By Alan Irazoqui.
Whenever something big is about to happen in our lives, we always need to find ways to prepare for it. A new house, a new baby, a new job, even a new relationship, requires that we take into account all the changes we need to make in order to make this new thing a thriving one; and starting a company is in no means any different. There is so much to do before your new business is live and running. Among the many aspects to take in consideration, there is a very big and important one, and that is: THE MONEY.
How much money do you need? Where are you going to get it from? Who is going to give it to you? Will you give them something back (like a % of the company, shares, or a seat in the Board) or will you pay them back the full amount? You’re probably starting to get a little overwhelmed, and it’s okay; we’ve all been there. To alleviate your worries, here are 5 ways that you can get financially ready to start your company:
1. Use your credit card.
One of the great things about credit cards is that you can buy stuff and not have to pay the whole amount at once. You will be making small payments through several installments. This method is great for buying electronic equipment like laptops, computers, tablets, etc.
Plus, you will be building up a nice credit history that will come in handy when you wish to ask for credit later on.
Platforms such as Kickstarter and Indiegogo are great ways to not only get funding but also gain exposure. People from all over the world are able to take a look at your project and decide to back it up or not; if they do, you are getting both an investor and a follower. If they like it enough, they will share it with other people and these people with others and so on and, bam!, you got yourself a legion of fans/potential clients in a month or less. Also, your project could become one of the Staff picks and be featured on some of the most relevant news outlets, which could catch some VC’s attention.
3. Raise money from your friends and family
In times of need, look for those who have always had your back. You need the support of those who love and accept your craziness; your personal team of cheerleaders…you know who they are. Tell them about your project, let them know that you are serious about this, show them your business plan so they know you are legit working on it. Take a cue from the Netflix show “Girlboss” when Sophia takes her dad out to dinner to ask him for money to grow her online business: she brought a book full of pie charts of her financial projections so he could see that she was serious. He ended up giving her the money.
An even better tip, though, would be to create an MVP (Minimum Viable Product) and show it to them when asking them for the money. This will make it harder for them to say no.
4. Keep your job.
If you already have a job that pays well, keep your project as a side hustle for a while. Do the right math to see how much money you would need and how much longer you would need to keep working at this job to get that money. Take night shifts or work overtime if you have to. When you come to the point that your side hustle has proven to be a feasible business, then it’s time to quit.
You’ve got people like Sergey Brin and Larry Page that were studying to get their PhD but decided to drop out only when they realized that Google was a legitimate business, which was 3 years after it was founded. Also, Barbara Corcoran decided to get another job when her own business was struggling to meet financial needs so she could bring bread to the table.
5. Secure 1 client.
Again, do your math and see how much your costs of operation are and find 1 or even 2 clients that can pay you the same amount so you can cover those expenses. Bonus points if you can get more clients, so you can get even more money to invest in your company. By this time, you should really have an MVP to secure these clients.