Have you ever wanted to start your own business? If so, what’s stopping you? Here are some ways to fund your dream to become an entrepreneur.
Are you a freelancer with big entrepreneurial dreams? Have you ever wanted to start your own amazing business? If so, what’s stopping you? If it’s money or your student loans, that should never deter you from fulfilling your goal of becoming an entrepreneur. In fact, there are many ways to get small business funding as a freelancer, even if you have debt.
Right now, you might be unwilling to take out a business loan or ask your family for start-up funds. And, that’s OK. In fact, starting a business without debt is a great way to ensure you’re profitable sooner rather than later.
So, how do you get your business off the ground without digging yourself into a deeper debt hole (or asking your parents for cash)? Keep reading.
1. Don’t Quit Your Day Job
Look, it would be great if you could put in your two weeks notice to the job you don’t like and sail off into the sunset with “CEO” attached to your name. But, that’s just not reality.
Instead, fund the start of your business yourself with your own work ethic and elbow grease, backed by the funding from your day job salary.
This is how I started as a freelancer. I used to teach writing at a university, and every day, I’d come home after grading papers and preparing lessons to work on my blog and other projects as a freelancer. Sometimes I’d stay up until 1 or 2 AM completing projects and then wake up and go teach early the next day.
My hard work paid off. It took two years, but I remember the exact day I realized my side income surpassed my day job income. These days I’ve been self-employed as a freelancer for four years making double what I made at the university.
Keep in mind this might mean declining invitations from friends and giving up some short-term fun in exchange for long-term business success.
Bartering is an ancient practice. After all, it’s the way people received the goods and services they needed when they didn’t have paper money to exchange.
When you barter with someone to help start your business, you’re likely exchanging a service for a service. For example, if you’re a copywriter, you might exchange copy writing for a graphic designer to create a logo. If you’re a hairdresser, maybe you’ll exchange a few haircuts to a lawyer who can help you form your LLC or get a trademark.
When it comes to bartering, my advice is to keep it as professional as possible. This should not be a handshake deal or someone will get burned. Write out the terms and when you expect each party to deliver their part of the deal. Then, keep up your end of the bargain.
If it works out, try it again for a different service. This is a great way for entrepreneurs to help each other without exchanging money. The great news? This frees up more of your money that you can allocate to your credit card debt or student loans.
3. Exchange Equity for Funding
Another way to get the money to start your business is to go to angel investors or venture capitalists and exchange equity for their funds. This means that they could give you the funds you need to start your business, whether that’s $10,000 or $500,000; in exchange, they own a piece of your company.
It might pain you to think of giving away your company’s equity, but some of the largest companies in the world used investors to get their start. There are even business incubators you can apply for where you’ll get a certain amount of money to start your company, plus advice and coaching for a set amount of time. Some of the most successful incubators, like Y Combinator, have helped businesses like Reditt and Airbnb get their start.
4. Try Crowdfuding
If you want to raise money without giving away equity, try crowd funding. I love finding new, unique businesses to support on GoFundMe, whether it’s a plush stuffed animal for my kids or a really unique piece of luggage.
I even know of a children’s book author who used a crowd-funding site to raise money to hire an illustrator for his book. So, don’t think that you have to have a large project or expensive piece of equipment to get the funding you need to begin.
Choose the Right Path for You
Ultimately, there are many different ways to get small business funding to pursue your dream to become an entrepreneur even if you’re dealing with debt from credit cards or student loans. It just takes a significant amount of thought, research and preparation to find the type of funding that’s right for you, whether you’re a freelancer or starting a large tech company.
Many entrepreneurs choose to fund everything themselves, bootstrapping things on the way. Some large companies have investors. Others, like Spanx, didn’t use outside investors when they started at all.
So, it really comes down to your own preference, how you want to build your business, and whether or not you want to exchange a piece of it for upfront funding. Either way, as long as you’re committed, you should be able to find a way to fund your business, even if you don’t have your own cash on hand to get it started.
Catherine Alford is the go-to personal finance blogger for educated, aspirational moms who want to recapture their life passions and take on a more active financial role in their families. Named the Best Contributor/Freelancer for Personal Finance in 2014, she is also the founder of BudgetBlonde.com, an award-winning personal finance blog.
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