One way of increasing your income is by starting a small side business apart from your regular job. So, how do you go about it? First you must have a good idea. The good idea must be realistic. Do not be driven to do something because someone else had done it successfully.
Do a business that you have a passion for and that even without the money, will give you personal satisfaction when things are running not very well like in many start ups.
You need an inner energy to help you drive the business when everything looks bleak – remember every cloud has a silver lining. But most of all after making the decision to start don’t depend on borrowed money. Save your start-up capital.
A side business is something you will keep on the side until it grows. At the beginning you will only just be able to dedicate some time away from your regular job so it is a bad idea to borrow capital because then you have the instability of worrying about repaying the loan, running the business and doing your job.
Besides, the lack of readily available funds in form of a loan forces you to concentrate on the basics, maximizing resources to save capital for when you really need it.
Your discipline is sharpened and you don’t waste resources on stuff that doesn’t translate to bottom line success. But sometimes, business owners need to borrow money to grow or start their businesses. Borrowing money should only be a last resort.
Besides, a side business should be at a certain level in your financial journey – you should have got rid of your debts, built up your emergency fund and started up your savings fund.
The start-up capital should be a savings goal just like saving for a house or car. Do not sink all you savings into a side business when you have a load of debt weighing you down.
By doing that you lose focus – debt, emergency fund, reducing expenses and investing in a side business at the same time. That is even worse if you are not good at multi-tasking.
Be frugal – don’t start spending on fancy business cards and flyers or fancy furniture and an office when you can have a home office. By limiting your initial expenses, you can depend on your own savings so that if, God forbid, the business goes bust you are not left with a host of debts to pay.
Borrow if and only if you have no other option. Borrow when the business is growing and your cash investment is limiting expansion prospects or is limiting the ability to maintain a good profitable business.