Starting a small business is no easy task. You have to hire all the necessary staff, acquire all the tools you’ll need to produce your products or services, and maybe even set up an office or storefront.
With everything you need to start a business, it can be tempting to get into debt to get everything up and running. But the truth is, accumulating debt as a start-up can hinder your chance of success.
So how do you start and run a business without debt? We’ve got you covered. Read on to learn how to avoid debt.

Only Use Credit When Absolutely Necessary
Some businesses are lucky enough to have a solid backer when they start their company. Others have to scrape together their life-savings just to incorporate and start selling products are services. Regardless of your financial situation, you should always avoid debt unless it’s a true emergency.
You may think “if I only had x, y, z, I’d be doing so much better.” Stop and assess whether you’re being honest about whether that thing is a need or a want. If it’s actually something you need, make putting it on plastic a last resort, and if it’s not something you need, wait until you have the cash to pay for it outright.
Fake It Until You Make It
A lot of businesses come from humble beginnings and took time to grow to the size they are today. In fact, McDonald’s started as a drive-in BBQ restaurant and it took fifteen years for it to start to grow. In the meantime, minimize your expenses until you have the cash for bigger expenses.
Rent your space until you can afford to purchase your own office. Don’t do everything in-house, instead, outsource things like IT because it’s cheaper than paying for the staff and the necessary equipment. Don’t buy expensive furniture and equipment — opt for used or less expensive options until you can afford the good stuff.
Be Aggressive About Paying Debt
Excessive debt can make an otherwise thriving business go belly up. Realistically, all businesses are going to have some debt when they start out. The key is to focus on paying off that debt as soon as possible and to avoid accumulating further debt.
Failure to pay your business’ debt put your company at risk of legal action by your creditors. If that’s not enough to make you want to avoid and pay off your debt, consider the fact that business owners can be held personally liable for debts if a court determines that you violated your fiduciary duty to the corporation.
The best protection from a debt lawsuit is to not have debt at all.
Knowing How to Avoid Debt Is Key to Success
It’s so tempting to acquire debt in order to get everything you need to set up and run your business. But the truth is, you can run your business on minimal inventory and staff. Once the money starts rolling in, you can invest more money into your business, but in cash.
Want more helpful articles about running a small business now that you know how to avoid debt? You’re in the right place. Check out the rest of our blog for everything you need to know!
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