Many people dream of being an entrepreneur, but not everyone has what it takes to make it a reality. If you’ve decided to take the plunge and start your own business, congratulations! It’s not an easy path, but it can be massively rewarding.
Unfortunately, turning a small business into your primary source of income can mean some difficult financial times for your family if your business isn’t successful right out of the gate. To ease some of the potential financial pitfalls of starting a business and caring for a family, follow these three tips so your business dreams don’t come at the expense of your family’s security.
1. Save Before Leaving Your Job
It can take awhile before you’re truly earning enough to support a family from your small business. Since income can be hard to come by, you want to make sure you have enough saved to cover six months to a year of expenses before leaving your job and working your small business full time. You know, basic cash flow stuff. The extra funds will make those lean months much easier to get through if you’re not worrying about how you’re going to cover your family’s expenses.
2. Freelance on the Side
Sometimes caring for your family means taking on a side job while you continue to grow your business. For example, if you’re starting an e-commerce store but formerly worked as a staff writer for a publication, you can use those talents to get writing jobs on the side. The freelance income can help cover your family’s expenses while you grow your business. As the income from your business increases, you can slowly reduce your freelance work until you’re making enough from your small business to care for your family.
3. Keep It as a Side Hustle
Sometimes your small business may need to continue to be a side business until it’s generating enough income to allow you to leave your job. While working a full-time job and growing a small business may seem daunting, it can prove to be the smartest decision so you don’t have to disrupt your family’s income. Growing the business on the side may mean you have to stay in your full-time profession longer than you would like, but it also means when you’re ready to leave, you aren’t worrying about finances and are in an excellent position to provide for your family.
4. Seek alternative funding
As a new business owner, securing additional funds from the bank to make your business dreams come is difficult, if not impossible. Because new companies have limited credit histories, banks are wary of giving small and new entrepreneurs loans. Luckily, there are alternative funding options you can use, including accounts receivable financing, which will allow you to meet your business’s expenses without having to take out a loan or put your personal assets on the line.
Although becoming an entrepreneur takes a lot of financial commitment, it is possible to sustain and support your family while starting a business. Nothing about the startup process is easy, but becoming a business owner is one of the most rewarding career choices possible.