Want to start a business? Start saving your money.

Posted by Maneesh Sethi :: November 2, 2007 @ 10:53 am

Have you ever dreamed of starting your own business and being your own boss with your own hours? It may seem like a dream, but it’s not impossible to attain---a majority of first-generation millionaires got there just by starting their own businesses. These aren’t just tech businesses though—these are electricians, plumbers, and other local small businesses. These are companies that anyone can start—even you.

To do so, however, you need to have some startup capital. For some companies, venture funding is the way to go, but for most, self-funding is essential. This means that you will need to have money saved up to start your company. If you are serious about wanting to start your own business, you will need to begin budgeting for it.

If you want to save money to start your own business, you have two options:

#1 - You can try to work on the new venture while you are still at your current job. Depending on your situation, this might be a better option than the second one.

#2 - Save enough money so that you can quit your job and focus on your new company full time.

Both options have their pros and cons, but it might be a good idea to follow #1. Many companies fail, and the first option is a good way to hedge your bets in case your company doesn’t do as well as you hope.

If you don’t have a budget, it’s pretty important that you create one, especially if you are planning to quit your current job. In a previous post, I provided links to some good resources and articles on such topics as calculating start-up costs. You should try to do the math to see how much you need to save. In a future article, I’ll try to explain how to figure out exactly how much you need to start your business.

Beyond saving for a new business, there are other options, such as borrowing. A survey of P2P loans on Lending Club shows that a growing number of business owners are turning to Lending Club to raise funds for creating and expanding their businesses.

Regardless of how you raise your funds, budgeting is still important. By budgeting and planning for your business, no matter what it is, you will improve your chances of it being a success. If it does well, you will be comfortably rich.

Good luck! ☺