How Much Money Do I Need To Start A Small Business?

How Much Money Do I Need To Start A Small Business?

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On my apps, many people ask “how much money do I need to start a small business?” and, of course, the answer is that it depends on many factors. So instead of providing some high-level answer that would not be too helpful, I’ll try to explain how to calculate the cost of starting your business so that you can figure out how much money you will need to start your own business. Here is a brief video tutorial on how much money you will need to start your own small business.

Cash Flow Analysis To Help Understand How Much Money Is Needed

Performing cash flow analysis is not difficult, but it is something that stumps many people because it sounds intimidating. But cash flow analysis is just a glorified way to say that you will make an itemized list of expenses and revenue that comes in. Since in this article we care about how much money is needed to start a small business, we can focus on only itemizing the costs. There are two kinds of costs. There are costs to start the business that you incur before the business is actually launched. And then there are costs that you incur once your business is operational. What you usually want to do is give yourself about 6-18 months of runway before you run out of money once you have started your small business. Here is a video tutorial on how to write a cash flow analysis to determine how much money you need to start a business.

Raising The Money That You Need

Once you know how much money you need to raise, you can begin looking into ways to come up with that money. If you have been watching my videos or following my blogging, I usually split the potential sources for where to get money into 7 sections. Here is a video on those 7 sections. Here is a tutorial with the different fundraising ideas.

The 7 sources of raising money are loans, grants, investments, donations, revenue of your actual business, creative fundraising techniques, and getting the money upfront from potential customers. Additionally, if you are based in United States, you can take a look at government sites like or to see whether they have can be of help to you. And if you are not based in United States, there are probably equivalent sites for your country so just look up what those are.

Here is our tutorial on raising money with loans. Here is our tutorial on raising money with grants.

What If You Can’t Get The Money You Need To Start A Small Business

Unfortunately, most people never end up getting the money they need to start their small business. This causes many people to abandon their dreams. But it doesn’t have to be that way. I want to introduce the concept of bootstrapping which is a way to create your business without needing money. Bootstrapping is as much a methodology as much as it is a number of things you can do. Here is a brief video about bootstrapping a business.   If you like the video, to get more similar videos, please subscribe to our YouTube channel by clicking the subscribe button on the widget right below this text.

Further Business Resources

For more business-starting resources, please take a look at our business planning mobile apps. Here is the iOS business plan app and here is the Android business plan app. Additionally, here is the iOS fundraising app. And here is the Android fundraising app.

And please check out and subscribe to my YouTube channel where we cover many marketing topics.

Author: Alex Genadinik

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