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Starting a Business with Very Little Capital

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By Debbie Gregory.

Have a great idea for a business but very little money? Don’t let that stop you! While starting a business with very little capital can be challenging, it can be done.

In any business, cash flow is everything, so starting with very little capital works best if you get paid immediately, have low overhead, and don’t have high inventory or labor expenses. You also need to plan carefully and conserve all the cash you can. Every dollar spent must be a dollar that is going to grow your business.

By building your business around your skills and knowledge, you can avoid having to rely on outside assistance. When you do require outsourcing, get the best deal you can on what you actually need. You can drop $500 on fancy business cards, or $50 on traditional ones. Choose wisely.

Generate buzz for your business through word of mouth and social media, which is a great way to gain exposure and interact with potential customers.

As you launch your business and for the first few years, you will probably be the person who puts in the highest number of hours for the lowest pay. Try to have your personal financial house in order prior to launching your business.

Hold off on opening a brick and mortar location unless and until you absolutely have to. It’s not just the rent, but also utilities, insurance, etc.

When given the opportunity to buy new, don’t! Almost anything you need, from office furniture to manufacturing equipment, can be purchased used or even leased.

Learn how to track your income and expenses and be able to determine which activities are profitable and which aren’t.

Outsource as many of your business needs that you are able to until you are at the point where you need to hire employees.

Be prepared to dedicate everything you have into making the business a success. But remember that the habits you learn growing a lean business will serve you well in the future.

Establishing Business Credit for the First Time

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By Debbie Gregory.

Establishing business credit is an important step for any new business. Business credit allows a company to borrow money that can be used to purchase products or services.

Having a business credit history separate from a personal one minimizes the effect negative events on one might have on the other. For example, financial missteps that impact personal credit history and score wouldn’t impact the business credit if there is a clear separation, and vice versa. Setting up a separate legal entity, such as a limited liability company or corporation also provides protection of personal assets.

The first step is to structure your business as a separate legal entity.

Next, obtain a federal tax identification number (EIN). The EIN is basically a social security number for a business.

Open a business checking account in the legal business name. Once open, be sure to pay the financial transactions of the business from that account. Apply for and use a business credit card, and be sure to pay the credit card bill from your business checking account.

Open a business credit file with all three business reporting agencies: Experian, Equifax and TransUnion. It’s important to closely monitor your business credit reports and scores on a regular basis to ensure the information reporting is accurate and up to date.

Establish a line of credit with vendors or suppliers. Work with at least five vendors and/or suppliers to create credit for your company to use when purchasing with them. Ask them to report your payment history to the credit reporting agencies.

Most importantly, be sure to pay your bills on time. Just like with your personal credit, late payments will negatively impact your business credit.

By establishing business credit; banks, lenders, suppliers, retailers, insurers and investors will now be able to better access the viability and creditworthiness of your business. Ultimately, your business credit report will impact the amount of credit, payment terms, interest rates and insurance premiums your business will pay.

Questions to Ask Yourself When Starting a Business

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By Debbie Gregory.

There are no limits on who can become a great entrepreneur. If you fancy yourself an entrepreneur, odds are you already have the drive, but, you might not know where to start. Launching a business takes planning, decision making, goal setting and action. So before you jump into self-employment, here are a few key questions to ask yourself.

What is my talent and who is my customer? Whether you are offering goods or services, make sure you are offering a solution people are looking for and are willing to pay for. Write up a business plan, which will serve as a roadmap to your success. Maintain your focus and don’t try to be all things to all customers. Your target market is the ideal client looking for what you have to offer.

Do I have the discipline it takes to make it as a business owner? Are you disciplined enough to report for duty, even on the days when the sun is shining and the temptation to play hooky is strong. Being your own boss often means working longer and harder than you would if you were an employee. Success in business requires passion, a lot of hard work, staying power and drive.

Can I assemble a team that will help drive my business success? You can’t go at it alone; a team will help you build and grow your business. Even if you plan to be a sole proprietor, you’ll probably need an outside support team to keep you focused and on track. These people may include a lawyer, accountant, sales rep, web developer, etc.

How will I finance the business? Your business plan should give you an idea of how much funding you will need to cover not only your startup costs but also ongoing expenses before you are generating a profit. Evaluate your options, including business credit cards, lines of credit, vendor credit, a business loan, or a combination of these sources.

VAMBOA: Ready to Start Your Own Business?

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business ownerBy Debbie Gregory.

Starting a business involves planning, making key financial decisions, and completing a series of legal activities. But for many Veterans, transitioning from service member to CEO may be a more natural path than they might have imagined.

Most experts agree that the two biggest components for Veterans preparing to start their own businesses are choosing the right kind of business for them, and securing capital. They also recommended that aspiring business owners take time to think about where their passion lies.

VetFran Manager George Eldridge encourages Veterans interested in business ownership to do their research and examine all possibilities.

“In the military you think, ‘I can’t fail,’ but sometimes you have to think about the risks you’re getting into and have a balanced expectation when getting into something like this,” he said.

Veterans who are considering franchise ownership may want to start by surfing VetFran’s website. With more than 100 different franchise industries to peruse, there is something for every interest. The most popular franchises are in the food industry, followed by hospitality, home-based businesses, child care and pet care.

Although VetFran does not offer funding, it connects Veterans with funding assistance by working closely with the SBA and lenders within its supplier group.

The SBA offers a checklist for Veterans interested in starting a business. It suggests starting with a business plan, which is like a roadmap to determine your starting point, where you are going, and how to arrive at success through proper planning, preparation and management. The checklist also covers things like licenses, tax ID numbers, taxes, finance, location, etc.

Financing opportunities are plentiful for Veterans. The SBA, through its 68 field offices around the U.S. and 1,000 resource partners, has Veterans Business Outreach Centers around the country offering information on how to gain access to capital.

For Veteran-specific programs, the SBA helps businesses obtain reduced loan fees for any loan under $350,000.

Leveraging Information and Networks to Access Capital (LINC) is an online tool that connects loan seekers and lenders. By answering just a few questions, applicants can reach out to lenders all over the country.

The Veteran and Military Business Owners Association (VAMBOA) is a non-profit business trade association that promotes and assists Veteran Business Owners, Service Disabled Veteran Owned Businesses (SDVOB) and Military Business Owners. Small businesses are the backbone of our economy and responsible for job generation. That is why VAMBOA provides its members with Business Coaching, Contracting Opportunities, a Blog that provides information, Networking contacts and other resources. Membership is FREE to Veterans. Join Now!

VAMBOA: Ready to Start Your Own Business?: By Debbie Gregory

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