Young couple happy customers choosing refrigerators in equipment store.
If you’re starting a business or just want to get on with your life, here’s some advice for you: “Don’t wait to turn your business idea into a reality.”
That advice comes from Pete Ord, founder of the customer onboarding software company InstructionsCX. His most recent article in the Daily Herald, How Bootstrapping Can Help Get Your Business Idea Off the Ground, explains how to basically start a business from scratch. As I read it, I realized that his advice could apply to anyone!
So, if you have large expenses – like a vacation, a down payment on a car, or even a new device – read on for some gold standard advice on how to raise money as an entrepreneur of your own life. If you start early, do your research and prioritize, find out how much you can afford and do what you can with what you have, you are well on your way to making that big purchase with confidence.
For startups, “it takes a lot longer to secure funding than you think,” says Jamie Johnson at http://uschamber.com. “On average, 14 to 19 months can elapse between funding rounds. Because of this, you need to network with investors and look for funding before you feel ready. “
Suppose you are the parent of a young family of five with a four-month-old who is about to start eating solid foods. Your little fridge is slowly getting overfilled, but for the moment it is fine. If you look ahead, you will find that jars of baby food will definitely clutter your shelves, so you will need a bigger refrigerator in a few months.
Before making purchases (like a larger refrigerator) that are outside of your regular monthly budget, you should wait at least three months, recommends family finance guru Jordan Page at http://funcheaporfree.com. This gives you time to put money aside, allows you to take advantage of holiday sales, avoids impulse buying, and gives you time to research. If you only wait three months, you will have the best refrigerator at the best price as soon as the little one comes to you at the dining table!
Research and prioritize
To prepare to receive corporate finance, entrepreneurs need to “research” [their] Define industry, competitors and market [their] Products, make financial projections and determine how much money to raise, and decide whether to raise debt or equity, ”said Thomas Smale, small business finance expert at http://entreprenur.com.
As an individual who makes a big purchase, it is important that you do your research as well. Research the refrigerators on the market, determine how much money you will need for the type of refrigerator you want, and decide whether you can pay for it in cash or if you need help such as:
Also, determine where this purchase is on your priority list. Here is a recommended order of priority for spending and saving Bank of America:
- Emergency fund
- High Yield Debt
- Short term goals
Find out how much you need and how much you can afford
Entrepreneurs figuring out how much money they need should answer these three questions like this http://capitalism.com:
- In which phase is your company now: startup or growth?
- What is the required funding for?
- How much equity do you already have?
Even in our scenario with the refrigerator, these questions can help you find out how much you need and can afford. You are in the “growing phase” with higher incomes than when you last bought a refrigerator, and you need a refrigerator that will last a few years as your young children grow up. You saved enough money to pay for about half the average large refrigerator on the market. So you know how much to save to buy a more expensive or cheaper brand.
Do what you can with what you have
In the world of entrepreneurship, bootstrapping is the term used to describe starting a business with only the money you already have – no outside financing. It may sound impossible to get a business up and running this way, but in some cases it can actually be more effective.
Ord, the founder of InstructionsCXHe gave a vivid example in his article on bootstrapping: “I was once at a networking event for startups: instead of supporting me, some people started to write me off for bootstrapping. But when I asked how many customers they had, the answer was often ‘none’. Some people there had raised up to $ 6 million but still had upfront income. “
Ord, on the other hand, was quick to attract clients, and soon he was generating income and raising money from venture capitalists.
As you look back on your new refrigerator, it’s important to apply the principles of financial prudence. Your food doesn’t have to chill in the fanciest refrigerator money can buy – any refrigerator big enough will likely do it. That doesn’t mean you have to go cheap. It just means that once you have saved enough money on the refrigerator that you need and want, you will be able to buy it!
Whether you’re saving for a double oven, orthodontic treatment, or a trip to Australia, corporate finance principles are great tools to add to your tool belt. If you start doing research early, find out how much you can afford, and do what you can with what you have, you will be ready to make that big buy in no time!
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