One of the greatest hindrances to starting a small business is securing the start-up funding. It is almost instinctive to think of a small business loan but banks only grant those loans to businesses that have been operating for a minimum of three years and can illustrate financial stability. So the question is, how is a potential small business owner who has a clear vision of his or her business supposed to secure the funding to start it? There are several ways to generate money in addition to your main source of income:
- eBay: Clean out your closets, take your gently used items that you no longer use, and post them online to sell. These items will be of more use to you when they are sold and you are making money. The average household has hidden treasures that are collectively worth $1,000. With $1,000 toward the small business start-up fund, the future small business owner can cover the costs of filing the paperwork to start the business as well as other administrative costs.
- Tap into your skills: Use your skills or hidden talents to generate money in addition to your main source of income. For example, if you have extensive knowledge in a specific subject area or you are a teacher, consider tutoring. A certified teacher can charge from $30 to $50 per hour depending on the region, the grade level, or level of difficulty. Even someone who is not a certified teacher but an expert in the field can charge about the same hourly rate. Many also tap into their skills that involve using your hands. Crafts, sewing, jewelry making, or automobile mechanics have great earning potential.
- Cut spending and expenses: If at all possible, cutting daily and monthly expenses can generate additional money. Deciding to hold off on a splurge purchase and putting the money that would have been spent on that item in a special savings account will eventually add up. For some, that means something as simple as passing on the next shoe purchase or downgrading to a less expensive cellular phone plan. For those who eat out on a regular basis, begin planning your meals and cooking instead of eating out. The money you spend for food that only lasts for one sitting can be used to purchase groceries that can last days longer.
- Make a game out of saving: Saving money can sometime be difficult. However, when you challenge yourself and make a game out of it, saving can be fun. An example of a challenge could be after saving $200 or going a month without unnecessary spending, treat yourself to one of your favorite things. If you use cash to make purchases, take the change that you receive from the purchases and place those coins in a piggy bank or an electronic bank that tabulates your money each time you insert coins into it. Select a timeframe, such as 12 months, to engage in this savings game and at the end of each month, take what you have accumulated in the savings receptacle to the bank and deposit the amount in your special savings account.
These ways of securing funding to start a small business may take some time but when done with diligence, such approaches can yield great start-up capital.