We are all aware that in terms of funding, a one-size-fits-all approach does not exist. Â A lot of things actually vary just like the type of funding you are looking, the area of your business as well as the amount you need.
Do you know the biggest challenge on starting a home business? Well, for a lot of people, the main reason is funding or money. After you compute the initial start-up costs plus the amount of money that you need to cover your own personal expenses all throughout the startup phase, you will see that getting money to start your new business may be required, but seem daunting.
So, here are some solutions for funding a startup home business. You may find some risk-free, but there are also some that involves significant risk and should be used with caution.
- SBA Loans (US countries)
Most small business owners opt to look for a loan in Small Business Administration loans, which is a right way of thinking. This is actually a very good option once you pass the criteria.
- Bank Loans
Though a lot of reports recently have been telling that receiving bank loans are difficult, this is still an option particularly to those with huge collateral and good credit standing. You can look for some tips on how to secure a bank loan.
- Nonprofit Microloans
One great example for an outline portal for microloans is Kiva. For small businesses that only need a small amount of money especially for those minority-owned businesses that operates in developing countries, working with Kivaâ€™s field partners could be a great method.
- Start Part-time
You can start your home business as a part-time venture if you want a steady source of income to sustain your financial obligations as well as to keep your family covered with health insurance. Never quit your day job until your home business gains a secure and stable flow of customers and also the profits.
- Start your business at your place
US Small Business Administration Office of Advocacy recently reported that 52 percent of businesses are actually home based. If you canâ€™t handle the monthly bills for utilities and office space dues, you can start your small business at home.
- Get work commitments in advance
List down two or more business sources before you dive in. If you left your former employers in good terms, then they can be a good source of work and even funding. Those big companies that send their overflow work or offer small jobs that they donâ€™t like to do can initially give you income and the flow of work.
- Look for a part-time job
You can work part-time in order to save until you got the sufficient amount of money that you need to start you home business. Or, you may work as part time or full time in your own business and then get a part time job and add the income to your startup business.
- Rent the equipment you needed
Consider rending the tools and equipments that you need instead of buying them especially if you donâ€™t have a lot of money to fund them or you are not sure on how much an item costs. You can go to places where everything from backhoes to power tools is for rent. And when your business has a lot of cash coming in, consider buying the things that will be regularly used.
- Buy used equipment
Itâ€™s really great to start a new business with new cabinets, desk and shiny tools and equipment. However, you can really save an ample amount of cash if you consider buying the used ones. You can watch Craigâ€™slist, Ebay, or your local newspaper for auctions. Garage sales and moving sales are best sources for cheap items to use. You can also go online and search for â€œused office furnitureâ€ or â€œused office equipmentâ€.
- Borrow from family or friends
Frequently, your family and friends are good source of funding for your small business. But one thing is for sure, your family will be there for a very long time and you surely want to stay friends with your friends. So, never borrow from them if you donâ€™t have a working business plan and have done a thorough research about the market that you want to reach. Always make sure that your plan offers ways to pay the interest on the money you borrowed over a reasonable payback period.
- Use your Savings
If youâ€™ve saved a lot of cash, you may consider using some of them for your startup. Yet, donâ€™t put all in the new business. Remember that you need to set aside for future emergencies.