Sometimes people will take on debt to start up their businesses — from $7,000 up! If you already have debt, it doesn't seem to make semse to take on more.
Starting a business can be an avenue not only to debt reduction, but also to financial independence. There's certainly a lot of effort to get the business going, but once the business reaches critical mass, it's more maintenance, and then even later the day-to-day grind can be done by employees or sold off entirely.
But starting up a business does not require a huge outlay of capital. Now, if you have determined that you want to open a coffee shop, then there's little else to do than find a space, rent it, hire employees, buy coffee shop equipment, pay for advertising, permits, etc. But there are other options for starting a business that require little or no outlay for capital, and this means little or no need to take out a business loan. Here are a couple of easy ones:
- Start a blog on a subject that interests you. (In case you haven't noticed, I'm doing this one!) This requires absolutely no monetary outlay if you have access to the Internet — just your time. You can sign up for free at Blogger.com or WordPress.com, and start posting! Go to similar blogs, and contribute to the discussions, and leave your blog address. Then, hook up some Google Adsense on your blog (this is free as well), and as you get traffic, you get clicks through on the ads, and you make money. Or add other affiliate programs that have related products.
- Sell things on eBay. Start with stuff you have now but don't use anymore. Financial Train Wreck and No Credit Needed have used this method to great effect. After you have a feedback rating built up through some good transactions, then you can comb garage sales and auctions for undervalued deals. Or if you have a knack for a particular craft or some information on a particular topic, you can sell that, too.
- Take the $10 challenge. Hello, Dollar! (not active anymore, sadly!) suggested that people try to start up a business with only $10 in capital. A number of good ideas came out of this one.
Main point: Starting a business can be a good way to reduce debt, but taking on more debt is counterproductive. You can do some good by starting out really slowly, take some baby steps, and risk almost no money except the value of your time.
I think the strangest thing for us, is that we’re just trying to unload excess stuff we’ve hoarded over the years. I’ve told several geek co-workers about how we are selling excess on ebay and told them to get on the bandwagon. They technically know how to do it, but they all state it’s too much work and risk. A few of these guys have moved, and wound up moving piles of extra stuff in the basement that they want to get rid of. The funny part is that they told me to feel free to come over and pick and take whatever I want to sell, computer parts, laptops, books, etc. They just want to give it away to me, to get rid of it. I haven’t responded yet, but I’m thinking… We might just have a second career as a modern day Sanford and Son!
Best
Trainwreck
Liz Pulliam Weston did an excellent article on businesses that you can do from home.
http://moneycentral.msn.com/content/CollegeandFam…
ADD, yes that's a good article. I've seen a lot of ads online for mystery shopping opportunities.
Trainwreck, there's a good idea. Offer "free junk removal" and sell the stuff for profit.
I have some Commodore hw/sw that was mine when I was young. I sold a 4-bay cartridge expander and some cartridges for $50. My wife couldn't believe what they went for. Vintage computer stuff does get sold on eBay all the time.
Also helpful is the distinction between self employed and side business. I think it's relatively easy to start a side business that is enjoyable, makes a little money on the side, and didn't cost much to start. A full on gig will required a lot more upfront capital.
Stackbacks, that's right. A big outlay of capital adds a lot of stress. Also, it's an easier risk to take for lifelong employees than making the switch completely from employee to entrepreneur.
Selling yard sale items on the net is more of a side business but it is the kind of thing that take a budding entrepreneur into a full throttle business of dropshipping new products or even eventually stocking inventory.
I wish i had come across you article earlier. I could have avoided a lot of pain i went through in my business becaure of debts while starting a business. Now things are better but initally it was too tough to handle. Nice article.
Great tips!
Hey……I'm new to the world of online business start up's and blogging but am trying to learn as much as I can. I've been self employed my whole life but doing the more traditional things like running a 9 -5 company.
I have just come to learn that I value my time with family more than I value owning a large company.
Any help or ideas would be great, I hope to get to know a few people and learn some tricks.
I think it is good for newbies but you have to choose your dropshipper carefully.