Is it possible to run a debt free business?

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  • #5153
    Avatar of Matthew KingMatthew King

    I would personally say it is possible to run a debt free business, but that doesn’t mean a business without bills. A debt free business would be a business that started or has paid back all debts that are owed. Let’s take this for instance. I started my web design business with a simple $500 and that was to pick up a business license,business tax ID, and a website name with hosting. At that time I was in debt for the $500 I initially invested. After that I went to proposing my services to businesses around my local area and via a freelancing platform. When I got my first job, I did everything I could to pay back the $500 a invested in the business. Afterwards, the business was completely debt free. Now that didn’t mean that I wasn’t going to owe another year of hosting fees, internet fees, renting an office in the future and etc. However, most early businesses are ran from a home environment.

    Now, if you saved up a little money depending on what business you are trying to start you can begin a business for as low as $500 or $20,000 it really depends on what type of business you will be starting, how you are going to market, pay back the investment, hours you are willing to commit and etc.

    What is everyone else’s thoughts? Can you be debt free? Bill free? How profitable can you make a business right out of the gate?

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    • #5155
      Avatar of SusanSusan
      • Total Post: 36
      Points: 126
      Newbie 1

      Great point, Matthew. I agree that you can have a debt free business, but as you mentioned, even if someone doesn’t have to borrow to get started, it is always so important to also know – and anticipate – what the ongoing bills may be, such as website hosting, etc. This is an area where many new business owners get tripped up, as the costs going forward could still be more than the amount of money that is coming in (at least initially). With that in mind, it is important to not only develop an overall business plan, but also a financial plan.

    • #5332
      Avatar of Reshmika ChristopherReshmika Christopher
      • Total Post: 9
      Points: 61
      Newbie 2

      Debt is always a stress or a burden which haunts a human being.Due to certain circumstances it may not be possible to start a business without borrowing money,but it is possible to make a sincere effort to cover the existing debt with the operational efficiency of the business.

      Then,once all the debt is covered you can start afresh and make sure that there arises no possibility wherein you become a borrower.

      In order to become debt-free you need to improve the efficiency of revenue generating processes,reduce operating expenses etc.

      Unfortunately in a difficult economy, too much reliance on debt has become a way of life for many businesses.So,let us take a sicere effort to be debt-free and stress-free in life.

    • #5343
      Avatar of Matthew KingMatthew King
      • Total Post: 177
      Points: 2,320
      Business Consultant 3

      One of the ways I have experienced to combat this is to start putting away money immediately, set a goal or a % of how much will go into savings as you are starting off for both tax purposes and misc and unexpected expenses within the business.

    • #5353
      Avatar of DieterDieter
      • Total Post: 4
      Points: 30
      Newbie 4

      Well as you wrote it is true that no business can start from scratch dept free since registration of the business and other fees might implicate that you need to put money into a company which has no funds. But if you would seek first for a job, take a pre-payment on your order which you use to establish the business and then pay all the registration and fees, would this mean dept free?

      Offering service is easy, besides registration fees you might not have any costs. How about trading? Well if you want to buy goods which you resell you initial require money to do so. Where would the money come from to purchase all your good for trade?

      What I want to say, on startup, it requires someone to put money on the table and make it run. Also if you are special in trading it requires much more funds than any service based company. Do you agree?

    • #5370
      Avatar of Matthew KingMatthew King
      • Total Post: 177
      Points: 2,320
      Business Consultant 5

      Yes, I do agree. If money is attained by getting a job then getting an advance on that paycheck. You are normally still required to work those hours. If you don’t, you will have to repay it. So I believe that still makes it a debt even though it is “time”. I do think this is a good idea though if the place you work allows that.

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