Go from working 9 to 5 jobs to being a boss. Turn your passion into profit: Get funding and followers to move your passionate idea from employee to Entrepreneur.
How to Set Up Your Business
One of the most steps in how to get funding is to set up your business correctly. You should consider the right business structure, such as a sole proprietorship or a limited liability company (LLC).
It helps to think about your personality and take a quiz on your entrepreneurial archetype. Maybe you want to leave all nine to five jobs to boss other people around in your business.
Knowing that can help you decide how to structure your business for success. If you don't set up your business well, you may struggle to get funding as a new entrepreneur.
You can leave your nine to five to be your own boss but be a good boss.
Six Things That Happen When You Have Funding Problems
Building a startup from funding sources can help you speed up your success and growth. You don't need a ton of money when starting a business, but you need some to keep yourself afloat.
As you grow, you'll need even more money because your expenses will increase. Fortunately, you can find the funds you need to jumpstart your online business.
Whether you decide to get funding from a bank, other lenders, or use your own savings, consider why it's essential. Then, you can avoid some of the pitfalls of a lack of business funding.
1. Inconsistent Cash Flow
One of the most significant problems that come with funding problems is inconsistent cash flow. You might get a lot of money in one month, so you think you can afford to spend that much all of the time.
However, you might not have as much cash come in the following month. If you got into the habit of overspending, you would find that you don't have as much money in the bank during slower seasons.
As a new entrepreneur, you need to learn how to navigate inconsistent income very quickly. Fortunately, getting funding early on can give you some cash flow to get your business going.
2. Paying Bills Late
Another funding-related issue is that you pay bills late. You might pay your bills late because of inconsistent cash flow or because you don't have any cash at all.
The more bills you don't pay on time, the more financial problems you can have later on. Your business has its own credit score, and not paying on time can affect that.
If you ever need to get a business loan in the future, you might struggle to find a lender who will approve you. Then, the cash flow problems will compound even more.
Of course, paying your bills late can often come with a late fee. You may need to pay a lot more over the year simply because you don't have money in the bank to pay your bills on time.
3. Increasing Debt
When starting a business, you may need to take on some debt. However, you don't want your debt to hold you back from building business credibility and keeping your business in good financial shape.
You may not have a lot of debt at first, so it could seem manageable. Remember that a lack of funding can lead you to pay bills late, and that includes your loan payments.
If you let loan payments add up, so will the interest. Over time, you may need to pay a lot more money than the amount you borrowed to fund your company.
Be sure to get ahold of your debt early on. That way, you can make the most of that type of funding without it ruining the future of your business.
4. Mixing Personal and Business Finances
An easy mistake to make as a new entrepreneur is to mix personal and business finances. This is particularly tempting if you have a sole proprietorship and so don't have any legal separation between yourself and your business.
However, mixing your money with that of your business can lead to problems. You may think you have to use your own savings to cover the finances of your business.
If that happens a lot, you may start to resent your new venture. When you want to turn passion to profit, you need to keep your business finances separate so that you can know if your business is profitable and not let it affect your individual costs.
5. No Money for Emergencies
Many individuals face financial problems without an emergency fund, and your business could face the same things. Without proper funding, it can be hard to account for emergency expenses.
Even if you have good funding, you should set plenty of money aside for a business emergency fund. That way, you'll have money whenever something in your office breaks or you need to resolve a dispute.
You don't need to save all of your profits for an emergency. However, you should set a percentage aside from each sale or round of funding so that your business can get by when money isn't coming in.
6. Tax Problems
Another massive problem you can experience without enough business funding will come at tax time. One of the big changes you experience when you go from nine to five jobs to the boss of yourself is saving for taxes.
In a traditional job, your employer sets aside your taxes for you. However, when you work for yourself, you get the entire amount of money from a client or a product sale.
It's up to you to save enough of each invoice or sale for your taxes. Be sure you talk to an accountant to learn how much you should save so that you won't have a massive tax bill at the end of the year.
How to Establish Your Online Presence
As you look at starting a company, you need to start an online presence. This is how potential clients and customers will get to know you, and it's how you can build trust before getting them to convert.
Be sure to consider your ideal customers and what platforms they use. If you want to target business owners, LinkedIn may be a good option, while TikTok is better for teens and young adults.
No matter which platforms you choose, you'll also need a website where you can list your products or services. You should also post consistently online to grow a loyal following that you can send to your website.
Challenges of Growing Your Online Presence
When you first start, growing an online presence can be difficult. No one knows you, so you'll have to get out there and find people to engage with and to get them to engage back.
Even as you grow, some platforms, such as Facebook, make growth impossible. You may need to invest money into social media and search engine ads, which requires plenty of funding.
Another challenge is that you may feel like you have to be on every platform. If you do that, you have to split your time between every social network you join, so it can take longer to build a good connection.
Importance of Business Credit
When you look at starting a startup from funding sources, you have a lot of options. You can take the simple route and use your current savings or job income to fund your business.
A lot of startups will look for investors who can put up a lot of money at first in exchange for equity. However, you may want to look into business credit to build your company.
You can take out a loan to start building your business's credit. Over time, you can take out more and more loans as long as you show that you pay the loans off.
That way, you can build your business without giving away ownership.
Maintain Your Business
Another essential part of starting a business is monetizing it without needing outside funding. If you start an online business, you can make money from it in different ways.
Consider selling services, products, and other digital offers to bring in revenue. To help maximize this, you should also know how to launch offers and promote them well.
You should also understand how to use social media to market your business and get more sales. Then, you can focus on maintaining and improving your current sales funnel to make even more money.
How Will You Get Funding?
Being able to get funding can make or break your startup early on. If you don't know where to start, you could end up with inconsistent cash and a lot of debt.
Fortunately, you can take steps now to avoid that fate. Then, you can launch and grow a successful business doing what you love, and you can leave your nine to five job.
Do you want to learn more about funding your new business? View our courses and enroll now.