So you’ve decided to start a new business but don’t know where to get the finance for the start up for. As you know, there are several different methods that you can use, such as bank loans, angel investors, borrowing from friends and family, etc. However, all these methods have a downside as well. In certain cases, you will also need to give the people you borrowed money from a part of your business, and do you really want to do that? The only option that leaves is self-financing, which, although difficult, is the safest way, as you yourself will be entirely liable for the business and you won’t need to hand over a part of your business to someone else.
Why you should rely on self-financing
Most business startups use self-financing. There are various reasons for that aside from the ones we mentioned above. Think about it, when you do approach other money lending institutions, such as banks, the government, or venture capitalists, the first thing they would want to know is how much cash you can supply to the business. That is because, if you don’t have faith in the business that you’re starting, why should anyone else?
That is why it is crucial for you to finance your business on your own, even when you’re taking help from other institutions. You can start off by taking an inventory of your assets. You’ll be surprised at how much you didn’t know you had. Assets include your retirement accounts, vehicles, collections, recreational equipment, and savings account. Yes, that means that if you have valuables that you’re not making use of, you can use them, instead, to fund your business. If you have a Rolex watch lying around, for instance, or one that has been passed onto you by your father and one that you haven’t ever used or have any intention of using, now is your chance of putting that to use.
That does not mean that you have to invest the entire value of the Rolex in your business, you can simply sell it and only use half of it if you like, the decision is up to you. If you’re not sure how much your Rolex is worth, you can simply search up which Rolex to buy and find your model of the watch in the list. That will at least tell you what the original value of your watch was, giving you an idea of how much you should sell it for, or, if you decide to invest the whole value into the business, you will be able to get an idea of how much more cash you will require.
It is advisable to invest as much of your own money into your business as possible, because even if you do borrow money from other institutions later on, this will then just work in your favor, as you need to show that you have faith in your business for other people to trust you. If you want to know more about self-financing, click http://www.entrepreneur.com/article/217376