Business how to earn money from home without any investment how to make money from home part time real ways to make money from home for free
- There are many ways for small businesses to obtain financing.
- Investors and credit are a few of the many financing options available.
- Being responsible and knowing your numbers is the key to success.
What keeps business owners up at night? Ask your business owner friends and chances are at least one will tell you that making payroll is in the back of their mind on a regular basis. As companies grow, they often seek out financing to help bring stability to their balance sheets — and the right type of financing could mean the difference between certain doom and enduring success for your company.
But what is that magical form of financing? How much should you take on, when should you look for financing, and what obstacles might pop up?
Here’s some advice from four successful small business owners.
Business how to earn money from home without any investment how to make money from home part time real ways to make money from home for free 1. Weigh the costs and benefits of bringing on investors.
When business owners think about financing, they sometimes gravitate to bringing on investors. But successful companies recognize the weight of that decision.
Zach Hendrix determined that selling equity wasn’t right for his company, GreenPal, and he’s happy with his choice today. “We’re in the driver’s seat and are not held accountable to any other outside stakeholders.”
On the flip side, Theo Lee realized early on that his Korean food brand, KPOP Foods, would require significant up-front capital. He pitched prospective investors successfully.
“This really boils down to the type of business you’re running and whether you’re willing to give up control and ownership in the business,” he says.
If you do seek equity partners for your business, understand that finding the right fit will take time.
Hendrix likens the level of commitment you’ll face to a marriage.
And Lee agrees wholeheartedly. “Be sure that you’re comfortable with the investor,” he says. “Once you take the money, it’s very difficult to get rid of them.”
To keep partners happy, Lee recommends a high degree of transparency. At KPOP Foods, he sends his investors monthly updates that outline revenue, operations, product development, key initiatives, and major obstacles.
Business how to earn money from home without any investment how to make money from home part time real ways to make money from home for free 2. Make the most of the credit available to you.
One of the best financing tools may already be in your wallet. Using your business credit card for your business’ everyday needs can help you earn rewards that you can reinvest in your business. Seek out a card that offers unlimited rewards for the purchases you make. With no cap on cash-back earnings, you can funnel free money back to your business with every transaction.
You should also look for a card that offers key benefits, like a low annual fee, free cards for your employees, or automatic synching of transactions to accounting software.
But don’t let the lure of rewards or a low interest rate tempt you into unnecessary spending. Charlene Consolacion, cofounder of Biig, which makes lock boxes for cars, and Hendrix both emphasize the importance of staying on top of your debt. Hendrix used company profits to pay off his card’s balance quickly. And Consolacion ensured her payments were consistently on time. “If the banks see your ability to use the credit cards responsibly for quite some time, they will even offer you an increase in your lines of credit,” she adds.
Business how to earn money from home without any investment how to make money from home part time real ways to make money from home for free 3. Don’t get stuck thinking about financing just one way.
There are myriad modern financing options, and company owners advise exploring every option available to you.
“We do not want to depend on one resource,” Consolacion says, “so it’s very important to educate ourselves.”
Adam Mitchell, co-owner of We Buy Houses Fast in Dallas, adds that the type of financing you use may vary by the stage of your business or the reason you need cash. “We use traditional mortgages, hard-money loans, and owner financing to fund our real-estate deals,” he says, “and we use a credit card for materials that we try to pay off every month as well.”
Lee has explored a number of nontraditional financing options. “We’ve turned toward crowdfunding and Kickstarter, a convertible note from angel investors, equity crowdfunding through SeedInvest, and a SAFE [Simple Agreement for Future Equity] from a venture-capital fund.”
Business loans are also a favorite means of launching companies, growing them, and consolidating debt. Be sure to explore your options before selecting a lender and nailing down the terms of financing. Partner with your banker to understand the best loan amount, term, rate, and repayment schedule that fits your business’ needs. For example, an SBA loan may make more sense than a traditional business loan.
Business how to earn money from home without any investment how to make money from home part time real ways to make money from home for free 4. Make financial health a priority for your business.
“Above all else,” Hendrix says, “try to grow your business out of the profits that it generates.”
Mitchell agrees, recommending that business owners start small and build strategically.
“You invite risk to the table when you take on too much at once,” he says.
Take the time to sketch out the short- and long-term needs of your business.
“A lot of entrepreneurs aren’t crazy about building financial models or writing a business plan,” Lee says. “However, both of these exercises force you to think about how much money you need, where the money needs to go, and how the company’s revenue and cash flow will grow.”
And remember: Your business withers or thrives on money. So don’t be afraid to enlist a pro to support your company’s financial health.
“I think a lot of business owners either under- or overestimate how much they will need,” said David Osei, senior director for small business banking at Capital One. “Most small business owners did not start their companies to manage cash flow, so it’s important to have an open dialogue with your banker about where your company is going to determine what makes the most sense for your business.”
Ready to get a leg up on your company’s finances? Learn how Capital One® can help you manage your small business’ cash flow.
This post was created by Insider Studios with Capital One.