You’ve been dreaming of starting your own small business, but you’re drowning in debt and don’t think it’s possible. However, the truth is, personal debt doesn’t necessarily mean that you can’t start a business, it just might take a little more time and effort.
If you are in or near Cincinnati and thinking of starting your own business, contact Orcutt & Company. For more than three decades, we have been helping small businesses, entrepreneurs, individuals, and families plan for their financial future. We can help you get your personal debt sorted out and find the funding that you need to start your own small business.
In this article, we’ll explore what you need to know to start a small business with personal debt.
You Do Not Need to be Debt Free to Start a Small Business
When it comes to starting a small business, there are no rules as to when you should make your move. If you are waiting for a sign to get started, you may find yourself waiting your life away.
According to financial experts, the debt situation in the United States is grim. The average American household has $182,421 in mortgage debt, $50,626 in student loan debt, and $16,000 in credit card debt. It is very rare to find someone that is 100% debt-free. So, if you are waiting to pay off all of your debt before starting a small business, you may never see your dream come true.
Therefore, if you’ve got a dream and a plan, you may want to take a chance, even with personal debt. After all, there are no laws against starting a business with personal debt and no one will stop you from becoming an LLC or sole proprietor if you decide that is what you want to do.
You Do Need to Know What Your Budget Can Handle
Of course, just because you can start a small business doesn’t mean you should jump into any business that pops into your head. There are lots of legal and financial changes that come with starting a business that you need to be prepared for.
While personal debt may not prevent you from becoming an entrepreneur, it will have an impact on the types of small business loans you are able to get, and it may turn away potential business partners and investors.
Personal debt may create additional stress when starting a business. How will you use your early profits? Will you be able to reinvest them into your business or will you need to use them to pay off your debt?
It’s also important to understand that personal debt can cause complications for your business finances. You must determine if you want to deal with complicated finances or would you rather them be simple.
Ready to Get Started?
The bottom line is, it is possible to start and build a small business even with personal debt. The truth is, many people find wealth when they become business owners because there’s no limit to what you can earn like there is with a typical 9 to 5. Your earning power as a business owner depends on how you handle your personal and business finances as you get started.
Don’t let your personal debt hold you back from making your dream come true- but don’t push it off and ignore it either. Be aware of your financial situation and work on eliminating it. Let Orcutt & Company help you get control of your personal finances and get you on the road to becoming a business owner.