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How much capital do I need before I can start a new business?

Hi, I feel like I've been overly cautious all these years. In the mean time, I see people starting businesses all the time with little captial resources. Am I being too conservative?

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Answers (2)
Andrew Cagnetta
Transworld Business Brokers, LLC.
Premium Broker

Ken is right. Most people plan properly for the business cash flow in the beginning. The mistake is they underestimate their own living expenses during the ramp up period. My story was I lived with family during my start up period....I knew there would always be food on the table.

Mar 18, 2009
Ken Gaebler
Gaebler Ventures LLC
free resources for entrepreneurs
Cook County, IL

Melissa, it really depends on what sort of business you are starting. Some amazing businesses have been started with $3,000 or less, but that's not typical. You also have to factor in whether you are reducing your income to start a business. It's not cash out of pocket but it's an investment nonetheless. A general rule of thumb for starting a business is that you should have six months worth of income in savings in order to withstand a scenario in which cash flow does not materialize as quickly as you had hoped.

Mar 17, 2009

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