There’s no doubt that running a business costs a lot of money. While you may take advantage of loans or credit for your business, it’s also good to build up some savings before you start. Here are a few ways you can add to your savings so that you have more working capital when you open for business.
One of the best ways to increase the amount of money you have available for savings is to trim back your expenses. These days, you might be paying monthly for a lot of subscriptions that you don’t actually use. Make a list of them, and determine how much they are eating into your budget. It might be easy to cancel a few of them or consider a more comprehensive service that costs less than the total. Be wary of cutting back too much, though. Drastic changes to your budget can often backfire, causing you to panic and overspend. It’s better to make minor changes over a period of months, especially if you’re looking for long-term improvements.
Save a Little at a Time
Saving money to start a business might seem like something you need to do in a grand fashion. However, even saving a little can make a difference. Get in the habit of putting away a few dollars here and there. If you’re in the habit of paying cash for most things, set a jar on your nightstand for the spare change at the end of the day. When you pay bills, drop $10 or $20 into a savings account. It may not seem like much in the beginning, but it will accumulate over time. Once you start to see your savings grow, you may be more motivated to save larger amounts.
Make Savings Automatic
The best way to get in the habit of saving money is to not force yourself to create the habit in the first place. You may have most or all of your bills on an automatic payment schedule for a similar reason. That way, you don’t have to worry about forgetting one of them and dealing with a late fee. When you get paid, set your account to do an automatic withdrawal into a savings account. You’ll get out of the habit of spending that money because it will already be gone. Then all you have to do is make changes to the savings as your income or spending flexibility increases.
Consider a Side Hustle
These days, almost everyone has a side hustle. A side hustle is something that you do beyond your day job that helps you bring in a little extra money. For some people, a side hustle is an occasional thing, something that they can do whenever they have extra time. For others, a side hustle might be a part-time job. In either case, think about ways that you can monetize skills and talents that you already have. For example, if you like doing art or making crafts, you might be able to sell your creations on a site like Etsy. Then you can set your profits aside for your future business.
Learn While You Earn
The best side hustles are those that allow you to earn money while providing you with additional benefits. If your day job isn’t in the construction industry, you might consider a side hustle that helps you build the knowledge and experience you need to qualify for a contractor license. The labor shortage in construction is serious, and people who are interested in joining an in-demand field might have more flexibility than you expect. Look for companies that are hiring entry-level workers in your chosen field, and reach out to a few of them. You might be able to secure a part-time or full-time job that helps you move toward your goal.
Saving for your future contracting business is one of the best decisions that you can make. Getting the right preparation before you take the contractor licensing exam is another. For more information, contact CSLS today!