How much Startup Money for a Small Business? vs Cushion fund?

How much Startup Money for a Small Business? vs Cushion fund?


Have you ever thought of quitting your job and come out and do a startup, do a business, be an entrepreneur? So there is a very common question people always get asked about is that how much startup fund you need to come out, to do your business. Well the amount is depending on what type of business you’re doing, so I’m not going to talk about that because since every business will require different startup capital. But today we are going to talk about the cushion fund. So, other than the startup fund that you need, You’ll also need a cushion fund to – because you are not getting paid at least for the first few months in your business. Or you’re gonna pay yourself less. So you need a cushion fund just to live by before your business really takes off. Experts suggest that you have to have at least like nine months of your living expenses set aside before you come out to do business full-time. That is, if you’re single. But if you’re married, with children and you have some other commitments, So it’s better to have one year of your living expenses set aside, other than your startup fund. So what I suggest is that its not the absolute amount – because your situation is unique, you will have to come up with a number you are comfortable with. But what I suggest is that why not do your business on the side? Just to make sure that when you are doing, you are maximizing your out-of-office time, like you weekends, your nighttime, your lunchtime, when you’re not doing your active jobs, kind of work. You use that spare time to work on your business- on the side. So when your business can make maybe 50% of your active income, your salary, then you can be sure that if you put more effort in- and you are spending more time on the business you are going to make up the difference. So this is the thing that I will suggest, Work on the side, when you make 50% of the income that you are currently drawing from your salary then you can be sure that you’re comfortable to do it full time. I’m KC Lau, a financial educator so if you want to learn more money tips from me just go to my website KCLau.com, enter you details there- So that I can keep in touch with you. Bye-Bye.

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