Supporting yourself financially in the first year

Posted on Posted in Banks, Budget, Business Strategy, Marketing, UK

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One of the biggest worries when you’re starting out is whether you’ll make enough money to support yourself during the first year. Launching a business can be a tough time and you may not make much, if any, profit. It’s important, therefore, to manage the cash you’ve got effectively. The following tips will help.

Support Yourself – Your business
Don’t rush out and buy everything. Consider leasing or using hire purchase to fund fixed assets such as vehicles or equipment. That way, you can spread out repayments.
Consider asking your clients to pay a deposit upfront and use a credit management service such as Barclays BankCREDITFOCUS to check out customers before offering credit.
Don’t take on too much work too quickly – better to grow steadily than overstretch yourself. This may sound like poor advice, but running out of cash, not customers, is actually one of the biggest threats any new business faces.
Budget for seasonality, factoring in your busy and slow periods.
If you rent business premises, avoid long leases. Perhaps you could sub-let space, to reduce your outgoings.

Support Yourself – Your personal life
Shop around for the best deals on everything from home, business and car insurance to utilities and mobile phones.
If you have credit-card debt, look at switching to a lender offering a 0% interest period.
If you have personal loans, including a mortgage, look at whether you could get a better deal elsewhere or even speak to your loan provider about taking a repayment break.
If you have a car, and your new business isn’t dependent on it, think about trading it in for a cheaper model or perhaps even selling it and using public transport instead.
Consider downsizing to a cheaper home.
Look into the possibility of working from home rather than renting business premises (although bear in mind that doing so might have cost implications on, for example, your house insurance).
When you start out, consider running your business on a part-time basis, so that you can stay in employment until you’re sure that your business is secure. Alternatively you could take on another part-time job.

 

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