Are you a traditional employee dreaming of going indy? Do you wrestle with how to increase cash flow so you can finally walk away from that 9-to-5 job and begin your new self-employment career? The future is yours to claim. Let’s start by being practical.
Many small businesses need capital before they can open their doors to customers. Plus, you likely have bills or a family to support when you leave your job, and it’s important you feel financially comfortable before taking the leap. How can you get to that point? Here are five simple ways to save, so you can successfully start your small business.
1. Bank Your Birthday Cash
Are you lucky enough to have sweet Aunt Edna sending you $20 in a card for every birthday and major holiday? It’s easy to stick that bill in your wallet and use it to fill up your tank of gas or grab some groceries, but don’t.
Any money that isn’t already allocated in your budget for bills should go straight to a bank account that’s untouchable until you finally become an indy worker. The same goes for holiday money or any other positive financial surprises. This will create the cushion you need to kick your dreams into overdrive when you’re ready.
2. Put Your Taxes to Work
Do you get a good chunk of change back every year when you file taxes? Consider yourself lucky, and immediately deposit that check right into your future business bank account. Yes, it might feel tempting to spend it on something fun and frivolous, but it will serve you better earning interest until you’re set to launch. If you want to know how to increase cash flow, this is one of the quickest ways to do it.
3. Save 10 Percent of Your Salary
When I started my first job, my mother always reminded me to put 10 percent of every paycheck into my savings account. Her advice applies not only to 16-year-olds but also any employable human — especially those looking to branch out to start their own business.
Ten percent may seem like a lot to save when you already have a tight budget, but the more you put away, the quicker you can plot your escape from your day job and become the independent worker you’ve always dreamed of being.
4. Pick up a Side Gig
Saving a percentage of your salary is just the first step. If you’re looking to really drive the process forward, pick up a side hustle. The first and most obvious step is to seek clients in your desired field. Are you a graphic designer? Consider freelancing some logos and business cards. Want to write? See if you can pick up a beat at your local newspaper or write copy for websites.
If you’re really hungry to supercharge your savings goal and don’t care how you get there, there are plenty of quick side gigs to snag. Think: shoveling in the winter, babysitting your neighbor’s children or picking up a shift at a local business, like a florist or dog groomer.
5. Take out a Loan
Okay, I’ll be honest. This isn’t my favorite method to prepare for starting a business. Taking out a loan might help you get all the startup cash you need, but the moment you sign on the dotted line and walk away with a check, you’re immediately in debt. Who wants to be in debt before they even begin?
But don’t let me knock the idea completely. Some businesses, especially those selling physical products, often need to purchase their inventory ahead of time. If that’s your life, a loan may be an ideal option to increase cash flow before you launch. Just remember to hunt for the best rates and terms before going this route.
All in all, remember that you don’t need to starve yourself for the sake of your business. There are plenty of ways to cut corners while still enjoying the natural flow of your life — just with a little extra discipline and hard work.