Without even a small amount of capital to back you up, it would be absolutely impossible to begin a business. The phrase, ‘You need to have money to make money’, is absolutely true so savings are vital when beginning a business. You will initially need a small amount of money to carry out the market research necessary before beginning a business. It may not be a large amount, depending on what type of market research you intend on carrying out, but you must establish whether or not there is a market in a particular area for a certain product or service. Do not rely upon your friends and family telling you that they think it is a good idea, you must thoroughly research it to avoid investing money into a business that will never succeed.
You will usually have to have a small amount of savings even when you apply for a business loan. You may not need a lot but it will help to reassure the bank manager that you are trustworthy and good with money. If you have no savings at all, the bank manager will wonder why and think you are not very good at organising your finances.
It may be possible for you to work alone during the initial stages of the business, so you can save money on wages, but you will still need some savings to live off and help you get through everyday life. You will need some money behind you to begin trading. You will need to buy the basics such as a computer and a telephone but you may also need to buy machinery, materials, vehicles, offices or storage, business cards and advertising.
Once the business is up and running, you will still need to keep as much money as possible in savings. You need some finances for emergencies, such as equipment breaking, a temporary crash in the market or a new product failing.
You will usually have to have a small amount of savings even when you apply for a business loan. You may not need a lot but it will help to reassure the bank manager that you are trustworthy and good with money. If you have no savings at all, the bank manager will wonder why and think you are not very good at organising your finances.
It may be possible for you to work alone during the initial stages of the business, so you can save money on wages, but you will still need some savings to live off and help you get through everyday life. You will need some money behind you to begin trading. You will need to buy the basics such as a computer and a telephone but you may also need to buy machinery, materials, vehicles, offices or storage, business cards and advertising.
Once the business is up and running, you will still need to keep as much money as possible in savings. You need some finances for emergencies, such as equipment breaking, a temporary crash in the market or a new product failing.