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How to Save Money for a New Business

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22.09.2021

How much does it cost to start your own business? Well, that depends. However, according to the Small Business Administration, most micro-businesses cost approximately $3,000 to launch, while most home-based franchises cost between $2,000 and $5,000. Yeah — I’d say that’s really conservative.

In the scheme of things, that’s not an awful lot of money. But, considering that 56% of Americans have less than $5,000 in savings, and a third have no savings at all, coming up with that amount can be problematic. While you could take a loan or max out your credit cards, you could save money for a business to avoid high-interest debt. Again, $2,000 to $5,000 isn’t really all that much.

At the same time, when money is tight, that is a lot of money to come up with. So, here are 11 ways that you can realistically save money for a new business.

There isn’t one right answer here. For some, you might be fortunate enough to get your business started for under $500. Others might need $10,000. Regardless of the exact figure, the SBA states that you can calculate your startup costs by identifying expenses like;

“Once you have your list of expenses, you can estimate how much they’ll actually cost,” notes the SBA. “This process will be different for each expense you have.”

“Some expenses will have well-defined costs — permits and licenses tend to have clear, published costs,” they add. “You might have to estimate other costs that are less certain, like employee salaries.” To find out how much similar companies spend on expenses, look online and speak with mentors, vendors, and service providers.

After you’ve identified what the business expenses will be, you can organize them into one-time expenses and recurring expenses. You can determine how much capital you’ll need based on one-time costs and regular costs. You can then break down the saving process into smaller, more manageable steps to make the process easier.

Having a budget is an important component of every successful business, so now is the time to prepare one if you haven’t done so yet. Several tools can help you do this, with methods ranging from old-fashioned pen and paper to more modern options like budgeting apps. These apps let you manage your household expenses, as well as business finances, in one........

© Entrepreneur


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