Starting a business always takes money. Whether you want to open a small store or you want to run a company, you need money for investment. Most of you have a dream of running a business, but a few of you successfully carry out their plans. Having enough cash to start a business is rarely a situation that happens. Further, it takes time to have sufficient funds to start a business and most of you do not have patience.
If you are serious about your business dream, you should immediately start saving money. Remember that you will need money for operating expenses, rent, payroll, and the like. You should also have at least six-month worth of living cost as your business will not start generating profits at once. Here is how you should put aside money to start a business.
Prioritise debt repayment
You cannot start setting aside money unless you pay off all your debts. Overdue debts add up the cost, sucking a large chunk of money that leaves you broke in the end. The due date may slip through the cracks if you have been juggling with multiple debts. Consolidate all loans. Since you will pay down one large debt in fixed installments, it will be easier to get rid of the debt.
You can also talk to your lender to put you on a different repayment plan if the current plan does not work for you. Of course, you may need to borrow money in case of unexpected expenditure. Various loan offers such as unsecured personal loans, quick loans and same day loans are out there that can fund your small needs. Make sure that you take out a loan in Ireland during an emergency only. Funding impulsive buys can take a toll on your financial condition.
You often have a lot of excuses to have failed to save money, but automation can prevent you from being off the track. It is a good way to start saving. Link a savings account with your regular account and set a minimum limit for funds transfer. Try to have a savings account that does not let you withdraw funds, as a result, your savings will quickly grow.
Create a realistic budget
While you need to set aside money for your business, you need to look over your spending. Budgeting helps you understand where your money is going and how much you are spending every month.
Make sure that you manage to meet all your regular expenses with money available after transferring money to your savings account. Make a list of expenses and slash your discretionary spending. Eating out, buying things you do not need, grabbing drinks at the weekends can set you back a lot of money.
Track your expenses
There is no use of budgeting if you do not track your expenses. Use a spreadsheet to record all your expenses. Track them weekly or bi-weekly to ensure that you are not spending more than the set limit.
Online apps can help you track your spending. You will get alert and notifications as your spending get closer to the set limit. In fact, such online apps can help you create a budget.
Build an emergency cushion
Having enough money to invest in your start-up is not a matter of time. It may take years depending on the type of business you want to start. It is no wonder that you get caught up with a financial emergency in between. How will you tackle it if you do not have emergency funds?
Remember that you cannot use funds you set aside to start your business to meet unexpected expenditure. Therefore, you should build an emergency cushion separately. You may prefer taking out a loan, but do not forget that it will cost you more than what you owe.
The final word
If you have a dream to start a business, you should immediately consider saving money. Prioritise your debt repayment, automate savings, create a realistic budget, track your expenses and build an emergency cushion. Start saving money as soon as you can. The sooner you start, the better it is.