It’s no secret that starting a business costs money. Though many sites claim you can ‘start a business for less than $1000’, they’re often a false economy. After all, any entrepreneur will tell you that materials are only half the expense. They also have to think about a marketing budget before they stand any chance at success. And, that alone can come with a hefty price tag.
These startup expenses are the main reason many governments offer loans for entrepreneurs. Such loans are a fantastic way to get going. But, many of us are understandably reluctant to take this route. After all, a new company is untested territory. At this stage, there’s no guarantee you’ll see any money back. And, if that happens, you could fast fall into debt after taking the loan route.
Hence why many entrepreneurs decide to fund things from their pockets. Some spend years saving, while others use their rainy day funds for the cause. Then, if they do succeed, they get to keep every cent of profit.
But, this is a double-edged sword. While funding things yourself is great if it works, it can also lead to issues. And, if these arise, you might be best taking a loan after all. But, what types of issues can you expect to see?
You’re playing a game of risk
Avoiding a small business loan is all about avoiding risk. And, there’s no denying that personal finances aren’t tied up in interest rates and the like. But, they do bring risks of their own. Far from just meaning you’ll lose your company, these often result in personal issues which are harder to come back from. If you aren’t careful, scraping your bank balance could even result in struggles to keep up with car and mortgage repayments. And, if that happens, you could face impending foreclosure and repossession. Not only would that damage your personal life, but it’d also leave you without a base. As such, you’d be unable to keep your company afloat after all. What’s more, this could lead to your having to declare bankruptcy, and thus eliminate all chance of a loan. So, make sure things don’t get this bad. If your business costs are starting to impact your personal life this way, consider financial help after all.
You’re cutting company corners
Another red flag is if you have to cut corners in your company. Savings don’t last forever. And, the moment you see those funds depleting, you might give in to the temptation to cut corners on everything from production to marketing. And, that can cause serious problems when it comes to growing your business. After all, your reduced marketing efforts will lead to less custom. And, your reduced quality products won’t manage to impress. Instead, make sure you can always afford the best in every area. If you start struggling, admit that you need help. At least that way, you can provide a service which is sure to impress and keep customers coming back.