The truth is, not everyone is cut out to work for someone else forever. You may have “an entrepreneurial spirit”—an inclination down to your very bones that you are meant to run your own business.
The question often comes down to funding, and particularly for recovering addicts who may have spent time and personal funds getting on the road to recovery.
But if you are destined to jumpstart a startup, here are 4 ways you can self-fund.
1. The Day Job Method
It might not sound that appealing, but for thousands of individuals looking for another line of work, the old line, “Don’t quit your day job” might actually be great advice. Future A-list actors wait tables or pour espresso. Future tech millionaires made pizza or took IT contract work.
You can keep a full-time job and save money for your future business, or look at your “day job” as a side skill to provide income for your “real job” of your startup, known as moonlighting. You may find a balance in part-time work.
However you work the logistics into your schedule, this method tops the list because it involves no debt, which makes it more feasible for many self-funders.
2. The Assets Method
Another way to self-fund, that won’t require accumulating debt, involves selling everything you own of value or cashing out assets.
People often have thousands of dollars worth of things, laying around the house. If you are serious about self-funding, liquidizing assets can provide resources from:
- savings accounts
- cashing out a retirement account (when it allows)
- all of the above
Together, even small assets can add up to big funds you need, though you may live with fewer things until you get your startup rolling.
3. The Borrowing Method
There are lots of ways to borrow money, from the very costly methods (credit cards) to the high-risk methods (home equity loans—pay it off so you don’t lose your home!). There are also several ways to borrow that most people do not consider, but should.
You can take out a loan against stocks and securities you may have. The interest rates can be quite low, just know that if stocks dip you will need to come up with additional collateral or pay down the borrowed amount.
You can take out a loan against an investment, such as against an IRA or 401k. Often these loans are quite short-term, but it may work for your business purposes.
You can borrow against the cash value on some life insurance policies. While the repayment is often quite flexible, it would decrease the payout to your survivor(s) in the event of your death, unless you’ve repaid it.
Any of these options may be more feasible than directly borrowing from a bank.
4. The Crowdfunding Method
If you have a really great startup idea, and your friends and family support you, crowdfunding is another fantastic way to self-fund. Maybe you are a fantastic chef and your family would help support you opening a food cart or restaurant. Maybe you’ve been working for a firm and you’re ready to branch out on your own, and your friends believe in you.
Whatever the circumstances, direct crowdfunding (by email or phone call), or online crowdfunding (like Kickstarter or Indiegogo) can provide the opportunity for everyone who supports you to give the little bit they can to help you realize your dream.
However you finance, don’t forget to take care of yourself, as well. Your creative energy is your greatest asset!