How Much Money Will You Need To Start A Business?
How Much Money Will You Need To Start Your First Side Hustle
When I started my first business, I didn’t have a clue what I was doing. I kept investing money without really seeing a return until I finally looked up and realized I had invested $55,000 into a junk company that was never going to make me money. It was a hard lesson to learn, and hopefully a lesson you’ll never learn.
Knowing how much it is going to cost you to start a business is critical to your future success. This is an area that can make or break your business dreams.
To help you avoid making the same mistakes I’ve made, I put together this guide to help you get started. The guide focuses on small side businesses that in theory are inexpensive to start. I’m referring specifically to side hustles that you can quickly and easily start.
Being able to start a business without spending a ton of money or going into debt is a great way to get ahead financially. I’m all about finding ways to make a little bit of extra money while building up a business that will help me in the future.
It is really hard to start a successful business until you have some general questions answered. The most important question you need to be asking is what type of business am I going to be starting? I typically see three major types of businesses.
1. Large Personal Costs — Extra training or education is required to start this side-hustle 2. Medium Capital Costs — Small Side-Hustle that requires equipment and medium expenses
3. Small Capital Costs — Side-Hustle with little to no startup costs
The cheapest option is the 3rd one, but depending on your skills or goals, you may want to make the choice to invest additional money or time into your new business. Let’s take a look at each of the three areas and go over the positives and negatives of each type of company.
Large Personal Costs — Extra training or education is required to start this type of business
Large capital costs can occur in two ways. The capital costs can either be associated with actually starting the business or with the extra training or education you need to start a new business. Either route is fine as long as you know what you are getting yourself into.
Since we are referring specifically to small businesses and side hustles, I’m going to focus on the personal cost of getting extra training or education.
When you are getting ready to start a side hustle it is tempting to think that all you need to make extra money is to get another degree. Although this can be true, sometimes the cost of the degree can easily outway the expected return.
For example, an excellent occupation for mothers who want to be able to do a side business from their home is a hairdresser. Many of my friends have been very successful with this business model.
However, you must first consider that schooling is expensive and time-consuming.
DO YOUR RESEARCH!
- How much will your schooling cost?
- How many schools offer this type of certification?
- What are the pros and cons of the schools?
- Can you do your schooling without going into debt?
- How much will you be able to earn afterward?
- Does the Return on Investment (ROI) justify the cost?
- Can you find a job in your chosen field?
- Do you have the time to go back to school?
- Research salary through Glassdoor or other online resources.
- Speak with employees who have gotten jobs in your field.
- If possible, speak with graduates of the program you are interested in.
- Talk to potential employers
- What schools do they recommend?
- How frequently do they hire recent graduates?
- What type of employee skills do they need?
Doing your research will help you avoid getting lured into expensive useless certification programs.
The more research you do before spending money on schooling the more opportunities you will have in your chosen business.
Many people return to school for a degree without counting the cost versus the income.
The type of degree you are seeking can have a huge impact on your long-term financial future. However, ultimately you are what determines your success.
Don’t go into debt to get a certification or a degree unless you know for sure you’ll be in a better financial situation.
Medium Capital Costs — Small Side Hustle | Equipment Purchase and Medium Expenses
Any side hustle requiring equipment or supplies will take a bit more work to start.
These type of side hustles can be expensive to start if you aren’t careful and very cost conscious.
Two of the best examples of medium cost side hustles are photography and internet-based service businesses.
Let’s look at starting a photography business as an example. The people I talked with have the talent and passion for photography, but believe having expensive equipment is the only way to get started.
The first thing they want to do is spend $5,000 to buy their dream camera.
Being a photographer myself, I spend $2,000–3,000 on camera equipment every 3–4 years. I know how much of an impact a nice camera can make on your end product.
While having elite equipment helps, the ability of the photographer also contributes to the quality of the photos.
For instance, my brother is using my 8–10-year-old Nikon D90, but consistently takes better pictures than I do with my newer more expensive camera.
We can be in the same place shooting the same thing and he’ll get better pictures. It is so frustrating!
Why? Because he is a better technical photographer than I am.
My brother understands that he is capable of building a quality portfolio without the elite equipment he currently can’t afford. By diligently working with the equipment he has, he landed a photography job in Kauai without overspending to get his business started.
Without having to spend his own money, my brother was able to use the top equipment for his job. Because of his apparent skills, the company landed him the extra gear he needed.
Check out his Instagram feed (@matt_esplin) for some really amazing shots.
Sometimes you have to think outside of the box and “hustle” your way into a dream situation.
Before purchasing expensive equipment, consider the benefit of hard work and dedication. Often to start out you can use less expensive equipment and still excel in your business.
Most side hustles can start with basic equipment even in technology-based business. As your success grows you can upgrade your equipment to increase your quality and output.
A lot of things can be done very cheaply if you are willing to put in the time and effort to make them successful.
Set a specific budget and be determined to stay within your budget.
Look for ways to keep costs down. If you are willing to spend the extra time on research, trade skills with others or watch for good deals, saving money is simple.
Small Capital Costs — Small Side Hustle | Little to No Start Up Cost
In my opinion, the ideal situation is to find a side hustle requiring little to no startup costs. This should be your goal!
There is nothing better than making money without spending a lot of money.
Some of the best inexpensive side-hustles to start are in the service industry: teaching, house cleaning, dog walking, babysitting, and other personal services.
Service-based side-hustles are typically easy to start, inexpensive to manage and profitable to run.
Using service based side hustles to meet immediate financial goals is a great way for you to quickly ramp up your idea to begin earning money immediately.
I’ve got a huge list of side hustles most of which require very little upfront costs. If you are trying to find some inexpensive businesses to start by taking a look at this post. 48+ Side Jobs Anyone Can Do to Earn Extra Money.
You can start a small business without spending lots of money
I firmly believe that you can start a small business without going into debt to get started. Yes, it will take a lot of work and planning, but it really is possible as long as you start the right business.
Before you start your business take a deep dive into your plans and make sure that your future goals are realistic and ones that you can accomplish without going overboard. When you set realistic growth goals and are willing to take the time to do your research and find inexpensive ways of starting and growing your company the sky is the limit.
Now really is the best time to get started and begin building your small business.
I’d love to hear your business ideas and hopefully give you a bit of direction. Also if you need help getting started check out my ebook — How To Start Your First Side Hustle. It has tons of information on how to get started with your first business and will really help you find a business that will work for you.
Originally published at dailysuccessfulliving.com on November 28, 2018.