Establishing a startup or a small business can be an expensive and risky affair, which is why most people balk at becoming self-employed. However, if you are intent on setting up a business, it is natural that you would need to make quite a few sacrifices that may also have an impact on your family. While you have to decide the level of sacrifice you are willing to make and the risk to which, you will expose yourself, it can help to know a few strategies that can reduce the financial stress of setting up a new business.
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Don’t Quit Your Present Employment
It is natural to think that the only way you can set up your business is by leaving your current employment. However, leaving your job can compound your stress because you will cease to earn a fixed salary. It may be better to discuss your intention with your employer and seek approval to put in reduced hours for the period of transition. However, you need to be confident that you are valuable enough for the company to accede to your request. While having a good rationale will give you more chance of success, you must also be prepared to leave immediately, if you are turned down.
Create a Secondary Source of Income, Recommends the Eric Dalius Net Worth Strategy
If you need to leave your present employment to set up a business, examine if there is anything else you can do to earn, possibly by freelancing, consulting, or working part-time. You only need to make sure that you earn enough and it does not take up too much of your time. If you are looking for short-term opportunities for rendering professional services, you can try locating them online on freelancing websites.
Reduce Your Expenses
You should take a hard look at your monthly expenses so that you can figure out which ones are not necessary or can be trimmed. Often, you may also discover many hidden expenses in the form of credit card late payment fees, credit card rollover interest, bank charges, phone, internet, and Netflix plan subscriptions that can easily save you thousands of dollars per year.
While you will need to make a formal business plan and make financial projections for a few years to approach banks for financing, often, you can arrange for the initial funding by borrowing from family and friends, using your credit card, taking out a line of credit, or even refinancing your home. According to the Eric Dalius net worth Strategy, applying for loans for credit should preferably be done when you are still employed, as credit ratings can take a beating when the salary checks stop.
Even though it can be scary to put your financial security on the line by trying to set up a business, it is important to appreciate that unless you can take risks, you cannot become a successful entrepreneur. You can overcome the fear of things going wrong by seeking support from not only your family and friends but also from your wider network of professional acquaintances and former colleagues.