Small businesses account for over 99% of the industry in the US, there are over 28 million of them, with new companies starting up every day. These businesses are exceptionally important. They provide jobs, boost the economy and give their owners the chance to achieve financial independence while working for themselves and growing something on their own. Owning a small business gives you something that you love, that you can grow, and eventually something that you can leave behind. It’s a brilliant thing.
But, unfortunately, many of these businesses fail within the first year or two. Often, for financial reasons. It’s thought that only a third of new companies survive for ten years, with another third closing their doors within the first two years.
When starting a business, debt is almost inevitable. You’ll have cash flow issues, you’ll need to borrow to get started, and money will be a constant concern. But, it’s essential that you avoid it as much as possible, that you keep your finances in order and then you know exactly where your money is going.
Choose Good Debt
If debt is inevitable, it’s crucial that you choose the right kind of debt. A line of credit from www.businesslineof.credit to help you pay for expenses and keep control of your money is a much better option than massive loans, credit cards and getting yourself into personal debt for the good of your business. Keep your personal finances separate, and if you do need to borrow money, do it very sensibly.
If you need a lot of money to get started, investors can be a much better option than debts. Take the time to come up with a pitch, make sure your business is worth investing in and approach anyone that might be interested in helping.
One of the main reasons new businesses’ get into financial hardship is trying to do too much too soon. They try to launch a chain of stores immediately, or they start thinking about opening up in a new location as soon as the first is launched.
Even if your launch goes exceptionally well, take your time. Give your business a chance to settle, and make sure it’s capable of making money consistently throughout the year before you even start to think about expansion.
Keep Your Day Job
When launching a business, it can take a long time before you start to make money. If you need your business to do well to support yourself and your family, you’ll need to take a salary out of it. This can make things difficult. If possible, to give yourself a little financial flexibility and security, keep your day job, even if it’s just part-time. This takes a lot of pressure off your business and gives you the time that you need. It can also be a good idea to outsource work instead of employing too many staff. Read more about that here https://creativewomens.co/why-every-startup-should-look-at-outsourcing/.
Write a Business Plan
The internet has made it much easier to start a business. This is great, but it often means that people go into it without giving things much thought. Take the time to make a detailed business plan so that you know what you are doing and what you can expect. This will also help you secure investments.