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How An Entrepreneur Makes Money When They Don’t Have Any

How An Entrepreneur Makes Money When They Don’t Have Any

I understand what it’s like, I’ve been there myself, you have all of these big ideas that you know would work, make millions, go viral and so on, but you simply don’t have the cash to push them through. It’s frustrating, finding investment is hard, and you feel as though you’re in a vicious circle that you’ll never get out of.

But there’s hope! To make money when you don’t have any, you have to do two things.

1. Scale Down

Number one is scaling down. When you don’t have enough money, you need to have a certain mindset that can take you from location A to location B.

This mindset is made up of acceptance and compromise. Accepting the fact that you can’t go out and spend thousands on advertising, then compromising to find a scaled down version of what you originally wanted to do.

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This is where most people struggle because they aren’t willing to put out what they would call a…bad product/service. But for anyone who’s read the book The Lean Startup by Eric Ries, you’ll know where I’m coming from. For those of you who haven’t, I recommend reading it.

The Lean Startup talks about your MVP – Minimum Viable Product. This is a version of the product or service that requires the least amount of time and money spent but still does the job in a minimalist way. What’s the point in spending thousands on a new idea if you haven’t tested it yet, or worse, spending thousands of hours and wasting time you can never get back?

This is why sometimes, the one with the least money comes out on top. Having too much cash can be a burden, it makes you reckless and somewhat lazy. You begin to believe that flooding money into your idea will automatically make it work, but it doesn’t quite work this way.

Example:

Some of the best companies in the world were started from the absolute bare minimums. Take James Dyson for example. James was an inventor, had some ups and downs, but was fairly stable. There came a time in his life when he didn’t have too much cash to play around with. He had a big idea, yet couldn’t implement it.

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Instead of giving up, James turned to the MVP system and created a hoover out of a cereal box. (I’d love to tell you how). He hoovered the entire house twice and realized that his cheap product worked. This was step one complete; he worked with what he had where he stood and came up with something that could take him to the next step.

The Takeaway

I see so many people complaining about not having enough money, yet they haven’t even tried the basics. A world class website straight out of the gate isn’t realistic, but don’t worry. Just having something in place, a platform to build from is the most important factor. You can improve as you go, learn as you go and enable the business to move in parallel with your growing profits.

This system works very much like video games. You can afford better things and be granted access to more exclusive items/opportunities the longer you play and the further you advance. You don’t put the disk in and complete the game in 5 minutes with everything available to you.

Progression is progression, no matter how slow you go or from where you start, all that matters is that you’re moving.

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2. Be Creative

The second component is being creative. Instead of following a single given path, you need to search for ethical shortcuts, tricks, and opportunities that no one else spotted.

You see, if everyone is after the same goal, reading the same material and learning from the same companies, there will come a time where nothing differentiates you from your competitors. Being different, thinking differently and running as far outside of the box as you can definitely work in your favor when you’re broke.

Example:

Richard Branson may be the king of this strategy. When he first started out in business, before all of the billions, he too had similar issues in the financial department as I guess many of the people reading this have today. He needed sponsors for his new magazine, but of course, no one wanted to be associated with a new brand that had a small readership, no history, or proven results.

So what did Richard do?

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He contacted the biggest company that would get on the phone with him and told them that they could feature in his magazine for free with a double page spread. No catches, just a free advert that would point customers in their direction with no risk or money to be paid. The large company obviously said yes because they had no reason not to, it was free adverting.

So how did this benefit Richard?

Richard then went to smaller companies and showed evidence of this large company featuring in his magazine. To them, it seemed as though the larger company had bought a double page spread. Without hesitation, they all began signing up to Richard’s magazine and paying him for a feature. They must have thought, “If such a big company is doing it, then they must know something we don’t.” He used a form of social business proofing!

This cost Richard nothing but made him the money he needed to reach the next stage of his entrepreneurial journey. A simple creative thought that, for all we know, could have been the catalyst towards his billion-dollar fortune.

The Takeaway

Sometimes it’s the smallest, most simple and most overlooked features that can make all the difference. Having money is great, of course, it opens up opportunities, but there’s something about working with a small budget that heightens your senses, makes you hyper-aware to opportunity and more selective in how you spend what you have.

If you’re broke but have a great idea, never forget that you have the start-up advantage, something that larger companies have been trying to get back since they grew.

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Published on January 8, 2021

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

1. Pay More Than the Minimum Credit Card Payments

Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

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You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

2. Start With High-Interest Credit Card Debt

If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

3. Revisit Your Budget

Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

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Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

4. Avoid Using Your Credit Cards

Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

5. Start a Side Hustle to Boost Your Income

You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

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Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

6. Sell Your Used Items for Extra Cash

Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

7. Know When to Seek Help With Your Debt

Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

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There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

In extreme cases, the debt solution can be:

  • Debt relief – where your debt is partially or wholly forgiven
  • Debt consolidation – taking out one loan to repay others
  • Debt settlement – the creditor forgives a significant portion of your debt
  • Bankruptcy – legal process for seeking relief from some or all your debts

It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

Wrapping It Up

Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

More Tips on How to Pay Off Debt

Featured photo credit: rupixen.com via unsplash.com

Reference

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