Tag Archives: money

How to Build a Business Without Going into Debt

One of the greatest hurdles in building a business is capital, or lack thereof. A lack of capital and financial resources subsequently prompts aspiring entrepreneurs to believe that borrowing money is their only option. Of course, this belief is inaccurate. The pitfalls of going into debt are well-documented, but thankfully other alternatives do exist.

Build Gradually

Many ambitious and aspiring entrepreneurs aim to open their businesses as soon as possible. There is a certain excitement which often comes along with building a brand and starting a company. However, gradually building a business is one of the best ways to avoid going into debt. In many cases, this may require not giving up one’s day job until the business venture yields profit.

The process of building a business while still maintaining a day job may be initially frustrating and time-consuming. However, with patience, dedication, and consistency, the business will eventually become profitable. Following the generation of profit, the entrepreneur can then quit his or her day job. Gradually building a business is vastly more effective and beneficial than taking out loans and attempting to do everything at one time. Rome was not built in a day.

Know the Ins and Outs

Believe it or not, there are many aspiring entrepreneurs who want to go into business for themselves, yet lack critical knowledge. There are so many factors involved in starting a business; a business plan, budget, legal paperwork, website, proper management of funds, and sales tests are only the tip of the iceberg. Knowing the ins and outs means having a solid plan and being fully informed. So many people who want to go into business for themselves believe that simply borrowing money and spending during times of apparent necessity will help them. This is a common error which often engenders the downfall of businesses.

Hopeful entrepreneurs need to have their budgets in place and know exactly how much financial capital is needed to start their business.

Fund Your Own Business

At the end of the day, those who wish to go into business for themselves without also going into debt will have to fund their own enterprises. Thankfully, there are a variety of ways in which aspiring entrepreneurs can go about self-funding. Simply saving money is an option, although it can be time-consuming depending on the individual’s income and the costs of starting their business. In some cases, funding an enterprise purely through one’s own funds can take months, if not years, although it can still be done. Each hopeful business owner will have to decide whether or not this particular avenue is right for them.

However, saving money to fund one’s business is not the only option. Hopeful entrepreneurs can also consider pitching to an angel investor. Angel investors can be incredible assets for aspiring business owners, however, there are certain stipulations. True passion for the business, a solid execution plan, and awareness of the market are things which angels will look for before investing their money into a business.

A Final Word

Starting a successful enterprise is a tough venture. Starting a successful enterprise without going into any debt is even more challenging. However, with the proper preparation, knowledge, and expertise, it can be done.

 

Authored by Gabrielle Renee Seunagal

How to Repay Debt

In the best of worlds, nobody would incur any debts. Unfortunately, there are countless people who are up to their eyeballs in debt. Ideally, incurred debt is something which should be paid off as quickly as possible; yet, many individuals find themselves struggling to pay back the money they owe. The subsequent interest which often accompanies unpaid debt doesn’t make matters any less complicated. Thankfully, there are a variety of strategies which can be employed in order to effectively pay off debt.

Make Ongoing Payments

Indebted individuals have a tendency to avoid their debt. The avoidance is often motivated by dread and reluctance to face the large sums of owed money. However, avoiding the debt will never erase its existence. The only way to free oneself of debt is to make ongoing payments.

In this day and age, merely paying the minimum balance is not going to cut it. Payments should be made as frequently as possible. Each time an indebted individual receives a check, he or she should be putting aside a percentage of funds (or a specific dollar amount) to pay off what they owe. Initially, this can be uncomfortable and may even require some budget modifications. However, repaying debt in a timely manner is always wiser than idly wasting time and allowing interest to accumulate.

Increase Income and Profit

Despite the massive pitfalls of failing to repay debt, a lack of funds is a problem which many people struggle with. Therefore, individuals who literally cannot afford to pay down their debt should strive to increase their income. This can be done via asking for a raise, advancing one’s career, or even starting work in the gig economy or freelance market to create an additional stream of revenue.

Live Within Your Means

Countless people incur debt in their attempts to live above and beyond their means. While this type of money management is irresponsible and reckless, it’s particularly dangerous for individuals who have yet to repay owed funds. Anyone who is struggling with debt should proactively work to lower their expenses; this can almost always be done. Cutting back on unnecessary purchases, eating at home, and limiting entertainment fees are some prime examples of ways to reduce costs. Some people spend their entire lives in debt all because of poor money habits.

Avoiding Debt

Having to repay debt is no fun whatsoever. Debt holds people back from financial success, home ownership, the ability to live independently, and many other opportunities which life has to offer. Those who are able to take advantage of certain opportunities, even in spite of their debt, will not have the same quality of experience as their debt-free counterparts.

To make a long story short, debt should always be avoided. In the event that avoidance is not feasible, repayment should occur as quickly as possible.

 

Authored by Gabrielle Renee Seunagal

Knowing Whether or Not to Loan Money to Someone

At one point or another, most people will find themselves in situations where they asked for a loan. The person making this request may be a relative, close friend, or even a co-worker. Loaning money comes with its own risks and stigmas; what if the borrower takes too long to return the money? What if they can’t afford to pay back the loan? Worst of all, what if they simply choose not to?

Most people feel inclined to provide aid to those who are closest to them. However, there are still certain factors which should be taken into account prior to handing out monetary loans. Keep reading if you’re interested in learning more.

Consider the Qualities of the Person

Not every person who asks for a loan should be told yes. Hence why the qualities and characteristics of the prospective borrower should be taken into account before any funds are exchanged. Integrity, personal responsibility, and even current financial standing each play a role in how likely the individual is to, not only, return the borrowed funds, but also do so in a decent amount of time.

Another point to take into account is whether or not the asker has previously borrowed money from other people. If so, has he or she paid it back in a timely manner? Believe it or not, borrowing history tends to be quite indicative of an individual’s forthcoming habits, as they pertain to money.

Look into Creating a Legal Contract

While amounts of borrowed funds can vary, WikiHow advises lenders to draw up legally binding contracts; this especially comes in handy when hefty sums of money are being loaned. This can be done by having the borrower sign the contract and also ensuring that the document is enforceable via the Uniform Commercial Code (UCC).

Instituting a clear payment plan and eventually getting the contract notarized are also critical steps towards legalizing the form. Although going through the process of creating a legal contract may seem like a bit much to some individuals, it can truly come in handy later on down the line. Moreover, if a prospective borrower is unwilling to sign a legally binding contract, they may not be the best person to loan money to.

Trust Your Instincts

At the end of the day, each person is tasked with the decision of whether or not they want to loan money to a friend or relative who asks. Considering their qualities and characters can be incredibly beneficial, as can creating a legal contract; however, at the end of the day, your instincts should always be the determining factor.

No matter how good or trustworthy someone appears to be on paper, if your gut tells you to turn down their request to borrow money, do so. You are under no obligation to hand out loans; furthermore, you must first help yourself before you can truly help others.

A Final Word

Hopefully, the preceding advice will prove helpful to anyone who is undecided about whether or not they should loan money to someone they know.

 

Authored by Gabrielle Seunagal

How to Take Out a Loan

There are many people who will take out loans in their lifetime. There are many banks, online lenders, and additional financial institutions which have no problem issuing these loans. However, the reality which most individuals fail to understand is that loans almost always come with interest rates.

In other words, not only will people have to pay back the loans, but they will also pay for having to borrow money in the first place. For this reason, it is highly critical for individuals to tread carefully in regards to taking out loans. Thankfully, the following advice will certainly provide some much-needed insight.

Be Sure that It’s What You Truly Need

Virtually everyone stumbles upon a time or situation where they need to have money. However, being in need of funds does not necessarily mean that you should run to your nearest financial institution and seek out a loan. Sometimes, there are other available alternatives, such as dipping into savings or even asking a friend or relative if you can borrow money. However, not everyone has the aforementioned alternative; there are some cases where a loan from a financial institution is the most feasible solution for financial issues. Nevertheless, exhausting all options prior to taking out a loan is always best.

Come with the Necessary Materials

Individuals who require loans from financial institutions will have to complete an application and present official identification, as stated by Pocket Sense. After doing so, the hopeful borrower will also be mandated to show proof of their income. Of course, proof of income is required for the sake of the financial institution; before lenders loan money, they almost always ensure that borrowers have the financial means to pay the loan back, preferably within an allotted amount of time.

People who take out loans should also have a plan for payment. Proof of income is great, but on a practical level, this is not enough. Borrowers should map out exactly how much money they will put towards paying off the loan each week/month. This plan should also fit in with their budget, thus allowing the borrowing to cover their living expenses, put funds into savings, etc. If putting together a clear-cut payment plan is not possible, rethinking the prospect of taking out a loan may be a good idea. After all, fees and interest rates don’t care about personal circumstances or financial hardships.

A Final Word

Taking out loans comes with its own risks and setbacks. There are often many stipulations and strings attached which borrowers fail to realize until after the fact. For these reasons, taking out loans should always be done with extreme caution. Being truly sure that it’s necessary and having a very well thought out payment plan will make a considerable difference.

 

Authored by Gabrielle Renee Seunagal

How to Become a Venture Capitalist

When the average individual hears the words “venture capitalist,” they usually imagine a wealthy person who rakes in millions of dollars from lucrative investments. While the attainment of wealth is certainly an aspect of a venture capitalist’s achievements, there are many other factors involved in the process.

Many people who aspire to become venture capitalists do so with the intention of garnering high funds in a relatively short time period. However, this is not how the game is played. Venture capitalism is, by no means, a get-rich-quick scheme. Like any other financial endeavor, this occupation requires time, skill, knowledge, and sound judgment.

Hence, those who are still interested in becoming venture capitalists will surely benefit from following the forthcoming steps.

Sharpen Your Business Skills

Many people are under the illusion that the sole job of venture capitalists is making wise and lucrative investments. However, Sales Force explains that requirements for successful venture capitalists extend way beyond making investments and letting the funds roll in.

Any individual who is serious about this line of work must also be proficient in areas such as networking, investigating, analyzing business markets, and working with entrepreneurs. In this business, having the right contacts and professional skills makes all the difference in the world.

Gain Professional Experience

The majority of prosperous venture capitalists usually work their way up to this profession. Thankfully, there are a variety of career paths and occupations which aspiring venture capitalists can partake in. Starting a (small) business, working as an assistant/banker, or even becoming an angel investor (assuming that the necessary funds are available), etc can be especially beneficial career paths for people who are serious about becoming venture capitalists.

However, acquiring the knowledge and skill sets for this line of work does not occur overnight; as a matter of fact, years, or even decades, could pass before an individual is truly ready to enter the world of venture capitalism. There is nothing wrong with this, seeing as each person is on their own unique journey.

Finally, all venture capitalists should maintain upstanding reputations, real-life experience, and passion for the products which they choose to invest in.

Seek Mentors

While business skills and professional experience are formidable assets in the world of venture capitalism, the opportunity to connect with a mentor in this particular line of work is unbeatable, as stated by Chron. Not only have mentors been where aspiring venture capitalists are going, but they also have savvy investing skills and information which will prove to be invaluable.

 

Authored by Gabrielle Renee Seunagal