How Should I Pay for a New Business Start Up?

Many people dream of starting a business of their own. Few people, however, will actually go out and do it. Often, this is because of the costs associated with new business start ups. Yet, there are many options for getting a new company started. You need to decide for yourself which is the best method. Sources of start up funds can include credit cards, loans or lines of credit, or even borrowed money from family or friends.

Whichever you choose, know that start up costs for a business do not have to be astronomical. In fact, it is best to start with as low an investment as is possible. Of course, your company will soon enjoy success. But, just in case things economically turn, whether locally or nationally for the type of business structure you are in, it is best to be as safe as you can from the start to minimize any potential losses.

There are many factors that can change a business's chances for success which you cannot foresee no matter how well you plan or organize the start of the company. Unless you have plenty of money to spare and are willing to risk it just because you believe in the venture, invest as little as possible from the start in the business. If you can perform the business out of home, for example, it can eliminate paying for office space which can mean saving a few hundred dollars in overhead at the very start of the company's life.

Depending upon your budget or level of comfort with risk, you may find you can realistically start up the company using credit cards. This can be an easily accessible form of capital for your company right from the start. However, this too may be a form of start up funding which is best for home based companies or very small ventures such as those selling unique items or ideas online. For larger businesses or those incorporating it can be best to make use of loans available to businesses from local banks.

These can be hard to qualify for, and they often require the business owner to submit a proper business plan, profit and loss statements and other documents which may be new to novices. No business owner needs to hold a degree on the subject in order to succeed or qualify for start up funds. But, there are certain loans or lines of credit which may be better options for owners with some previous experience.

Trying Several Methods at Once

Borrowing from family or friends is an option, too. However, it is important to really carefully consider the realities of what would happen were the business fail to earn as much as you borrowed. It could damage a relationship, so think very carefully before approaching someone you care about to lend you money or even co-sign for a loan for business equipment or inventory.

It is possible to make use of a few methods to pay for a business's start up costs. This helps spreads the risk out more, and allows the payments on any loans to be potentially more manageable. If you are going to make use of credit cards, once the balances begin to be paid down, the payments on the cards become lower and any revenue from the business used to pay them can begin going back into covering overhead. The more the business grows, the more you can eventually find and qualify for additional ways to fund its growth and pay for the business start up.

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