Every great company was once just a good idea. So, if you want to start your own business, chances are you already have the main ingredient for success, which is your idea. It has likely been exciting for you to conceive your idea and continue to nurture it in thought so getting things officially off the ground will be especially thrilling. A less common facet of a startup though is personal money management. The financial model that you build for your business will no doubt have some common threads between it and your money management style with your personal finances so having a handle on that as a stepping stone towards success is in your best interest.
Pick a Strategy
Too many times future entrepreneurs let their excitement and forward-thinking cloud their focus, a common occupational hazard. Thinking only in the future can wreak havoc on your present, so it is wise to remain vigilant with the current demands of your personal budget. Large areas of debt are a good place to start when picking a strategy to prepare your personal finances for your future startup.
Consolidation is a common route to take when making money moves. When starting a new business, you will probably need to apply for new loans so being in good standing with your existing ones, like student loans, for example, is in your best interest. If you still owe on your education debt, consider refinancing and/or consolidating to get payments as low as possible. If you are unsure exactly what this entails, there are resources available to assist your decision making. There is a guide to help you understand your options and figure out the best choice for you when it comes to student loan consolidation and what borrowers need to know.
Secondary Lines of Income
Starting your own business can happen in a variety of ways, there is no one size fits all guaranteed success plan. Audit your financial position on a personal level to decide whether it is in your best interest to continue to work while you develop your business or if you are able to give your time, and your income, completely to this new venture. Either way, finding a secondary line of income, a side hustle, to be sure that you have at least some money coming in might be smart.
Opportunities like meal delivery services, childcare, or grocery delivery services are great options because they are on demand. Meaning you can work when your schedule allows, and you are in control of your own income. Secondary lines of income can act as a line of defence against the volatility that can happen with opening a new business. Side hustles are also low risk and low commitment making them easy to break away from if your startup takes off and demands your attention full time.
Are You Ready?
Asking yourself if you are ready and giving yourself an honest well-thought answer is your biggest ally in launching a successful startup, timing is half the battle. Things to think about are, do you understand business costs, is your credit score in good enough shape to lend itself to acquiring loans, do you have money to spare in case of emergency? If these prerequisites apply to you and you are confident in your idea and your ability to manage your plan moving forward then you are ready to take the next steps.
