The first advice I would like to give, you may or may not set well with. Most of us have had negative experiences with debt. In America we are taught that we “gotta have it” and “now”. So buying things we can’t afford is very common. Personally our family has come to the point of deciding never to borrow money again, not from the bank, not from family, not from the store. I don’t know that I can convince you of taking such drastic measures but, I hope that I can at least convince you not to start your business with borrowed money. So my advice to you is that you should under no circumstances go into debt to start a business.
This means that if you don’t have the money to start your business than you don’t start that business until you do have the money. This may not be a problem for those of you would want to start a business with little start up costs but for those of you who need to invest a large amount of money to start might be feel that it is impossible to do it any other way. Lets explore the possibility of NOT going into debt and how and why this should be considered.
In the article “Should I work from home” we touched on the fact that it is important to find a business that you have a passion for. If you have found this business that brings you joy, is it safe to say that if you started it with debt that it may feel less joyful? The burden of debt is just that – a burden. Why do we want to ruin the joy of finding the right business with the burden of debt.
So your response at this point may be ” There is just no way I can do it without debt”. And my question to you is. Are you sure? What our culture here in American as well as others, has been lead to believe is that if we don’t act right away we will miss the opportunity. I am all for opportunities but unless they are free we should not buy into to the instant gratification mentality our culture has conformed to. Good things can also come with patience. If your goal is to start a business that you love but you don’t have the funds to start it then at this point your job is to have patience and become creative.
So where do you get the money for this new business you want to start? Only 50 years ago or so borrowing money was a very rare occurrence, yet how did people start businesses or purchase high priced things? The answer is ,they SAVED. This seems to almost be a bad word in todays culture. Why save when you can just borrow and make payments? What saving can do instead of borrowing is give you the satisfaction of accomplishment. When you have saved for something that you have been working so hard on and then actually get to buy it, the joy and satisfaction and even relief from that experience is well worth the wait.
You may feel that waiting to start the business of your dreams is not an option but it is. By making a plan to be patient and save you can not only start your business of right but you can use the money you do earn right away to grow your business and support your family. Read the two stories below about two different cases of women who chose to start the business differently.
Mary is a mom of 4 children. Her husband worked 60 hours a week and still they were not making enough money to make ends meet. They had a mortagage payment, 2 car payments and a few thousand dollars in credit card debt. Mary and her husband decided that her going to work outside the home was not an option so she decided to look into a home-based business. Her friend was a consultant for company that had a good reputation and nice products so she decided that she would become a consultant for this company. She was told that the products would practically sell themselves and she like them so she thought it wouldn’t be that difficult the make some extra money. Her upline told her that she could easily sell these products and would check with her to find out how she was doing.
Since the family could not make ends meet, Mary and her husband decided that they would put the $200 is would cost her to become a consultant on a credit card because she thought she could pay it off with a few parties.
After a few parties Mary did make enough to pay off the $200 but because they need the money she decided to buy groceries and other needs for the family. Mary did find out that after a while booking parties was getting more difficult to do so she had to really work hard on promoting and calling people. She started to feel like people where avoiding her because all she was doing was trying to sell them her products.
Mary eventually started to loose interest in her business and quit consulting for this company. She had a ton of products that she would eventually give away as gifts. Mary ended up having to go to work at Walmart on the nightshift after her husband got home from work.
She still has the $200 debt that she started with.
Lucy is a mom of 2 children with one child on the way. Her husband works 60 hours a week plus the 2 hours commute round trip. They had a mortgage payment, 2 car payments and a couple thousand dollars on credit cards. Lucy and her husband decided she was going to need to find some kind of work to help the family financially. Lucy and her husband had gone through a lot of financial trouble throughout their marriage and decided that they had had enough with debt. The had become sick and tired of being sick and tired of the foolish financial decisions they had been making and decided they were not going to borrow money again.
Lucy decided that she wanted to find a business that she enjoyed so that it could be fullfulling for her. Since Lucy was a child she loved gardens. She spent much of her life working in a garden her grandfather. She was very knowledgeable when it came to gardening. Gardening was true passion of hers. So Lucy decided she would try to find some way for her to work with her love of gardening. She asked her friends that had always been supportive of her to see if they had any ideas of what kind of business she could do that didn’t require a lot of money, with her children with her, and while she was pregnant.
After getting a few good ideas and a few bad ones she decided she was going to start gift basket business. Her baskets would include all the essential tools for starting a garden, plus a free lesson in gardening for each new customer. The cost to start her business was going to be around $200 for supplies. Lucy and her husband had decided they were not going to borrow money but did not have any money to invest so Lucy had a garage sale and sold some things on ebay. She sold enough stuff to cover her $200 investment and got started right away. Lucy and her husband had also decided to sell one of their cars and buy a cheaper car that had no payments to help reduce some their stress.
Since Lucy life was very busy already she had to work hard on the planning of her business. She worked on it during the day when she could as well as nights after the kids were asleep. She enjoyed working and planning and soon came up with everything she needed. She had a great support group of friends cheering her on because they knew how much she loved gardening and thought this was a great plan.
Lucy soon was making a much needed extra income and after 6 months she her business had grown so much she decided to offer her products to the world through a website.
Lucy never had to borrow money and her business made her happy and an income. She loved to teach other people what her grandfather taught her about gardening.
Mary had made the decision to become a consultant for a company that she had no passions for. She did like the products but selling them didn’t give her a sense of fulfillment. Because she didn’t believe in the product from her heart others noticed that and felt all she was doing was trying to sell her stuff. She also decided to go into debt to pay for her kit that she ended up never paying off but instead adding to the debt she was trying to reduce.
She also lots heart because she didn’t have anyone but her upline supporting her.
Lucy on the other hand had come to a point of change and decided never to borrow money again. She also chose a business that gave her joy and was fulfilling. She used her good supportive friends to ask advice and bounce ideas off of. She started her business with no debt so she was able to use her earnings right away for growing her business as well as use some for family needs.
Although these two characters are fictional they both have a lot of my own story in them. I was a Mary and I am now a Lucy. I encourage you to really take time to think about your decisions with choosing a business. I also know that there is no real good reason to go into debt for any business. If you really feel the business is something you truly have a heart for then save, save, save your money so you can start your dream business of right.
As a side note: My husband and I have done a complete turn around with the way we handle money and we owe it all to Dave Ramsey. Dave Ramsey is a very motivational, sound financial teacher and radio host. I highly, highly recomend reading his book “Total Money Makeover” or going through one of his “Financial Peace” courses in your area. You can change your family tree! You can find out more about him on his website –DaveRamsey.com