7 Step Guide to Budgeting a Solo Business Without Outside Investors

You want to start a business, but you want to keep total control of your outcomes, policies, procedures, and products. If you are going to enlist the help of investors though, they are going to want a say in those things. So can you budget a solo business and do everything on your own?

The answer is yes, yet at the same time it depends on how much capital you have and what you are willing to do to make that work. Here are seven steps to budgeting a solo business with no investors.

Budgeting for solo business owner

1. Save Everything You Can

Obviously the best way to start your business is to be able to pay for as much as possible without going into debt. This means that while preparing to start your business you need to save as much as possible. This may mean giving some things up for a while until you get your business up and running.

Here are some examples of things you can give up to save some money.

  • The Coffee Run: You may spend up to $5 a day or more on coffee. Stop. Make coffee at home or give up coffee for a month, and you will have another $150 in your pocket. It may not seem like that much, but everything adds up.
  • Eating Out: Every time you eat out instead of eating at home, it will cost you somewhere in the neighborhood of $30 to $100. Give that up for a month, you have $120-$400 in savings. In just a few months, you are over $1,000.
  • Unused Memberships: Do you have club memberships or other monthly expenses you are not using? Give them up and save hundreds.

Even in this saving period though, don’t forget to take care of yourself and treat yourself. Just make saving for your business launch your highest priority.

2. Gather Cash

As mentioned above, the number one need you will have as you start your business is cash. So one of your first steps is to gather your cash and put it in a business checking or savings account. Part of the reason is that lenders will look at how long money has been in your account before they loan you money, to make sure you have not borrowed it to beef up your balance.

This means whatever savings or personal funds you are drawing from to get cash need to be consolidated into one place preferably under your business name. Any of the cash you save from taking the steps above and giving things up should be also added to this account regularly to prove that you are saving on your own, and to isolate the funds so you are not tempted to use them for something else.

3. Work Part Time

Sometimes the income from your business is not enough at first to pay all of your bills and provide the income your family needs. For an extra influx of cash, work part time. However, be careful what job you choose to work and make sure it does not interfere with your business hours.

This means you may need to work nights or weekends. One of the best options is to drive for Uber or Lyft, or both, as this can be good money and gives you some down time between rides to work on other tasks. Other jobs that bring in good cash are delivery, food service, at home phone or chat support for various companies that have 24-hour customer service, and more. Be creative.

A word of caution. If you get to a point where it is more profitable to lose the part time job, and focus on your company full time, get rid of it. You want to add money to your business, not take it away. It is a delicate balance, but follow your instinct and you will come out just fine.

4. Sell What You Don’t Need

Yet another way to gather cash: sell what you don’t need. Have some summer toys, a boat or motorcycle that you can do without? Sell them for cash. You can always buy new ones when your business takes off and you have more time to spend on them.

Do this with some caution. Don’t lose money on these items or sell them for too little. You are not desperate, so hold out for a reasonable price. Your possessions, like your time, are valuable, and as mentioned above you still need self-care. If motorcycling is your hobby that helps you decompress, don’t give it up. Make sure what you sell are things you don’t need.

Taking loans and pay the interest

5. Borrow Wisely

No matter how much you scrimp and save, you may need to borrow money to get started. Don’t do so foolishly. There are several options and weigh each one equally:

  • Secured Loans: You can get a small, secured business loan using assets you have to secure it. If you don’t have business assets, you can use personal ones like your home or other personal property. Use caution here though. Don’t borrow more than you can afford to pay back.
  • Unsecured Business Loans: Interest rates will be higher on these loans, but they are also a good way for your business to build credit.
  • SBA Loans: For longer term funding needs, the small business administration also offers loans at low interest rate, but you will have lower payments and longer to pay them back.
  • Personal Loans: You can also take a personal loan if you need to. Your bank or credit union will offer these, but they will often be for lower amounts and shorter terms than other loans.

Just be sure that you borrow responsibly, and never take out a loan you cannot afford to pay back.

6. Save Money on Purchases

One way to save money so that you do not need any investors is to purchase used equipment instead of new, and bargain shop for what you have to pay full price for. For instance, if you are starting a mobile restaurant business, you can find used food trucks for sale, and modify them to meet your needs. Since these are often not driven far, the vehicle part is generally in good shape, and you can find good used equipment to set up the cooking area. Likewise, you may decide that looking for food trailers is a better decision after realizing your truck has a trailer hitch.

Buying them used will save you money, and you can join clubs and use credit card points to save on new items if need be. Look for sales, and negotiate bulk discounts where you can. The more you save on purchases, the less capital you will need to get started. Even if you aren’t starting out with the equipment of your dreams- your business will have more capital to sustain its infancy.

7. Weigh Needs vs. Wants

Lastly, weigh what your business needs against what you want. Are there things you can do without for a while? Can certain items wait until you can afford them? If so, be patient. Take care of what you need first, and then go after wants when you can afford them.

ou can start your business on your own with no investors. .But you will need to be wise in your decisions and make sure you gather cash and borrow wisely. It may take a bit of sacrifice, but with a perseverance and hard work, your efforts are bound to pay off.

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