How much cash will I need to start my own business?
How much cash do you need to start your own business? It depends on the kind of business. But, generally, if you’re going to start consulting, you DON’T need a big hunk of cash to get started. Realistically, you could probably start independent consulting for less than $100 in start-up funds.
When I talk to people who consider independent consulting, the common–and mistaken–idea is that you need to have a significant amount of cash to get started, maybe thousands of dollars. Or maybe pool your money with partners, or get outside funding. First of all, going in with partners or getting outside funding is usually a big mistake; I’ll talk more about why that’s typically true in later posts.
For now though, just remember that to be a self-employed consultant, you actually need very little to get started.
I know, I know. You’re probably thinking: But I need an office, furniture, high-speed internet, a phone line, fax machine, copier, a new laptop, an accountant, an attorney, a fancy website, graphic design, business cards, brochures, time & billing software, and maybe even specialized software for the consulting work I’ll be doing.
It’s overwhelming. And it’s also not true.
First, rethink what’s really necessary, especially starting out. Instead, think: what’s the absolute minimum I need to get clients, do the work, and get paid?
I worked out of my home for 4 years before I decided to get an office. Expensive enterprise-level software can often be bought very cheaply by purchasing a developer version. Do you really need brochures? When I first started my consulting business, I spent a bunch of time and money designing and printing nice, professional brochures, and sending them to clients; but I can’t say I got any business from it. It was more an exercise in doing what I thought I needed to do to be in business, rather than testing out what really worked.
One of the greatest things about technology today is that a lot of the tools you’ll need for starting your consulting business can be had for free or very low cost. That goes for graphic design, website development and hosting, accounting software, printing, marketing, and pretty much anything else you can think of. I’ll give examples of some of those tools in later posts.
There are already too many imagined reasons NOT to start your consulting business. But start-up funds isn’t one of them. Don’t make a lack of money an excuse for not starting your own business.