Author’s Bio :- Emily Jones is a contributory guest columnist for various websites and communities including Oak View Law Group and CMFA . She has completed her Graduation in Finance and is currently working with an Investment company located in California. She has written some great articles on topics like bankruptcy, investment opportunities, debt consolidation, debt settlement programs and more.
The Small Business Administration (SBA) has estimated that 50% of the small businesses fail completely in the very first year and 95% are ruined within five years from the date of beginning. Keeping in mind the high rate of fiasco and the time it takes to raise a business, should the entrepreneurs concentrate more on eliminating their debt? Or should they plunge deep into their goals while in debt?
Starting a Business While in Debt
If you are in debt while starting a business, there will be lack of capital to get the business running in the beginning. Though there are plenty of opportunities available in the market for your business to grow, lack of capital would certainly resist your growth opportunity. Sometimes, an entrepreneur starts a small business, but lacks the capital required to market his business properly. Consequently, the business fails to attract sufficient customers. Over a short period of time, the entrepreneur witnesses his business dying a slow and a sorrowful death.
There is yet another problem. Small businesses find it tough to survive market competition. For instance, if a greater competitor wages a price war, a small time entrepreneur does not have much choice but to close his business. Quite clearly, businesses which have least competition, minimal capital costs and bright prospects are suitable for entrepreneurs who are in debt. In most cases, that seems like a Utopia.
A few Possible Solutions
Remember that your business is your first priority. So you need to make some sacrifices. For instance, reduce your living expense, become a total workaholic, and do the grunt works yourself. You may also do some part-time jobs to fund your business.
Consider freelance online jobs to fund your principal business. Starting an online business is damn cheap; it might just cost around $100. From an online business, you can earn some quick bucks within a short period of time.
The Best Case
Your plans succeed and after five years, your business is doing pretty well. You have completely paid off your initial debts. You might have acquired some new debts, but that is not a problem because you have enough capital and reputation now.
The Worst Case
Your enterprise fails and you go deeper into debt. Such a debacle will foil your future endeavors and you will lose a few valuable years. Only bankruptcy can take you out from this miserable situation and that will damage your credit, which is already in a bad shape.
Conclusion
Working part time and living below your means may work out if you are starting a small business while in debt. However, it is always wise to shed down your debt before starting a new venture.
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