Who hasn’t dreamed of starting up a company from scratch and pursuing a dream job? Becoming an entrepreneur can feel like a big financial risk, as you put everything on the line in order to have a go at making it on your own. Thankfully there are ways to reduce the risks of your start-up, allowing you to follow your dreams without putting your future on the line to do it.
Research Saves Money
The most valuable thing for any new company is information, and thankfully you can usually acquire it for nothing more than the cost of your free time. Look at other companies who are successful in the field you want to enter to see what they are doing that works. Also check for possible competitors to be sure there is a need in the community that your company will fill.
Assess Your Company’s Needs
Before you can start worrying about financing your new company you need to have an accurate count of how much money you need. To do this it’s essential to have a list of everything you will need to be successful, including staff, space and supplies. The more detailed your assessment is the more prepared you will be for success.
Seek Outside Funding
Just because you don’t have the money in your savings account doesn’t mean you are out of luck. There are a number of options available to an entrepreneur in need of financial assistance.
- Loans or Grants: From federal grants available for start-up companies which meet certain requirements to loans from bank, you can seek outside sources to help you pay your initial costs without giving up ownership.
- Crowdfunding: An increasingly popular way to get a new company off the ground, particularly one which offers a product instead of a service, crowdfunding allows you to seek out backers for a set goal, with the money delivered if you meet your funding target.
- Partners: Adding on a partner or two with deeper pockets is a great way to secure funding. Whether you seek an outside investor purely interested in capital gains or a friend or family member who wants to help out and get in on the business, offering a stake in the company in exchange for funds will get you off the ground.
Trim the Fat
Now that you have determined what you need for success and sought out the funding to make it happen, you may find that the two numbers are not lining up as well as you had hoped. Look back at the list of operational needs and check for areas where you can lower costs. If you were planning to outsource elements of production or hire staff for jobs you can handle yourself, these are ideal areas to lower your costs. Decreasing the size of your initial office or retail space can also greatly reduce your costs. Always look to keep your business lean in the beginning, but don’t sacrifice quality as the short term savings will be cancelled out by lack of long term growth.
Consider Keeping Your Day Job
Not all start-up companies can be done part time, but if you are able to maintain a day job while beginning your company you can decrease risk significantly. A second job keeps your income stream steady so that you are less-reliant on immediately turning a profit, and more capable of responding to the need for additional spending if it arises.
Becoming an entrepreneur in charge of your own company is one of the most exciting career moves you can make. Seizing the reins of your own financial stability and chasing your dream job is scary, but rewarding. By keeping the principals of founding a company in mind you’ll put yourself in the best possible position to succeed.