Tweet

Creative Business Financing and The Jobs Are Free Myth

Guest post by: Joe Crawford

Article Overview: Many people never explore creative business financing because the don't consider starting a small business or a home based busniess as a viable option. In some ways the myth that jobs are free keep would be successful entrepreneurs from even entering the world of small business. Here are a few creative financing ideas derived from the costs of having a job.

Creative Business Financing and The Jobs Are Free Myth

I got off the phone with my accountantin norther Michigan about an hour ago and the topic of starting a business came up in an interesting and insightful way. Creative business funding was my take away from the conversation, more in perspective than substance really, I got a clear picture of the mindset of business funding shared by many top level professionals. My small business accountant, in answer to my comment, " I think everyone should own a business", shared with me some insight into why people don't start businesses and why it might be better that they don't.

People tend to look at starting a business as a risky proposition that requires them to shed their blanket of comfort found in their profession or job and one of contributing factors is funding the business start up. Instead of looking at financing a business with a large lum sum of cash, I would encourage you to look at itin terms of cash flow, just for a minute.

If you have a job or have had a job you have expenses, just like a business. In order to get your job or enter into your chosen profession you also invested start up capital via an education most likely. The challenge I'd present to you is to look at business funding and starting a business in the same way. Just for the sake of illustrating my point, lets say you spend around a $400 dollars a month on your job, the key word here being spend.

• Gas to drive to work $150 per month
• Lunch and non essential consumables $125 per month
• Professional apparel $25 per month
• Proffessional supplies $75 per month

This is a short list to make the point that your job has expenses which likely exceed $400 dollars per month by a long shot and we've established the fact that you did indeed put forth some funding for you job via education expenses. And in many instances this money is an expense entirely and gone from your finances for forever.Starting a busniess lets you convert much of the spending you do into investing. Most people don't think of the money their job cost them, they just do it because it is what is required to make it all work.

So what if you looked at business funding in the same way?

Starting a small home business in your spare time is an extremely affordable and effective way to launch a lucrative small business and doing it with the correct mindset is a great way to fund your business without ever getting a small business loan. One of the biggest mistakes first time entrepreneurs make, myself included, is to go out and borrow money in order to start a business. Most businesses, even the ones that require equipment, leases or property purchase, and materials can be started in way that relies on natural growth.

Funding a small business via natuaral growth and smart cash flow model is smart way to create free financing to grow your business and better yet it is a top way to reduce risk of loosing someone elses cash.

So how do you finance a small business start up without borrowing money?

The main source of revenue for most businesses is from sales of products or services in one form or another and this money comes from customers and clients, right? So what if you created a business model that attracted customers and clients in your unique business niche or industry who wanted to learn about the products and services your target industry offered, do you see an opportunity to create cash from this customer base? Offering information, consulting, or even instruction on using a product or service in your target industry is one way to create upfront cash for starting a more material offering in your business sector later and guess what, you already have a customer base when you start.

The old way of starting a business with a large chunk of upfront cash has it's ties in real estate and old marketing. A huge chunk of start up capital it ear marked for marketing right out of the gate and most of it goes to waste, or actually in to the gross revenue figure of where you made your media buy.

Just some things to think about when you stand looking at the mountainous obstacle that business financing represents to so many entrepreneurs who just want to see their idea in real life.

Related Articles
  7 Myths Of The Canada Government Small Business Loan – Mom Never Told You This!
  MYTHS ABOUT MARKETING TO OLDER PEOPLE
  How to Get Financing For Your New Small Business by Sharon Fullen
  The Truth about Allied Health Staffing Invoice Funding
  Equipment Financing Canada – One Big Mistake Not to Make
  7 Myths of Sales Success
  Is Financing Inventory and Financing Purchase Orders Actually Possible In Canada ? Yes You Can!
  The Top Ten Myths And Realities About Business Coaching According To Your Strategic Thinking Coach
  Guess Who’s financing inventory and using purchase order Finance ( P O finance) ? Only Your Competitors – that’s who !
  Lesson #4: Stay Ahead Of The Pack
  What’s Your ABL Finance IQ? Info On Canadian Financing By Asset Backed Lenders !
  Working Capital and Business Lending in Canada Without the Voodoo!
  The Genius At Work
  10 Greatest Pharmaceutical Sales Myths: Exposed
  How and Where to Get Loans to Build Your Real Estate Wealth by Tyler G. Hicks: Part I
  Five Worst Myths--and Best Truths--About Good Writers
  Busting Healthcare Staffing Factoring Myths
  Debunking Franchise Myths
  The Power of Creativity
  Finding Information on Small Business Loans

Article Tags: business financing, creative financing, creative funding, financing a start up, getting a business loan, small business funding



Related Forum Posts
Is The E-Myth The Ultimate Franchise Guide? - Ever since the E-Myth made its way through to becoming one of the most popular books for entrepreneurs, the number of small business owners who have come to me discussing franchising has exploded. Is the E-Myth the reason why so many companies are now looking at franchising their business model? Are there any other resources you can suggest for new franchise owners or people considering it as an option?
Happy Worker as of Dec 31 2007 - Here's mine... I'm now off to make an offering to the business planning gods for their help in getting to these goals & beyond. To the combined success of Prophets 2 Profits! ----------------------------------------- 1) Corporate a) Retail - Sales reps covering all major markets (1M or more) - Retail product launch plan - 1 more retail release (TBD) b) The Toy Agency - Systems for: o Creative process o Pricing o Manufacturing o Logistics - Marketing agency strategy in place - 1 new customer every 2nd month (5 new customers); 1 of which will be rev of >= 500K/year c) Business - Creative talent pool management strategy & process - Outsourced and/or weekly bookkeeping - Monthly budgeting & forecasting - Better banking organization (Line of Credit, CCs, automate billing for appropriate vendors) - Team total of 5 - Larger office d) Web site - Daily updates - Start of separation of Blog/TTA/Retail 2) Personal - Most weekends “off”! - Entirely separate personal finances; basic personal financing plan - Family….?
re: restaurant start-up - I'm not sure about government grants for restaurants, but my recommendation would be to approach a lender that offers loans under the Canadian Small Business Financing Loan program where the government will guarantee 85% of the loan. You can borrow up to $250,000 to finance equipment and renovations under this program. Restaurants are very risky business, however some of the Chartered Banks will look at restaurants if there is enough of an initial equity investment and you have a solid business plan (experienced management team, good concept and strategic location).
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
E-Myth? What's That? - I second FranchiseBrief... What's the E-Myth? I've never heard of it, although I feel stupid saying so. Any insight available?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Resolving A Conflict Between Two Sales Staffs

10 Steps to a Great Support Team

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.