If you’re interested in maximizing your income and stretching your creative muscles, you may find it helpful to start a side business or new venture. But if it’s going to be worth your time, you’ll need a proactive plan that paves the way for success.
The Appeal of a Side Business
Before we can dig into the intricacies of starting a side venture and, more specifically, how to finance it, let’s drill down to the core of why you should. Besides the obvious potential for extra income, a side business is appealing for the following reasons:
1. Running a Side Hustle is Reinvigorating!
If you’ve been feeling a bit burned out in your regular day job, the excitement of a new side hustle will provide new energy and meaning that will benefit you from the time you wake up in the morning until the moment your head hits the pillow at night.
2. Forces Personal and Professional Growth
When you run your own business, you’re forced to do things outside your comfort zone. As a result, you experience rapid personal and professional growth.
3. Creates Discipline
When you’re trying to manage a job and a side hustle simultaneously, you have no choice but to be disciplined. Even though you have more on your plate, you’ll find it easier to be productive and efficient with your time.
4. Allows for New connections
Personal and career development is all about the people you know and the relationships you forge. Running a side venture – no matter how small – will allow you to expand your network and build out valuable new connections.
There’s never been a better time to start a small side hustle. With the internet, cost-effective cloud solutions, powerful mobile devices, and changing perceptions about entrepreneurship, it’s practical to keep your day job and build up a side venture. You can then continue to juggle the two, or eventually turn your side venture into your main source of income. It’s a flexible opportunity with the potential for significant rewards.
4 Ways to Finance Your Newest Venture
The biggest challenge people face in the early days of launching a side business is figuring out how to finance the project. And while there isn’t a standard solution that works across the board, there are some options to consider:
1. Bank Loan
A traditional bank loan is usually the first financing product entrepreneurs consider. If approved, you could have access to a large amount of cash to get your business up and running. However, banks are being more cautious these days and may not lend to someone without an experienced track record.
2. Personal Loan
A bank loan isn’t always a viable option. And even when it is, you have to clear a bunch of hurdles just to get the paperwork squared away. If you’re looking for an easier solution with a quicker turnaround, a personal loan may be your best bet. Spend time researching personal loan options and look around for the best terms. These installment loans generally start at $250 and go all the way up to $40,000 or more.
3. Home Refinancing Loan
If you own a home and have a considerable amount of equity in it, you may be able to refinance your mortgage and access some cash. Obviously this isn’t the ideal way to go about things, but it can be a useful strategy under certain circumstances. When refinancing, take a variety of factors into account. First off, calculate what your new monthly payment will be. Does the home still fit into your budget? Secondly, what will it cost to refinance? Depending on the fees, this may or may not make sense.
Finally, you can pull yourself up by your bootstraps and cash flow the business from your personal savings account. If you have some cash in the bank and are able to create a little space in your monthly budget, you could find a way to fund the venture without having to pull out a loan. But if you do make this choice, be sure to leave yourself a large enough emergency fund to deal with unexpected personal expenses that pop up from time to time.
Ready, Set, Go!
While a side business is never easy to start, there are some practical steps you can take to reduce friction and make the process as smooth as possible. By figuring out financing early on, you can reallocate your time and energy towards the creative processes that allow you to build and grow your business.