: This is a quick way to get cash. Beware however. The down site on this option is the high interest rate. Also just one late payment, even by one day in most cases, can cost you a not only a late fee but possibly a higher interest rate.
4. Leasing: You may also want to consider leasing equipment such as a new computer, fax machines, copiers, etc. This would help to cut down on start up costs, but in the long run would cost more than buying the items outright.
In summary, you need to very careful in calculating your startup costs, and do not underestimate it. Add 10% for cost fluctuations. Sit down and make a check list of all the things that you will need to start your business, including your advertising cost. Advertising is some manner is a must and is often an expense area that is overlooked.
// posted by BasicAnn on 6/29/2005 07:31:00 AM / Permanent Link
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