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~Misconception #6 "You Need Money to go into Business."~

Updated on November 6, 2014
"...So you wanna borrow some money..."
"...So you wanna borrow some money..." | Source
"I wanna take this to a whole new level!"
"I wanna take this to a whole new level!" | Source
"I started with an apartment building in New York and then things got entirely out of hand!"
"I started with an apartment building in New York and then things got entirely out of hand!" | Source
"I wanna borrow a carrot!"
"I wanna borrow a carrot!" | Source

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.

Raising Capital

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.

~*~

Update:

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.


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    • profile image

      reynold jay 

      7 years ago

      Hi Sue! One reason I took up writing was that it had no startup costs of any significance.

    • profile image

      Sueswan 

      7 years ago

      Hi Reynold Jay

      Good to see you.

      Very interesting and informative. I would never have thought that one could start a business without money.

      I hope the New York agent represents your books.

      Take care

    • Reynold Jay profile imageAUTHOR

      Reynold Jay 

      7 years ago from Saginaw, Michigan

      I love working, which is now spent writing and operating my sales internet business. Hubbing is down a bit at the moment as my sales keep me busy.Thank you for checking in today.

    • christopheranton profile image

      Christopher Antony Meade 

      7 years ago from Gillingham Kent. United Kingdom

      There is no substitute for hard work. I am glad that you reminded me, as I need to do quite a lot of it.

    • Reynold Jay profile imageAUTHOR

      Reynold Jay 

      7 years ago from Saginaw, Michigan

      We are all suffering through this difficult period. It's good that you have found something profitable for your writng talents. I've been keeping a low profile recently while I wait for a New York agent to decide if she wants to represent my novels. I'll know in two or three weeks if I have a legitimate writing career ahead of me. Thank you for sticking with me!

    • Gypsy Rose Lee profile image

      Gypsy Rose Lee 

      7 years ago from Riga, Latvia

      Thanks for the info. I've found a job through the Internet that pays me for writing articles. Not much money but keeps me busy. I agree with no great resources we can't get far but we can keep our heads above the water until better times. Who knows with the info I have gotten on other sites maybe I will set up my own website and see what happens. In other words if we keep busy things will happen come what may.

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