Debt: Starting a business with no working capital is difficult…

Starting a business with no working capital can be a difficult process, but at some stage, you may need to get a loan from the bank, crowdfund or ask friends and family to bring your business idea to life.

You will invariably be indebted and in debt, before you even create your new brand, but you need to manage this expectation properly because you need to make sure that you look after these investors, first and foremost.

In my personal opinion it is better to start a business as a service-driven entity, this way you don’t have to buy products to fulfil the growth of your company and the debt should be significantly lower.

There are also several business models you can set up without working capital investment to minimise the expenditure of your new brand creation. You just need to keep the budget low cost until you can scale up.

Develop your brand, get training, free or paid and grow your knowledge, and when confident, become a Fractional Director to help grow the brand.

I have a few friends whose businesses have folded, as they’ve not looked at the accounts on a daily basis and they’ve just lost track of cost expenditure by not paying invoices when they’re due, which is critical.

Personally, I don’t like admin and doing the bookkeeping in my business, but I love to do the accounts as this is when joy hits my face when I’m being paid for what my business does; of course, this is a huge boost. Sending out invoices is a wonderful feeling, but chasing people up for money owed is not fun.

Being in business for yourself is a lot more work than people tell you, more risk, and less support, especially if you’re alone and not working in partnership. This risk is fully yours and yours to own, so don’t allow debt to ruin your business, ask for help before it gets too late.

Written by Sonny cutting – The Directors’ Hub

DISCLAIMER

Important Information – Please note, the opinions expressed in the A-Z of Life: The Entrepreneurs Journey are purely personal ones. This website article contains general information about personal experiences and personal finances. The information is not advice, and should not be treated as such. Please do not rely on any information on this website as an alternative to financial advice from a professional provider. If you have any specific questions about debt, please consult the National Debt line

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