~Misconception #6 "You Need Money to go into Business."~
This article reprinted from Born to be Rich published in 1985
Misconception No.6 -- You Need Money To Go Into Business
Many businesses begin with up-front money. Large manufacturing companies raise millions of dollars with the sale of stocks before the first customer is found. Others begin with loans from banks and relatives, but it is not uncommon to begin a small business with little more than pocket change.
I've met many persons in my time who envision themselves as the president of a large corporation. Very often these individuals are able to outline the entire plan of operation to the tiniest detail. Almost without exception, the description of the plans ends with "and if I only had several million dollars to begin."
However, these individuals are only daydreaming because they have no intentions of raising the cash and no perception of how to begin this operation. It's a case of the cart before the horse in which the would-be entrepreneur has no idea about how to proceed with a business plan.
If capital investment is required to begin an enterprise, funds can be obtained from other persons. Money can be loaned by a bank, relatives or associates. Venture capital companies exist solely to invest in fledgling companies that need cash. Money is always available for good ideas.
However, many enterprises require little or no money to get started. Walt Disney began his empire from a garage and was bothered by a pesky little mouse. Almost any service oriented business, such as carpet cleaning, maid service, window washing, tutoring, barbering and similar services, can begin on a shoestring budget in your home, apartment or garage.
Time is an important resource
Distributors will often give you a line of credit so that you may have goods and tools for your business without putting out a penny. Labor provides the income during the beginning of the business and the proceeds are reinvested in the business. Profits from the sales of products generally provide the major part of the revenue. Time, not money, is the major resource in the initial phase of the enterprise.
Very often those who believe, "You need money to go into business," use this for an excuse for not entering the business world. Since they have no money and probably never will, they can lament to others that the world is against them because they have all these great ideas but no money to get started.
They might also cry that "business is risky anyway. It would be just their luck that their great idea would be gobbled up by a large corporate enterprise.
Credit cards are now a popular way to launch a small business. I read that nearly half the businesses are now launched this way. Rolling over the accounts into free introductory rates is the way to do this. That "junk mail" that arrives at your doorstep can be a way to roll over monies and pay no interest. It can get hectic as one needs more money, so eventually an entrepreneur could end up in a bank with a business loan. Having a proven source of profits can induce a bank to make the loan.
This article reprinted from Born to be Rich
Were you Born to be Rich? Take a trip down the Mississippi River to find out.