How to become self-employed | How to get the funds required ?
How to become self-employed | How to get the funds required ? The word “employment” has a non-erasable value in the mind of the individuals. Employment is of two types- working under control of someone else or self-employment. When you are operating under the control of someone, one thing is assured is monthly salary towards services done.
When you are self- employed, you earn income for not only yourself but also will be supporting other employees working under you. Self-employment is a good idea but requires a lot of courage and determination to proceed further. Once you progressed further, you should never take the step behind.
Self-employment is nothing but doing business. Usually, any person who starts the company under the idea of self-employment starts it on a small scale and slowly develops into a significant scale.
How to become self-employed ? Requirements for staring a new business –
- Idea: The world is full of resources. All you need to do is search for the source to give you support. You need to decide what exactly you want to do or instead in which product you want to concentrate. And then accordingly take the initiative. For example, a grocery shop or vegetable shop or a mobile phone shop.
- Legal registrations: Certain legal certifications are necessary to avoid unnecessary legal obligations. Shop registrations are essential to avail any schemes issued by the government.
- Legal permissions: If you are dealing with business related to food items, the permission letter from a health department is very important because you will be liable to punishment if anyone consuming the food prepared by you gets ill and puts a case on you.
- Funds: Well, to be frank, this is the most crucial requirement. Once you have the sufficient funds in your hands, only then you can go further and start up your business. Not just business, but you should also be proficient in managing your funds, and better management will always save you from problems. How to raise funds is discussed in a later stage. Also, some of points mentioned on another post – Sources of Finance for a Business
- Business plan: When you have an idea to start a new business, make a perfect business plan stating about the product, what are your sources of income, what is the profit you will be earning through this business, what is the benefit to the society, how many employments are you planning to give? Etc. A perfect business plan or proposal is always required as it guides you whenever you feel you have lost track of activities. Not only that, when you approach a lender or a bank for a loan, then the first they ask you about is “Where is the business plan or proposal”? Only after they are satisfied with the content, they will release the funds.
- Check for competitors: Even before you start a business, you should have an eye for competitors. Only when you know about your competitors, you will strategize your plans to improve your business. Even before the business starts, if you do this exercise, it saves times, and energy.
More than everything, what is required is your self-confidence to do things, without which everything else goes waste. How to become self-employed | How to get the funds required ?
How to get the funds required ? Methods of raising funds –
As you are planning to do a self-employed business, the funds required will be comparatively less. But since you are starting from the beginning you may have to raise funds to start up your business. Following are some of the methods which may be help to you in your attempts to raise the funds.
- Self- Capital: When you have any ancestral property or your parents, brothers or sisters are in an excellent position to help you, try taking their help. Ensure you repay the loan amount without fail, because sometimes monetary transactions may lead to disturbance in personal relations. Even if you have your savings from your previous earnings, even that amount can be used as startup capital. It is the firm belief of many that making use of personal money is best than borrowing or raising funds. Only when you don’t have your savings, then you should opt to go to a lender.
- Friends: You close friend circle may be of help to you. Tell them your proposal and request them for financial support. In case they are in a position to help you, they will help you.
- Relatives: How many relatives will come forward to help is a question of doubt? But you don’t lose anything if you request funds from your known relatives.
- Lenders: Make lenders as your last option. Taking a loan from lenders and starting a business is a good start but ensure you repay the loan amount within due date because the loan taken from a lender will carry the interest tag along with it. If you don’t manage the funds appropriately and repay it in time, you may land up in paying an amount of interests more than the principal amount. The loan amount taken from a lender is called debt and if you are paying more interest than the interest amount will add to your debt. A deficit in a business is a small matter, but if it is not paid in time, it starts worsening the situation.
- Government schemes: There are some governments who try to support the individuals who want to do business under self-employment schemes. In such schemes, the businessman will get some subsidies in specific areas. Availing these can be a benefit to you. So always look out for such schemes and avail them.
- Franchisee option: When a franchise option is considered, two goals are achieved, the desire for self -employment and the source of funding. When you opt to start a franchise option, you are your boss and have full right on whatever you earn. You may have to pay the franchisor some legal fees for using his name and technology. Secondly, the franchisor gives the funding to start up the franchisee shop. So the funding problem is solved. Moreover, the franchisor will support you until you are settled because any damage on your part will damage his brand name also and the franchisor is very concerned about his brand name. Usually, a franchise can be taken for food items, mobiles phones, etc.
A piece of advice, start a business on a small level and improve it with your talent on a significant scale.
How to become self-employed | How to get the funds required ?