The excitement of starting or working to start a business is natural. But also natural is the fear and worry of the cost implication. Only a few start-ups could go without initial cost headaches, that is where there are enough money to play around, but again most of them fail because they relied so much on the available financial capital other than other capital, chief of which is knowledge capital.
You’re excited to start a business. Maybe you have an idea, or you’re just fascinated with the idea of launching and growing your own enterprise. You’re willing to take some risks, like leaving your current job or going without personal revenue for a while. But there’s one huddle to cross: You don’t have enough start-up capital.
On the surface, this seems like a major problem, but a lack of personal capital shouldn’t stop you from pursuing your dreams. In fact, it’s entirely possible to start and grow a business with almost no personal financial investment whatsoever, if you know what you’re doing.
Why a business needs money
First, let’s take a look at why a business needs money in the first place. There’s no uniform start-up cost for building a business, so different businesses will have different needs. It’s important to first estimate how much you need before you start finding alternative methods to fund your company.
Consider the following uses:
· Licenses and permits. Depending on your region, you may need special paperwork and registry to operate.
· Supplies. Are you buying raw materials? Do you need computers and/or other devices?
· Equipment. Do you need specialized machinery or software?
· Office space. This is a huge expense, and you can’t neglect things like Internet and utilities costs.
· Associations, subscriptions, memberships. What publications and affiliations will you subsribe to every month?
· Operating expenses. Dig into the nooks and crannies here, and don’t forget about marketing.
· Employees and contractors. If you can’t do it alone, you’ll need people on your payroll.