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Thinking about starting your own business? Find out how much money you'll need to get started and the different funding options available to you.
Many would-be entrepreneurs believe that they need a large amount of money to start a business. However, this isn't always the case. While some businesses do require a significant financial investment, there are many small businesses that can be started with very little up-front capital.
So, how much money do you need to start a small business? It really depends on the type of business you want to start. Below, we'll take a look at some of the most common types of small businesses and the approximate amount of money you'll need to get them up and running.
Service Businesses
Service businesses are often the least expensive type of small business to start. If you're starting a service business, you likely won't need to invest in any inventory or physical office space. In many cases, all you'll need is a computer, internet connection, and some basic office supplies. Of course, if you're starting a service business that requires special equipment or training, your startup costs will be higher. For example, if you're starting a home-cleaning business, you'll need to purchase cleaning supplies and equipment.
Retail Businesses
The amount of money you'll need to start a retail business depends largely on the type of products you plan on selling and the location of your store. If you're selling high-end items, such as jewelry or vintage clothing, you'll need more money than if you're selling low-cost items, such as books or DVDs. Similarly, if you plan on opening a brick-and-mortar store in a high-rent district, your startup costs will be higher than if you open an online store or a store in a less expensive location.
Food and Beverage Businesses
If you're starting a food or beverage business—such as a restaurant, café, bakery, or bar—you can expect your startup costs to be on the higher end. In addition to rent for commercial kitchen space and packaging materials for your food or drink products, you'll also need money to purchase cooking equipment and smallwares (e.g., dishes, silverware), as well as furniture for your dining area (if applicable).
Franchises
The cost of starting a franchise varies widely depending on the franchise brand and size/type of franchise location (e.g., kiosk vs. full-service restaurant). Typically speaking, though, franchises require a larger up-front investment than other types of small businesses—sometimes upwards of several hundred thousand dollars. However, because franchises come with an established brand name and proven operating procedures, they can sometimes be easier to get off the ground than other types of small businesses.
If you don't have the money you need to start your small business, you may be able to get a working capital loan. Working capital loans are designed to help small businesses cover their day-to-day expenses, such as inventory, payroll, and marketing costs.
To qualify for a working capital loan, you'll typically need to have been in business for at least six months and have a minimum monthly revenue. Some lenders also require that you have a certain amount of working capital on hand (i.e., money in the bank) before they'll approve your loan.
If you're interested in getting a working capital loan to finance your small business, contact National Legacy Capital Group today. We specialize in working capital loans and can help you get the funding you need to get your business off the ground.
How much money do you need to start a small business? It depends on the type of business you want to start and the products/services you plan on selling; however there are many small businesses that can be started with very little up-front capital investment. So if you have an entrepreneurial spirit but are tight on funds, don't give up on your dreams just yet! There may be options available to help get your business off the ground without breaking the bank.
