If you are considering a small business start-up loan to finance your dream of owning your own business, proceed with caution! You may be putting your personal assets at risk. It is wise to consider financing your new business with free sources of business start-up financing. Most small business loans are secured by your home or other high-value assets you own. Such was the case with a business owner named Jim. He only listens to his story.
real life horror story
Jim wanted to open a 24-hour gym in suburban Atlanta. After conducting extensive market research, he discovered that a gym in his community had great potential to turn a profit in just two years. Jim decided to attend a paid business plan workshop at a local university.
After completing the course, you had in your hands one of the most impressive and profitable business plans you could ask for. This plan would surely have the bank’s loan officer salivating. Jim was approved for a small business start-up loan without any problems. After all, he wasn’t married, worked full time, and owned two properties. His high credit rating, savings account balance, and his experience in the field as an award-winning bodybuilder made him a “shoe in” for loan approval.
Seven months after Jim’s grand opening, he learned that a large fitness center franchise was opening a location just down the street from his gym. This new gym boasted an Olympic-size swimming pool, fitness classes, childcare, and a staff of polished and tanned personal trainers. What’s even worse? The monthly membership fee was much less than what Jim’s gym charged!
I can tell you that Jim spent many sleepless nights worrying about the future of his new business and the mountain of debt it was sitting on.
How does the story end?
Jim had to reduce his monthly membership fees to compete with the new fitness franchise, sacrificing the profitability numbers of his business plan. He also had to increase his advertising budget and offer members greater incentives to join, another hit to profitability numbers. Jim still keeps his head above water. He decided to hire a startup efficiency expert to help him reduce his operating costs.
Don’t let what happened to Jim happen to you. Do extensive research on any small business start-up loan package you are considering. Also, consider how to avoid taking out a loan altogether by researching free sources of start-up financing.
The startup business survival guide is a great resource for anyone who wants to start a business with little or no money. You can make your dreams of owning your own business come true without a bank loan, even if you have little or no money. I am living proof!