Starting a business can lead to financial independence and freedom, but it can be hard to imagine when you are saddled with student debt. The average monthly bill for student loans is just under $225, which makes it hard for young people to take a risk. However, with the right approach, it is still possible.
Consider a Low-Risk Idea
If you are worried about risk, you can start with a low-risk idea. This way, you can keep your current job and benefits and start your business on the side. Look at what it takes to get started, such as insurance, permits, certifications, and more. Consider what taxes you will need to pay and more. Do the groundwork so that you can start your business without quitting your job.
Reduce Your Bills
If you can reduce your bills, it will help you launch your business. You may be able to refinance or consolidate your student loans, either with a good credit score or a cosigner. This will help a great deal if you have an expensive private student loan. You may be able to extend your payment term to reduce your payments further. Sometimes you can ask for a deferment or forbearance.
Find a Mentor
One way to plan ahead before you start your business is by finding a mentor. You can learn a lot, including how to make a business plan and different ways to get funding. You can actually look at the US Small Business Administration’s local assistance tool to find a center for small business development near you. You can also ask for a mentor through a nonprofit such as SCORE. Look at your college alumni directory, and find someone who can help you learn.
Research Funding
One of the most difficult things to figure out is where you should get funding. It can be difficult to get a loan from a bank unless you have a history of profitability. In addition, they will want a lengthy personal credit history. Some people are fortunate enough to self-fund their businesses, but this isn’t common. You can use credit cards, but you need a plan for paying them off.
Crowdfunding is becoming quite popular, as you can draw from a lot of different investors. You won’t have to repay the funds. You can use Kickstarter, Indiegogo, or GoFundMe, and you can list the products of the business that you want funding for. Make sure that you include details about your business and let them know if you offer anything to investors.