You’ve got a great business idea. You’ve done your research and confirmed it a viability opportunity. You’re ready to launch…
…but your finances say, “NO GO”.
You don’t often hear about ways to manage a new business when you’ve got credit card debt. A lot of advice assumes you’re free to take on a loan. So, what’s their advice when you’re already leveraged to the hilt? Let’s find out.
Smart Ways to Manage a New Business (When You’re Held Back by Credit Card Debt)
Timing is everything when it comes to launching a business. Too early and people won’t understand what you’re offering. Too late and you’ll compete with others already ahead and growing fast.
Personal debt is an unfortunate set back for many entrepreneurial dreams. That is if you’re not willing to balance business with finances.
Start Lean and Stay Agile
Taking on too much is the death knell for startups. Avoid costs by keeping the operations as leas as possible. And, stay agile with your growth strategies.
Instead of a brick-and-mortar operation and traditional route:
- Set up an online presence with a site, social media, and 3rd party listings
- Use open source software in place of expensive 1st party resources
- Outsource services instead of hiring in-house employees
The cost-cutting measures give you more room to save and repay credit card debt. It also lets you explore personal saving strategies without cutting into business resources (since they’re a-la-carte).
Go the Crowdfunding Route
Wealthy business owners have a secret weapon: other people’s money.
Crowdfunding your startup is a smart way to mitigate financial risks. Crowd investors understand the business may not come to fruition. They’re betting on your success, and sometimes it goes belly up.
Here’s what you can do:
- Get acquainted with the SEC’s crowdfunding regulations
- Create a campaign on a crowdfunding platform
- Populate the page with a dazzling overview, roadmap, and incentives
- Promote the crowdfunding campaign to family, friends, and social
Use the raised capital for business expenses. In the meantime, continue your day job and use that money to pay down credit card debt.
Take Advantage of Tax Deductions and Incentives
There are several ways to leverage taxes in your favor — like:
- Writing off home business deductions if operating out of a spare room
- Tracking mileage if using a company vehicle for legit business trips
- Operating out of a tax-friendly state to lower sales/state taxes
- Reporting business expenses and legal and/or professional fees
Use what personal tax saving actions you can, too. Then, reinvest tax return money to knock out credit card debt.
Consolidate Debt with a Loan If It Offers Better Terms
Have outrageous credit card debt with equally outrageous interest rates? Consider consolidating the debt with a personal loan. This takes care of the credit card while potentially providing better terms.
Talk with your tax professional, first, before making a decision. Then, work with an online lender to get quotes from several at a time. Compare, choose the best option, and practice good financial responsibility.
Get Covered (At Least on Taxes)
There are ways to manage a new business even if you carry debt. Many entrepreneurs found success despite the setback. You could be one, too!
Here’s what’s recommend: Get professional services at least on the tax stuff.
Let someone else handle the finances while you work on startup growth. Then, check back for more helpful business and finance tutorials. Follow us on social for hot takes and great insights, too!