How’s the research coming? Any product ideas yet? Have any questions regarding the last blog post? Send them my way via DM on instagram @pursefind, or comment below!
Today I’ll be discussing the question:
How do I even fund a whole business?
I was originally going to discuss how many products to start with as well, however, I didn’t anticipate the discussion on funding being so long...
Firstly, it’s important to note that the following advice are for those who want to start a small online business on the side that has the potential to be your only source of income in the future. If you’re currently on your way to opening up a brick and mortar store this blog has absolutely nothing to do with you.
This is for those currently working a 9 to 5, going to school, you know someone who might not actually have access to income to just go off and start a business...this is for those who are literally starting from zero.
Again, my advice comes from personal experience, whether you agree with it or not, that’s for you to decide.
So here we go!
How do I fund the damn thing?
My first piece of advice would be do not turn to credit cards and loans to fund a small e-commerce business.
Don’t do it.
You’d have to have a full proof plan or be 100% sure that your product WILL SELL IN NO TIME, and let’s be honest you can never be sure of that especially during a pandemic.
Using credit or loans to start up a small e-commerce basically means that business does not belong to you until you have paid off that debt.
You want to make sure that you start up your business with as little expense as possible.
Read that last sentence again...and maybe three more times.
Minimizing expenses is really important especially at the beginning of a business, because all the profits should go back to the business...not to that mani-pedi, sorry. Any business you open will not be profitable in terms of paying yourself until maybe a year later...(important note, at the beginning profit won’t necessarily be visible in your bank account, but should be visible in the growth of your inventory). This is why you shouldn’t start a business with credit or a loan, because now you have one more bill to pay!
So with that said, how do you fund it?
Some of you may be like me, risk takers 😜, where you’ll use your tuition savings to start up your business, and honestly, that is okay, as long as you’re okay with it. To make decisions like this you really have to think about whether or not using your savings has the potential to set you back, or whether it’s a risk worth taking...after all...isn’t entrepreneurship just a big word for “humans who make calculated risks?”...
If risking it really isn’t your thing then maybe saving up, or budgeting for it is. Take a look at the money that comes to you every month, how much of it goes into actual needs, and how much of it goes into one too many lattes? One way to fund is by placing money aside month by month that normally you’d spend elsewhere...think of an amount you want to save up and how long it’ll take to reach that goal...you actually don’t need a LOT of money, you can really start with aiming for a goal of maybe $150 to $200 and I’ll discuss this on the next blog.
Or...if you have the time and ability to do so, basically get to work! If you have a car accessible to you, download that Uber driver app and start delivering! I did that for a while as well, no lie, you can make about $30-$40 a day by just working 2 hours a day...about $100-150 if you’re able to work 7 hours a day (say like weekends). Or find a little side job, where all funds will go towards your e-commerce fund.
Lastly, if there is a person out there who loves you and believes in your idea (and also has a couple bucks to lend) ask for a loan. This should be your last resort though, especially if you can’t promise you’ll be able to pay it back. You don’t want to ruin a relationship due to a loan. This is different than using credit or a bank loan because it wont directly affect your credit score...you also want to be clear with this person and give them an expected timeframe as to when you’ll pay them back...and keep your word. Borrowing from someone could be easier because you’re able to keep in touch and hopefully they’ll be flexible with you when it comes to repayment, unlike banks....again last resort though.
What you should have realized by now is that starting a small e-commerce on your own without “investors” means you will have to work a little harder, possibly sleep a little less, or come home a little later...that really is what it takes. There is no magical way to fund a business without putting in work or taking some risk. I will say that if done right, it is well worth it!
Y QUE NO TE DE VERGUENZA NADA.
GIRL WORK HARD GET THAT MONEY AND FUND YOUR BUSINESS.
Let me know what you’ll be doing to fund your online business!!
Next blog: How many items to start with?
Some stuff to look at:
Check out this great video that talks about Vine & Branch CO’s journey on her e-commerce business (click here)
Lastly start thinking about a business plan, check out the link below from sba.gov which describes two different types of business plans with examples! I’ll be discussing business plans soon.
Link: SBA Business Plans