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How to launch your business without a loan

How to launch your business without a loan

Getting started in business often means applying for finance, but it doesn’t have to.

There are ways to launch and grow a small business without taking on debt. Here’s how...

1. Do it on the side

This might sound like an impossible task if you’re already busy with a day job.

But if you start putting in a few hours a week and slowly start to grow your business then you’ll have the advantage of not being stressed over finances while you make the transition from employee to business owner.

Connie, a graphic designer from Nowra has done a full time job and run her own micro design business for four years.

“It’s been really hectic at times, most people don’t know how I do it, but I just couldn’t take the risk of launching a business without a guaranteed income.

Plus, I already had a business loan I was paying off for a previous failed enterprise.

Now I’m at a point where I can work part-time and pour more energy into my  business.

I really enjoy what I do so it doesn’t feel like extra work, and I don’t sit up at night worrying about cash flow.”

2. Run it on a shoestring

Keeping your overheads as low as possible means the need for less start up cash.

Running your business from home, setting up e-commerce (selling online) and doing as much as you can yourself will help you minimise costs and help you learn your business from the inside out.

Use low cost resources such as social media to promote what you do and network and find ways to share resources. You may be able to swap skills with other new business owners.

Rachel Bridge, author of How to Start a Business Without Any Money, recommends, "replacing fixed costs with variable ones by linking your costs to your sales".

"Hire meeting rooms by the hour, staff by the day and services as you need them. Platforms like peopleperhour make hiring freelancers easier than ever", she says.

3. Plough back the profits

Reinvesting money back into your business is important.

While it may be tempting to spend everything you make, reinvesting will help the business grow and ultimately make more money.

It can be worth getting advice about how much and where to invest any surplus cash in your business.

Some successful Aussie business owners give their tips on this issue in this Guardian article

Finally - remember that starting a business with little money is all about your mind-set. Don't wait to have the money you need. Get creative and find low cost work arounds. 

NRMA Insurance offers many different types of insurance for small business - find out more here.

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