How To Start Your Business Without A Loan


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[h=3]How To Start Your Business Without A Loan[/h]



Interested in starting your own business but hesitant to take out a huge business loan? While it can be difficult to start a company with little capital, it is absolutely possible. In some ways, it can even be less risky and less complicated.

Here are some ways to build up your company from scratch:

1. Keep Working Another Job – If you’re not getting instant cash by taking out a business loan, your startup capital will have to come from your savings. Set money aside, separately from other savings, in amounts that you won’t miss on a daily basis. Your savings will only grow if you don’t draw on it for living expenses or other necessities.

When you’re ready to start your business, it could benefit you to keep your job at the outset, as keeping your salary while you’re starting up can take a lot of the pressure off of your first few months, or years, in business. And the benefits don’t end at your salary—your health insurance, retirement plan, and sick/vacation days are all things that you’ll have to pay for on your own when you’re self-employed.

2. Reinvest Your Profits Back Into Your Business – Using your profits to pay for living expenses or to pay down other debts will limit how fast your company can grow. You’ll maintain your highest level of working capital if you reinvest your profits back into your business. Whether you invest in new products, technology, or employees, your goal is to grow your business by attracting new and more customers. You can also choose to invest in marketing or advertising to grow your customer base.

3. Keep Your Overhead Low – You won’t need a huge business loan if you keep things small at the start, and grow organically. If you can get away with working at home, or not needing to rent a space or invest at the outset in new technology, you can keep your overhead low, therefore not needing to cover huge bills at the outset when you could be investing your profits into your business instead. If you can keep your overall running expenses on the low end, this will help you be better able to reinvest your profits back into your company. Once your company starts to grow and your income becomes more reliable, you can start to take on larger overhead costs without it slowing your rate of growth.
 
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Day dream . . . go ahead dude
 
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The Monk

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Niliwahi kusoma mahali kwamba entrepreneur in debt is entrepreneur in business.
Nadhani kwanza inategemea ni biashara ya aina gani na inahitaji mtaji kiasi gani.
Mfano utakua unauza huduma au vitu. na kama ni huduma utaendesha hiyo biashara mwenyewe au utaajiri watu. Sasa huo mtaji wa kudunduliza hadi uje ufikie kiwango cha kukidhi hayo mahitaji si hata hilo wazo la biashara litakua limeshapitwa na muda?

Nilidhani utaongelea kua na uwezo wa kutengeneza wazo la biashara na kulijengea hoja kwa watu wenye uwezo wa kutoa pesa zao kuwekeza kwenye wazo lako.

Ila sio mbaya, asante kwa hoja.
 
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How To Start Your Business Without A Loan


Interested in starting your own business but hesitant to take out a huge business loan? While it can be difficult to start a company with little capital, it is absolutely possible. In some ways, it can even be less risky and less complicated.

Here are some ways to build up your company from scratch:

1. Keep Working Another Job – If you're not getting instant cash by taking out a business loan, your startup capital will have to come from your savings. Set money aside, separately from other savings, in amounts that you won't miss on a daily basis. Your savings will only grow if you don't draw on it for living expenses or other necessities.

When you're ready to start your business, it could benefit you to keep your job at the outset, as keeping your salary while you're starting up can take a lot of the pressure off of your first few months, or years, in business. And the benefits don't end at your salary-your health insurance, retirement plan, and sick/vacation days are all things that you'll have to pay for on your own when you're self-employed.

2. Reinvest Your Profits Back Into Your Business – Using your profits to pay for living expenses or to pay down other debts will limit how fast your company can grow. You'll maintain your highest level of working capital if you reinvest your profits back into your business. Whether you invest in new products, technology, or employees, your goal is to grow your business by attracting new and more customers. You can also choose to invest in marketing or advertising to grow your customer base.

3. Keep Your Overhead Low – You won't need a huge business loan if you keep things small at the start, and grow organically. If you can get away with working at home, or not needing to rent a space or invest at the outset in new technology, you can keep your overhead low, therefore not needing to cover huge bills at the outset when you could be investing your profits into your business instead. If you can keep your overall running expenses on the low end, this will help you be better able to reinvest your profits back into your company. Once your company starts to grow and your income becomes more reliable, you can start to take on larger overhead costs without it slowing your rate of growth.
Raising Money: Should Entrepreneurs Consider Debt or Equity Financing?

Photo: Dollar Bill; Source: Free Images and Stock Photos
As far as funding a startup is concerned, there are two fundamental ways to accomplish your goals - debt financing or equity financing.
Each caters to the needs, and long-term objectives, of an entrepreneur and needless to say, both have pros and cons. This makes it imperative, on a small business owner's part, to learn about each option before making a choice.

Debt Financing – Are you comfortable with small business loans?
When referring to debt financing, it implies that you will fund your business through loans; either from a bank or some other financial institution. Moreover, you can get loans from so-called commercial finance companies, to use as seed capital to float your new venture.
However, in order to acquire a small business loan, you will have to come up with nothing less than a stellar credit and a sturdy financial background. Also if you want a large loan to be approved, then you will have to quote proper collateral, for example, your company and other assets you may own.
Many budding entrepreneurs are averse to taking on debt to start a business. Mainly because they are skeptical about their ability to repay loans on time, in case of an intermittent cash flow that may plague their company sometime down the road. While there are other entrepreneurs who aren't confident regarding their creditworthiness so, they don't even bother submitting a small business loan application.
Still, everything's not amiss with debt financing. There are some advantages. For instance debt financing:
§ Gives you full control over your business. Ownership rights will remain with you, unless you default on your business loan terms. Then your lender will ask for collateral as a security against the loan. If you fail to repay the loan, as per the agreement, then you may lose tangible assets.
§ Enables you to build business credit, which can benefit your company in the long-run, especially when you need access to more capital in the future as well affordable business insurance coverage.
Apart from these considerations, keep in mind that interest paid toward small business loans are tax-deductible, thus easing the pressure on limited financial resources.

Equity Financing – Will you share small business ownership?
In the case of equity financing, investors will fund your business in return for a share of ownership. Investors then reap profits when your business becomes successful or has an exit event.
However, in the event your company fails (and doesn't make any profit) you are not obligated to repay the money owed to investors - in most cases. Additionally, you won't have to worry about monthly debt repayments impacting much needed cash flow.
Furthermore, many entrepreneurs choose equity financing to finance their startups because personal credit history is often not a barrier to investment. Instead, funding is secured on the basis of a company's business prospects - its power to generate revenue.
Equity financing enables investors to share profits and, often times, have a say on your day-to-day operations. Many entrepreneurs may not see this as a threat due to cash needs, but it can become a major contention down the road. Alternatively, strong investment partners can become an added advantage for your company's growth prospects.
Deciding between equity financing and securing a small business loan is a challange for all small business owners. Start first, by understanding the advantages and disadvantages of each option to determine which type of financing is best for your small business.


Source

Raising Money: Should Entrepreneurs Consider Debt or Equity Financing?
 

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