Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Business » Entrepreneurs » Article
 

Build a Business with Other People's Money




By Matthew Gause

We've all heard the saying "it takes money to make money". But the saying doesn't mention whose money it has to be. This money can come from hundreds of places. This article will deal with using credit cards to build your business without using any of your own cash.

In the past there have only been a few ways to acquire money to start a business: friends and family, traditional banks, and venture capitalists. For most of us, all three options are out of the question. So what do we do? Should we put our dreams on hold for another five to ten years hoping that one of those will work out for us? Unfortunately, that's exactly what a lot of budding entrepreneurs do. It seems odd that these entrepreneurs can be so creative in every way, except with their financing. It's time to think outside the box and take your dreams off the shelf. Use Other People's Money (OPM) and get started today.

Credit card companies have become very competitive in the last five years. When they compete you win. They've created a whole new way to start a business without using any of your own cash. You can leverage their money for a short amount of time to start your business. Imagine walking into a bank and telling them that you want an 18 month, interest free loan, for a startup business. Don't forget to tell them that you don't have a formal business plan and, the loan must be unsecured. These kinds of borrowing conditions are common and credit card companies are knocking your door down to give them to you.

If you have good credit you can 'float' the cost of your business for a number of months. 'Floating' is the process of transferring the payments or complete balance between zero interest credit cards. In essence you are buying interest free time to build your business. For example let's say George leverages $10,000 to start a business. In 30 days the minimum payment is due. He has two options: one he can transfer the minimum payment to his second card, or two he can transfer the entire balance to the second card. In this way he has created 30 more days of interest free time to build his business. He is using the credit card company's money and not his own to build his business.

For some people the idea of using credit cards to build a business seems counterintuitive. There are a number of reasons why they might think this. For starters, credit cards are easily abused and carry negative connotations. Most people use their cards to purchase vacations, home improvements, big screen TVs, and other consumer items. None of these items will make them money and are considered consumer debt. On the other hand there is business debt. Two key differences between business and consumer debt is that business debt is short term and has the potential to make a return. If using credit cards to finance a business seems counterintuitive that's because business debt is being confused with consumer debt.

A word of warning with using credit cards as an OPM strategy. Treat the money you spend with your credit cards as you would your own money. Always remember that your business's customers are the ultimate source of income. Credit cards should never be used to buy things that aren't going to make money. Purchasing new office furniture, computers, and flashy cars too early can ruin your business's development. Those things should be bought with revenue from your business, not with precious start-up money. Using your credit cards as a financing tool is one way to use other people's money to get your business off the ground. Like any tool, it comes with its pros and cons so judge carefully. Whatever your decision, don't allow fear to step in the way of your dreams to build your own business.
 
 
About the Author
Matthew Gause holds an MBA from Utah State University and is the owner of http://findthebestcreditcards.com. Matthew lives in Orem,Utah with his wife and two daughters. Read more articles like http://findthebestcreditcards.com/Free-Credit-Report-Without-Credit-Card/ and http://findthebestcreditcards.com/Credit_Card_Gas_Rebate/

Article Source: http://www.simplysearch4it.com/article/35533.html
 
If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/35533.html" as shown above and make it hyperlinked.



  Some other articles by Matthew Gause
Five Credit Mistakes Made By Rookies
More and more credit is becoming a bigger part of our lives. Your credit score can affect your quality of life. The car you drive, what house you live in, and the jobs you get can all ...

  
  Recent Articles
Money - Go For It
by Alwyn Beikoff

The Man In The Pink Pig Hat
by Michael Wooller

Don't Just Stand There, 8 Steps to Make Things Happen
by Beth Schneider

Be an Entrepreneur: How to Start a Healthcare/Medical Recruiting Firm or Nursing Agency
by Dave Carter

What are You Doing to Give Your Business Immortality?
by Yvonne Weld

Expert Envy
by Susan Friedmann, CSP

When To Sell...And When Not To Sell
by Rohn Engh

5 myths about entrepreneur
by Joe Lee

Choosing a Good Point of Sale System
by David Overholser

Allowing Yourself to Fail Toward Success
by Anne Marie Baugh - Publicist

Quick Logistic Tips for correct delivery process of goods
by Ken Kruger

Essential Entrepreneurial Skills that Propel your Business to Success.
by Kanaga Siva

Three Big Lessons of My First Year in Business as a Women
by Roshini Rajkumar

Wanted: 100 Referral Partners
by C.J. Hayden, MCC

Outsourcing: Through The Eyes Of The Pro-active Person
by Dale Robert

The First Step Of A Thousand To Freedom
by Nicholas Dixon

Casualness in Modern Office Furniture
by Sarika Kabra