If you’re considering starting your own business, you’re far from alone. In the first quarter of 2021, partially spurred by employment upsets during the pandemic, Americans have filed around 1.36 million new business applications.
Of course, it’s one thing to have a great business idea, but it’s another to have the necessary funding to get your venture off the ground. Most new businesses struggle with cash flow in the early years, which can sometimes be the difference between a successful startup and one that closes its doors in just a few months.
But how much money do you need to start a business, and what should you do if you don’t have enough? Here’s what you should know as a solopreneur.
How Much Money Do You Need to Start a Business?
As you might expect, there’s no single average figure needed to start a business. Because small businesses vary so widely, it’s impossible to list a general amount that will work for solopreneurs across the board.
Companies that need to produce physical products and establish a brick-and-mortar store, for example, will need more money than an online company that sells services rather than goods. That said, many studies list average solopreneur startup costs between $10,000 and $30,000.
If you’re not sure how to determine the costs for your startup, check out the U.S. Small Business Administration’s startup costs calculator. By estimating your expenses and profits, you can work to understand how much you’ll need.
How to Start a Business With No Money
If you’re hoping to start your own company with little to no money, you might consider it an impossible feat. However, solopreneurs can launch a venture without any savings, as long as they understand how to raise capital.
There are plenty of financing methods available for small businesses starting a business with no money. These include the following popular options:
- Assistance from family and friends
- Personal credit cards
- Business credit cards
- Business lines of credit
- Short-term or SBA loans
- Venture capital
- Angel investors
Depending on the type of company you’re starting, you may also be able to get a small business grant. This is especially true in recent months following the COVID-19 pandemic, as the SBA offers a few helpful programs for entrepreneurs. Take some time to learn more about these extra resources, as they may be a helpful way to start and grow your business.
Learn More to Protect Your New Business
Once you’ve calculated the amount you’ll need to start your business and made plans to secure funding, it’s time to do your research. Small business owners should take time to learn all they can about the financial ins and outs of their business long before they decide to open their doors. With a little effort, you’ll be well prepared to lead your new startup to success!
Looking for more of the business tips you need to know? Check out our other posts for additional insights.