Five ways start up and small businesses can make ends meet

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Date: 11 May 2022

A happy women running her start up business

Starting a business is a dream come true for many entrepreneurs. But it's not all fun and games. There's a lot of hard work and sacrifices that come with being your own boss. Even if you have savings, they may not be enough to help you get through.

You need to make sure you have what it takes to survive and thrive in the early days of starting your own business. Here are five ways to prepare for the challenges of being a small business owner.

Build an emergency fund

One way to prepare your personal finances for the unpredictable finances as a start up is to build an emergency fund. Note that this is different from your savings account. Your emergency fund is specifically for unexpected expenses.

Common unexpected expenses for start up owners include:

  • medical bills
  • car repairs
  • home repairs
  • unexpected travel

Ideally, your emergency fund should be large enough to cover three to six months of living expenses. While this may seem like a lot, remember that your emergency fund is there to help you in case of an emergency, not to help you cover your day-to-day expenses.

So how can you do it? Here are a few tips:

  • Start small and build up gradually. Even if you can only put away £50 per month, that's a great start.
  • Save automatically. Set up a separate account that you don't touch, and have a certain amount automatically transferred from your main account to your savings account each month.
  • Be disciplined about your spending. If you tend to overspend, work on curbing that habit. One way to do this is to track your spending for a month to see what your money goes.

Take out a personal loan

Another way small business owners can make ends meet is to take out a personal loan. It can be a great way to get the cash you need without having to put your business at risk.

Online lenders like Creditninja.com typically offer low-interest rates and same-day funding, which can help when you're in a bind. Also, personal loans can be used for various purposes, so you can use the money however you see fit (except for business expenses - you'll want to get a business loan for that).

Find another source of income

Many people think that starting a new business is enough to guarantee success. But unfortunately, this isn’t always the case. According to a study by the Small Business Administration, only about half of the small businesses survive their first five years. So, what can you do to make sure your business is one of the successful ones?

Instead of relying solely on your start up, consider getting another source of income to help support it. This can be in the form of a part-time job, freelance work, or even selling products online. Doing this will help you cover your living expenses and give you extra money to invest in your business.

Find one flexible job to work around your business schedule that won't take away your time or energy.

Lean on your support network

Another way to secure your personal finances is to have a strong support network that you can rely on. This could be your partner, your parents, or your close friends. These people can help you stay on track with your finances and offer support when you need it. Having a solid support network can make a difference in managing your personal finances when starting a new business.

Sell unused personal items

If you have got personal items lying around that you no longer need and you're unsure what to do with them, why not try selling them online? It's a great way to make extra cash, and it's also straightforward to do. Here are a few tips on how to get started:

  • First of all, look at the items you want to sell. Decide whether they are in good enough condition to sell and whether you think they are worth selling. It's also a good idea to do some research online to see what similar items are selling for.
  • Once you've decided which items you want to sell, the next step is to take some good-quality photos of them. Ensure that the photos are well-lit and show the items from all angles.
  • The next thing to do is create a listing for each item on a selling platform like eBay or Amazon. When writing the listing, include all vital information about the item, and don't forget to set a realistic price.
  • Once your listings are live, you need to wait for someone to buy your items. Once you've sold an item, package it up carefully and post it off to the buyer.

Selling unused or well looked after items is a great source of money when you need it most, and it doesn't take much effort to get started. 

Final thoughts

For new business owners, it's easy to let their personal finances take a backseat to the stressors of starting a business. Thankfully, there are ways to ensure your personal finances don't suffer while you're busy building your dream.

Copyright 2022. Article made possible by site supporter Tiffany Wagner.

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