IS YOUR HOME BUSINESS DEBT A BOTTOMLESS PIT?
By Gregory H Bey
If you have recently started a home based business, more than likely you are in debt. The vast majority of people who go into business usually have to borrow money in order to get their business started. The money is usually borrowed from a bank or some other type of lending institution.
For those of us who are in mail order, network marketing, online or some other type of small home based business, the process of obtaining star-up money is some what different.
If you are operating a internet, mail order or MLM business you already know that banks don’t lend people who go into these types of businesses money. Why? The figures speak for themselves, The majority of people who go into mail order, MLM and some other types of small businesses don’t last very long, they don’t make any money. If there is no money made the banks can’t collect on their loans, Even if you only want to borrow five or seven thousand dollars to get your business started, the bank won’t lend it to you, you are considered a bad risk.
Those who want to work from home in their own business have to find other ways to raise the money to get the small business going. So, what’s the answer, where does the money come from?
Some people will borrow their start-up money from family or friends. some people may put aside money each month from their regular job until they save enough money to get their business started. Start-up money could also be borrowed from a credit union. A person could also work an extra part time job or do some other kind of fund raising activity, such as, having several garage sales, selling at flea markets or offer their services in any other number of ways to get the money to start their small business.
If you are starting a mail order, internet or network marketing business that requires only two or three thousand dollars to get started, you should make every effort to get the capitol you need without having to borrow it. This way if things don’t go as you expected and your business venture doesn’t work, you won’t have to worry about paying anyone back money that you don’t have. I realize that one should go into business with a positive attitude but we must also consider that things may not work out as we planned them. Something that you should never consider doing is trying to start your business using a credit card. Credit card debt is one of the worst kinds of debt that you can get into. Once you start using that little plastic card to get what you need, before you know it you have charged yourself head-over-heels in debt.
If you feel that you have enough control of your emotions to use your credit card to start your business, this may be an option however, don’t allow yourself to get so far into debt that you end up with a bad credit rating because you can’t pay off your credit card loan.
Considering how you will get the money to start your business is very important because start-up money means just that, “START-UP”. It’s only money to get you started.
Once you get your business going using the start-up money, what are you going to do if you need more money to keep the business going? Most people who start a home based business don’t have prior experience and don’t understand that the profits don’t start coming right away, if they come at all. This is one of the main reasons that so many would-be small business entrepreneurs fail because they felt that the star-up money was all they needed. When the start-up money runs out and they have tapped all of their financial resources they wind up out of business and in more debt than they were in before they got into business.
Many people have found themselves in a lot of debt because they tried to start a home based business that did not work out for them.
Being in business and being in debt go hand in hand. The problem for many people is that they have not prepared themselves for the fact that when you borrow money, “YOU HAVE TO PAY IT BACK”.
If you are planning or have already started your own small home based business, here are some things you might want to keep in mind: Don’t start your business until you are ready. Make sure your start-up money can carry the expenses of your business for at least three or four months, or longer. Prepare a budget, include all of your business expenses, no matter how small. Always keep an eye out for ways to save money on the things that you need to run your business. Don’t buy what you don’t need. Keep accurate records of every penny that you spend. If you have to borrow money to get started, be sure that you have a way to pay it back if your business fails.
If you are a true entrepreneur, you won’t let failure stop you from trying again. However, if you get your self into a lot of debt, it can be difficult to get things going again. If you have gotten your self into a lot of debt don’t try to borrow your way out of it. The only real way to get out of debt of any kind is to increase income or to decrease out flow. If you have to work an extra job to get your self out of debt, DO IT! If you have to cut back on doing some things that you enjoy doing, if it will help you save money, make the sacrifice. You do take a financial risk when you try to start your own home based business but if you plan carefully and spend your money wisely, you won’t have to worry about getting your self into more debt than you can handle.
Gregory H Bey offers free business building advice to new home business entrepreneurs. You can down load his free ebook by going to:
http://www.go2homebiz101.com
or you can call Greg directly to ask about his home business advisory services at: 1-412 363-7187