Any entrepreneur can tell you that when they were starting a business, financing was a major component.
Starting a business? One of the most critical decisions is the approach. Do you quit your job? Wade into a new venture while still employed full-time? Do you work part-time for someone else to help ease the budget crunch? If you have lost your job, do you just make the leap?
The answer comes down to one word – MONEY.
Financing a start-up is not easy. According to the National Small Business Association, “64 percent of small businesses used financing in 2017, 29% used credit cards. Almost 30 percent were not able to obtain adequate financing.” That is telling because small businesses usually take out starter loans to buy equipment, open an office or purchase some type of inventory.
When I started my business, I had lost a job. (Actually, I got fired … but that’s a whole different story.) This was the job I moved back home to take. My father told me at the time there was no kitchen big enough for two Greek women, so I bought a starter house. Now I was single, unemployed and had a mortgage.
I always knew I wanted to start my own business. I just did not think it would be that soon. It was time to decide. What I did next is what many entrepreneurs do – I got a job to help finance my start-up. That might not sound very entrepreneurial – but for me, it worked! I took a position as an adjunct faculty member for a University. For two years, I taught full-time while getting the business up and running. I took out a small loan and put my house up as collateral. I worked out of my home to market the fledgling company, secure clients and set up systems. When asked to teach for a third year, I declined. For the business to go to the next level it needed more of my time and attention.
I know that many would say this was the safe way to start out. Some might question if I was an effective teacher. I would argue that I was being responsible. And, students got the benefit of instruction from a working professional. Of course, there is a downside to working during a start-up.
The hours can be overwhelming.
You must not “short” your employer. You must give the job your full attention while you are there. And it goes without saying, you should not work on your business while someone else is paying for your time. Clearly define a plan to make the big leap to working full-time in your own business. Otherwise, it simply won’t happen. Set a deadline and stick to it.
There are many different paths to starting a business. Use your savings and take the leap. Go for a loan or crowdfunding. Work during your start-up. The important thing is not how you start, but that you build a foundation so the business will last.
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