Charting the Path to Entrepreneurship When You Have a Poor Financial History
This is a guest post from Gloria Marinez (see her bio at the end…).
If you’ve always dreamed of becoming a business owner but you have a checkered financial past, you might be afraid to jump into entrepreneurship. According to Capitalist Creaions, fear is one the biggest reasons people don’t pursue business ownership. However, you shouldn’t let money worries prevent you from becoming your own boss. There are ways to found a startup even if you don’t have a perfect credit score or a huge amount of savings.
Follow these helpful tips to get started:
Do your research and write a detailed business plan to pave the path to success
A successful business requires strategizing. Start by defining your business products or services. Then, conduct a market analysis to see how viable your business offering is. Sweaty Startup explains how to do a market analysis taking into account factors like pricing and accessibility. This will help you determine the potential demand for your business.
With your market analysis complete, you can write your business plan. This is a guidebook to how your business will be run and includes everything from financial projections to marketing plans. The Business Plan Shop provides templates you can use to write your plan. With this preparation, you’ll be better able to avoid financial problems.
Look beyond banks to get the startup funding you need
If you’ve had financial troubles in the past, like going into debt or filing for bankruptcy, you probably don’t have the best credit score. My Fico explains that a credit score tells lenders like banks how likely you are to pay back a loan. A low credit score can thus impede your chances of getting a business loan. Luckily, there are alternative funding options.
Crazy About Startups provides a list of 10 other types of funding you can use to cover your startup costs when founding your business. Options include joining a startup incubator or accelerator, trading equity or services for assistance, or applying to local angel investors or venture capitalists. You can also try crowdfunding online.
Implement cost-saving strategies in your day-to-day business life
Once you get the funding you need to actually start business operations, you want to keep your overhead costs as low as possible. There are many ways you can cut expenses—for example, sharing an office or establishing a virtual office instead of taking on the full cost of commercial rent yourself.
Alternatively, you could easily and affordably create an office in your home. If you have a room that you’re not currently using, repaint the walls and put down new carpeting. If you have hardwood floors, hire a pro to give them a little TLC. Here’s the best part: If you decide to sell your house at some point, these types of updates can actually help improve its appraisal value and increase its appeal to potential buyers.
The Balance Small Business provides additional tips for reducing overhead costs, like purchasing equipment second-hand and embracing the power of digital tools. Automation technology can help save time and costs on everything from marketing to customer service, social media management, and more. You can also use tools like an invoice maker online. This can save you from having to pay for designed and printed invoices.
You can also save valuable time with the right payroll system. Look for an option that includes time tracking, which will also simplify creating employee timesheets and employee management. Mobile access is also a big bonus. Being away from the office is no problem when you can manage your team on the go with a mobile time-tracking platform.
Starting your own business is both exciting and nerve-wracking. Taking this step can be even more daunting if you have a history of money worries. However, it’s not impossible. The above guide explains how to become an entrepreneur even with a subpar financial past.
Gloria Martinez – Gloria started Women Led to celebrate the advancements women have made and inspire women to become entrepreneurs and seek promotions in the workplace.
Shawn Kinkade Kansas City Business Coach