| It doesn’t always require a massive amount of | | | | they will want to have a say-so in the operation of |
| cash to start a new business. In fact, 25 percent of | | | | the business. While financial partnerships can be one |
| business owners need no dollar amount to start up | | | | method of reducing personal business start-up |
| and just over 32 percent of new business owners | | | | expense, partnerships rarely work out. |
| needed less than $5,000 to start or acquire their | | | | Credit cards are by far the worst and most risky |
| business. | | | | way to finance your business start-up and/or |
| Businesses such as housekeeping, gardening, internet | | | | operation. Credit cards generally have the highest |
| retail sales, consulting services, daycare, handyman, | | | | interest accumulation of any type of loan and take |
| or similar service industries may require little or no | | | | the longest to pay off. If the business fails, the credit |
| money to start-up yet have potential to grow into | | | | card debt may remain for years many years to |
| very prosperous companies. For example, Molly Maid | | | | follow. |
| Housecleaning Service is a multi-million dollar company | | | | The amount you’ll need to finance your business |
| with services expanding across the country. Molly | | | | start-up clearly depends on the type of business |
| Maid was started by cleaning just one home. | | | | you’re interested in starting. Once you’ve |
| A new business is something like a spider. It has a | | | | decided on the business you would like to start, write |
| core (the body); the primary starting point, then it | | | | out your business plan and research the industry to |
| grows legs. The legs are extensions of the core. Each | | | | see if 1) there is a need for this type of business, 2) |
| leg represents another important part of the body. | | | | you will not be flooding the market, 3) there are |
| For instance, a gardening service starts by simply | | | | potential profits. Then determine if you have enough |
| mowing grass. The legs may grow to include | | | | available funds to finance your start-up and operation. |
| fertilizing, falling trees, landscaping or decorative | | | | Since most new businesses take 1-2 years to show |
| brickwork. As new legs grow, so does the business. | | | | any profit, don’t forget to include personal |
| Starting with just the core is an inexpensive way to | | | | expenses while your new business is operating. |
| start-up a business and test its potential. | | | | Businesses opening without a huge financial debt |
| Taking loans to start a business is risky. Bank or SBA | | | | show a much greater chance for success. If you |
| (Small Business Association) loans generally require | | | | have a business idea, you need to keep it in |
| collateral which sometimes means mortgaging your | | | | proportion to the amount of money you have to |
| home. If the business fails, your home is gone. | | | | pursue it. Instead of building a $400,000 franchise |
| Personal loans can cause control issues and stress | | | | store, you might need to look at buying a $15,000 |
| between lender and recipient. When a person invests | | | | coffee cart that you can drive around to local |
| their hard earned cash into “your” business, | | | | events. There’s always a way to work out your |
| whether they state so upfront or not, eventually | | | | idea without exceeding your means. |