How to Found a Startup on a Tight Budget in Your 20s
Most people aged under 30 don’t have a lot of cash to splash, and at a time when inflation is through the roof and interest rates are skyrocketing, starting a business as a youngster might seem unattainable as an option.
The good news is that there are paths forward if you’ve got an idea for a startup that has energized you, but you lack the budget to fund it out of your own pocket. Here are a handful of routes to consider if you’re in this situation and you want to become the next major business mogul.
Table of Contents
Apply for Student Loan Debt Relief if Possible
As an entrepreneur in your 20s, student loan debt can be a major roadblock when it comes to starting a business.
Fortunately, you may qualify for student loan debt relief programs that could help reduce the amount of money owed or even eliminate some of the associated interest payments. In turn, this could free up more cash, and give you additional funds to invest in your startup venture.
It is important to do your research in order to get student loan debt relief. You should also look into state-specific resources, as well as federal options that can provide support for entrepreneurs like yourself who have taken on significant amounts of student loan debt, but still want to pursue their dreams by launching a successful company.
Utilize Free or Low-Cost Resources to Get Started
As well as avoiding waste, minimizing startup costs is a key part of making your budget go further, and that means being on the lookout for resources that are either entirely free or come in at a competitive price point.
For instance, you may be able to access online courses and tutorials that can help you better understand the basics of launching and running a successful startup. Additionally, many libraries offer books, magazines, webinars, and other materials related to entrepreneurship at little or no cost.
You should also look into joining industry organizations, such as the Association for Small Business Development Centers (ASBDC), which provide members with access to tools like loan programs and mentorship opportunities that can help get your new company off the ground without breaking the bank.
In addition, there are often local small business incubators where entrepreneurs just like yourself can receive guidance from experienced professionals while developing their ideas in an environment that’s conducive to growth.
Research Tax Benefits and Incentives for Startups
Another solution for keeping your finances in check while launching your first startup is to research and leverage available tax benefits and incentives that are offered at both the federal and state levels.
Depending on where you live, there could be credits or deductions which could significantly reduce your overall costs. For example, entrepreneurs may qualify for Research & Development (R&D) Tax Credits if their company engages in any type of innovation or product development activities, such as prototyping new products or services.
Meanwhile, some states offer special incentive programs that allow businesses to receive reduced taxes when they establish operations within certain economic zones. Be sure to explore these options before making any major financial decisions related to founding your firm.
Explore Crowdfunding Platforms That Fit Your Business Model
It’s worth mentioning that crowdfunding platforms are an increasingly popular option for cash-strapped startups. Running these types of campaigns can be used to raise funds from both individuals and businesses that believe in your project or company.
Many crowdfunding sites also offer additional resources such as marketing tools, advice columns and access to networks which could help you get the word out about your business venture quickly, while minimizing associated costs.
Not all crowdfunding platforms will be suitable for every type of business model, so it is essential that you do research before committing yourself financially or emotionally. The same advice applies to any funding options you consider, so don’t rush in!