As of 2017, student loan debt stands at $1.34 trillion, according to statistics posted by the New York Federal Reserve. The same research states that credit card debt is soaring at $784 billion.
Starting a business with personal debt can be overwhelming, but here are three smart strategies to help with your venture.
Cut Your Overheads
Image via Flickr by Got Credit
Lowering your overheads can dramatically improve your cash flow and help keep you in the black. The extra cash can be used to grow your startup.
Consider working from home to save costs on office space. This is ideal if there’s only an employee or two in your company.
Green is the new black — 39 percent of businesses state they are spending too much on printing costs. Going paperless in the digital age will save on printing and on space to store physical documents. It’s also great for the environment. Online transactions, sales, databases, and even a card for the staff party can all be done online.
Refinance Student Loans
If you’re making payments towards student loan debt, you can benefit from refinancing student loans. This means you’ll be paying a lower interest rate towards your loan, and it can be spread out over a longer term. A lower interest rate will free up extra cash that can then be used towards the growth of your business.
Refinancing a student loan will require a good credit history and proof that you’ve been able to manage your finances in the past, so it’s best to do as much research as you can before committing to refinancing.
Multiple Income Streams
As of 2018, debt is increasing 36 percent faster than the economy, and the need to earn more income to pay off existing debt is also rapidly increasing.
If your startup is making little to no money in its early stages, cutting costs can only go so far to give you more flexibility with your cash flow. An alternative income stream can help you with the capital needed for getting your new business on its feet.
If you have a car, are able to drive, and live in a major city, you can take advantage of working for Uber or Lyft as a driver in your spare time. Both companies allow you to set your availability with a simple click of a button.
Additionally, no matter what part of the world you live in, you can take advantage of working remotely via the internet as an affiliate marketer. This side job involves advertising and endorsing products on social media platforms and websites to earn a commission.
The Ends Justify the Means
Personal debts can cause extreme stress, but launching a successful business while being tied down financially isn’t impossible. Business growth should be at the forefront of your priorities, and a solid financial plan will help you to achieve your vision.
Whether you’re saving money on overheads or making extra cash from a part-time job, the ends justify the means. The extra cash flow and profits should be reinvested back into the business.