HOW TO SAVE FOR BUSINESS START UPS
HOW TO SAVE FOR BUSINESS START UPS
Most entrepreneurs believe that one who wants to go into business must first go into debt before being called an entrepreneur, it has been deeply entrenched into the DNA of a lot of young entrepreneurs which firstly scares them out of even trying to start up a business. It has eaten so deep that we hardly even consider the possibility of saving up the money for the cash flow needed to fund a start up and avoid going into debt. One of the reasons this happens to us is that many of us lack nearly enough cash to start a business. And, because we live in a fast food culture where the word “patience” is absent from our vocabulary, we are not willing to put forth the sacrifice it takes to actually save more than a few naira notes at a time. The various business funding programs we have seen recently are not even helping matters in ensuring the young ones harness their capability of saving to achieve their entrepreneurial goals.
While you, like most people are plagued by these issues there is no reason you cannot move past them and save up enough money to start your own business. Doubt this? Just read on. At the time you do not have enough money saved up to start a business, it is either you keep the idea for another day, give up equity in your start up or attach a lot of debt to your name and business As an aspiring entrepreneur, you would need to change your personal finance habits and find a way to increase your savings.
Slash Your Discretionary Spending
One might be poised to question his/herself on steps to aggressively fight debts. Slashing your discretionary spending is a good way to start. Channel that money towards your debts. Between eating out, online shopping, grabbing drinks on the weekend, and buying things you do not really need, you should be able to come up with a few naira notes per month. Over the course of a year, this can add up to a considerable chunk of change
Run Your Business From Home
This happens to be one of the easiest ways you can start saving a lot of money that comes into your business. In doing this, you have to carry out the feasibility of your business within the area from where you want to operate first. Instead of having to wait to raise funds for your business, it is best to carry out your dealings from home or you use a friend’s place to run your business. It would not only save you rent money but would also help you test run the tide in which the business would go. Paying rent every month is far way cheaper than renting out commercial office space, especially as a start up. With this, you are afforded time to approximate all your monthly income and also calculate the best distribution of the costs.
Build Up an Emergency Fund
Before focusing on cultivating money to start up your business, you would have to build up your own cash savings. It is a general rule to set aside at least six months of living expenses before you even think of quitting your day job and running a startup up. That is majorly because it might take a while before enough money starts coming in from the business to begin paying yourself a salary (approximately six months after starting up, in many cases it could be more than that). Now, during this uncertain period, you would need a sizeable emergency fund to pay your bills, take care of the family (if married). If the reverse is the case, you would have to take on a part time job, joint with the business or look for another solid plan that would not add debt to the business during its early stages.
Buy Used Equipment
One major mistake a lot of young entrepreneurs make is starting up a brand new business with brand new equipment or machines. Considering that what you have on ground is not enough to accommodate the expenses that lie ahead is quite expensive. New equipments are mostly costly and new budding entrepreneurs are not to dare going for such. An emerging entrepreneur is better advised to look for established companies who are in the same sector, and ask about the availability of those items. Seek for established companies in the line of your business and ask them about the availability of the equipment that you need, some may be willing to sell or lease it to you at a rate which is negotiable but make sure it is in good working condition. Also, get an expert who can help detect any flaws in the equipment and if it can be repaired but if not, leasing would be a better option.
No doubt, you can be easily caught in spending that your mind does not think towards savings. Over time, this can have some dramatic effects on you and your business; to deal with this issue automating your saving process is a smart option. If you can, find a bank that does automatic savings, there are also mobile applications which can easily do this without you visiting a bank; examples include Piggyvest, Clarity Money, Digit, Mint etc. The key is to find a solution that takes you out of unnecessary expenses, you are your own worst enemy in keeping your savings and automated savings solutions like these, help keep you grounded.
Start Small and Slow
When you first start your business, there is always this push to do everything at once and to do it big. In many cases, such actions lead inexperienced entrepreneurs to tackle surface tasks rather than the foundational building blocks that actually make a business. Keep it slow and steady.
Get a Grip On Your Savings
When you are launching a business, a key factor is in how you manage your money and that would determine whether or not you would be successful. Though some people can turn small ventures into million dollars businesses, others might likely find it more reasonable and less risky to cash flow their ventures and avoid debt. If your path is that of the latter, make sure you have a game plan to acquire and grow start up money for business that will help you burst out of the starting gate with great intensity.
- Guaranteed: Process Your BOI Loan with Accredited Consultants - August 12, 2020
- N1.5 Million Grant for Female Entrepreneurs. 5 minutes Application - August 7, 2020