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Internet Marketing - is it worth getting into debt for?

by Peter Bestel
38 replies
I had an interesting discussion a while back with a friend. We were talking about various business opportunities and their likely start-up costs. Whilst we both agreed that, in an ideal world, you would fund a new venture with savings and own capital etc, there were instances were approaching a finance company to cover any shortfall would probably be necessary. In fact, if you didn't have the faith enough in your venture to go into debt, then maybe you didn't believe in your business enough.

Has anyone ever resorted to 'going to the bank' for start-up or expansion funds for an Internet Marketing business? I can't recall anyone ever mentioning it (understandable, I suppose) but I also can't recall any business sector, of any kind, that didn't have a proportion of externally funded start-ups.

Is IM unique? Can you really, always, start from a standing start all on your own?

Peter
#debt #internet #marketing #worth
  • Profile picture of the author Kevin Riley
    Originally Posted by Peter Bestel View Post

    I had an interesting discussion a while back with a friend. We were talking about various business opportunities and their likely start-up costs. Whilst we both agreed that, in an ideal world, you would fund a new venture with savings and own capital etc, there were instances were approaching a finance company to cover any shortfall would probably be necessary. In fact, if you didn't have the faith enough in your venture to go into debt, then maybe you didn't believe in your business enough.

    Has anyone ever resorted to 'going to the bank' for start-up or expansion funds for an Internet Marketing business? I can't recall anyone ever mentioning it (understandable, I suppose) but I also can't recall any business sector, of any kind, that didn't have a proportion of externally funded start-ups.

    Is IM unique? Can you really, always, start from a standing start all on your own?

    Peter
    Peter

    Good to see this, because I often wonder at the mentality of those who go into IM - and try to do everything for free or on a shoestring. Yes, you can shoestring it - at times - but, with money you can fastrack your business.

    I'm used to getting major loans to start my offline businesses. That's part of business. And yet, I've heard people complaining about having to spend a hundred bucks online. To me, that kind of penny-pinching just doesn't make sense.
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    • Profile picture of the author Johnathan
      Originally Posted by Kevin Riley View Post

      Peter

      Good to see this, because I often wonder at the mentality of those who go into IM - and try to do everything for free or on a shoestring. Yes, you can shoestring it - at times - but, with money you can fastrack your business.

      I'm used to getting major loans to start my offline businesses. That's part of business. And yet, I've heard people complaining about having to spend a hundred bucks online. To me, that kind of penny-pinching just doesn't make sense.
      The penny pinching mentality I think stems from when people are struggling to meet their basic needs. If they are worrying about paying for food, covering their rent expense, etc, (i.e., maxed out/living paycheque to paycheque), then $100 is a lot of money.

      It's only when you realize you have food, you have shelter, you have a car -- and then realize you don't really need to go to the movies or buy that expensive dinner -- when $100 isn't all that much. But you have to get to that level first.
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      • Profile picture of the author Kevin Riley
        Originally Posted by Johnathan View Post

        The penny pinching mentality I think stems from when people are struggling to meet their basic needs. If they are worrying about paying for food, covering their rent expense, etc, (i.e., maxed out/living paycheque to paycheque), then $100 is a lot of money.

        It's only when you realize you have food, you have shelter, you have a car -- and then realize you don't really need to go to the movies or buy that expensive dinner -- when $100 isn't all that much. But you have to get to that level first.
        Flawed thinking. It's when you can't afford things that you really should be spending your money on building your business - even if it means incurring some debt. I built one of my early businesses in 1982. It was not a good time in Canada then. We didn't have much extra cash. I borrowed $25,000 on some property and used it to start my business. Without putting up cash, I would have been sitting around like all the other unemployed at the time.

        As for those "basic" needs like rent or mortgage, since I still live quite modestly, I can't understand the "need" for a house that could hold three families. Yet, I see a lot of people struggling financially while paying massive payments on a ridiculously large residence. That one makes me shake my head.

        PS: Fortunately, with an online business there is no need to borrow $25,000. But, if you need a few hundred to get a certain course or some application (after careful consideration), why would you not borrow that money?
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        • Profile picture of the author Matt Bard
          Originally Posted by Kevin Riley View Post

          Without putting up cash, I would have been sitting around like all the other unemployed at the time.
          Kevin, I agree with you there. It's hard for some to see the logic in this but you are exactly right.

          Right now is when business owners should be kicking their advertising up to higher levels.

          Just because people have slowed down their buying doesn't mean you wait around and pray that you can hang in there until they start buying again.

          You have to take action. You can sink or swim. It's time to start swimming.
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          • Profile picture of the author Kevin Riley
            Originally Posted by Matthew Maiden View Post


            Right now is when business owners should be kicking their advertising up to higher levels.
            Case in point. In 1982, there was a window company near my business. Construction had gone soft, and most construction-related companies had cut back. But this company started aggressively advertising and got more reps. They soon dominated and when the economy came back later, they were in a good position to make big profits.
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        • Profile picture of the author Johnathan
          Originally Posted by Kevin Riley View Post

          Flawed thinking. It's when you can't afford things that you really should be spending your money on building your business - even if it means incurring some debt. I built one of my early businesses in 1982. It was not a good time in Canada then. We didn't have much extra cash. I borrowed $25,000 on some property and used it to start my business. Without putting up cash, I would have been sitting around like all the other unemployed at the time.

          As for those "basic" needs like rent or mortgage, since I still live quite modestly, I can't understand the "need" for a house that could hold three families. Yet, I see a lot of people struggling financially while paying massive payments on a ridiculously large residence. That one makes me shake my head.

          PS: Fortunately, with an online business there is no need to borrow $25,000. But, if you need a few hundred to get a certain course or some application (after careful consideration), why would you not borrow that money?
          Actually, it`s not flawed thinking if you are in those circumstances. That is how most people think in that type of situation.

          Have you ever been in the situation where you have creditors breathing down your back, receiving tax eviction notices (your house will be sold because of unpaid past due taxes), and have the heat turned off because you haven't paid the bills? If you are in that those types of circumstances, the last thing you want to think about it taking on more debt.

          From the sounds of it, it sounds like you already did have "equity" if you were borrowing against a property. (I.e., it is not like you had $0 in the bank account). If you did only have net equity of a few hundred $$$, then it sounds like you are a bit of a risk taker, but most people are uncomfortable with taking that kind of risk. (Also, I'm assuming you had a fairly solid business plan too, because the bank wouldn't lend that amount otherwise).
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          • Profile picture of the author dang
            I wouldn't take a risk to fall in debt to cover my network marketing costs. Even if the income potential is huge it may take some time to earn it and offset the costs. On the other hand, the business started off aggressively on big budget can get profitable faster.
            However this is a risk i wouldn't rather take.

            Regards
            Dan
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    • Profile picture of the author Keith Boisvert
      I think that there are aspects of the IM arena that can be almost 0 startup costs. For example, a free blog selling products as an affiliate can yield cash, which in turn can be then sunk into the business. Essentially the business supports itself and grows off of its own revenue.

      However, having owned multiple offline businesses, I am in the mindset of spending money upfront to establish a business,doing it right from the start. I am not afraid to put up capital to jumpstart a business. Some require a substancial amount of cash injected at inception, while others require nothing more than some education material, a website, hosting, and possibly design fees(if applicable).

      I would have a hard time going to the bank looking for $$ for an internet business, but not because of my lack of faith in my plan, but in their lack of understanding. Of course right now is not the best time to go get a loan anyway

      You bring up a good point and I think that it does take money to make money. The IM field takes less startup of course, which makes it much more attractive, and as stated, that cash can come from the business profits when starting on a shoestring.

      keith
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      • Profile picture of the author Peter Bestel
        It's funny actually, for the past three years we've been debt free - not owed a single penny to anyone either personally or with the business. An absolutely wonderful feeling.

        We don't 'need' to borrow any money for the business just at the moment but I know we might do in the future and because of the way I'm feeling just now and at the risk of contradicting my OP, I might be hesitant to get a loan. This is despite having loans for previous businesses and seeing them as just par for the course.

        Kevin's right - it does come down to the right mentality. Heaven knows I'm aware that penny-pinching will get us nowhere, but I don't know if I'm ready to owe anything to anyone just yet.

        Thankfully it's not a dilemma that I'm facing just now.

        Peter
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      • Profile picture of the author DavidO
        I went into IM under the worst possible consequences: after taking a soaking with an offline business. So I was really tight-fisted the first couple years and did almost everything myself. I've learned graphics, website design and copywriting, which is great, but now I'm learning to outsource more and more and this really pays off.

        If I had to do it again I'd put in the necessary start up funds right from the start and take it easier on myself. Even in Im you can spend a lot of money on consultation, PPC, good copywriting, etc. My current business would cost me $25,000 if I had to do it over again right now.

        So the answer is, yes. Spend or borrow the money for your business if you really believe in it. If you don't have the money it can still be done, but you'll have to work real hard at it like I did.
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  • Profile picture of the author Loren Woirhaye
    It's really much harder to "bootstrap" any business without
    capital. I've borrowed capital for my business ventures many
    times and I recommend it.

    Lots of people are just "trying out" internet marketing. They
    seldom make much money, nor are they often seriously committed.

    I hear from people all the time "I love you stuff but I just can't
    get the money together" - and this reflects flawed thinking usually
    because these people are not thinking of it like a business where
    you commit and borrow and run it like a real business.
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  • Profile picture of the author Johnathan
    Actually, if you are doing this correctly, the startup costs are virtually minimal. I.e., $20 U.S. gets you a domain and one month of hosting.

    If you purchase a few other add-on tools, (depending on what your business focus is, whether you are writing articles, selling websites, being an affiliate marketer, etc), it would probably maximum be $20-$200... So if you are going in 'debt' to spend $200, then you should probably get a job first.

    The only instance I would say you could (temporarily) get into 'bigger' time debt (again, not *that* much relatively speaking) would be maybe $1-2K if you started outsourcing. But then if you are going to outsource, you should make sure you either understand the business (in which case you would have done step #1 above), or have management experience so you can handle it.

    The *stupid* way of getting into debt would be to purchase a bunch of big ticket seminars, i.e., $2k here, $2k there. Although they may very well be packed full of useful information, if this business is new to you, you don't have the connections, and you don't have the experience to execute what you learn, so it would be a waste of money. If that is what you are asking, then yes, it would be pointless to go into debt for that reason.
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  • Profile picture of the author John Taylor
    Just like any other business, you need to give
    serious thought to how you will fund the start
    up and, more importantly, your cash flow.

    The start up costs for an internet based business
    can be significantly lower than the cost of setting
    up a bricks and mortar based business. However,
    there's no guarantee of success and online
    businesses are much easier to clone/copy/replicate
    by a determined competitor.

    When it boils down to it, it's all about risk and reward.

    I personally wouldn't get into debt to fund my business
    unless I was sure of the potential for generating short
    term profits to satisfy the debt quickly.

    I would also think about the consequences and how I
    would deal with the debt should the business fail to
    achieve sufficient profit to cover the loan repayment.

    John
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  • Profile picture of the author Michael Oksa
    Originally Posted by Peter Bestel View Post

    I had an interesting discussion a while back with a friend. We were talking about various business opportunities and their likely start-up costs. Whilst we both agreed that, in an ideal world, you would fund a new venture with savings and own capital etc, there were instances were approaching a finance company to cover any shortfall would probably be necessary. In fact, if you didn't have the faith enough in your venture to go into debt, then maybe you didn't believe in your business enough.

    Has anyone ever resorted to 'going to the bank' for start-up or expansion funds for an Internet Marketing business? I can't recall anyone ever mentioning it (understandable, I suppose) but I also can't recall any business sector, of any kind, that didn't have a proportion of externally funded start-ups.

    Is IM unique? Can you really, always, start from a standing start all on your own?

    Peter
    Of course not, it's a loaded question, there is no "always".

    Anyway, I get the gist of what you're saying.

    Is it possible to get started with $0? Yes!

    Is it a good idea to borrow money to start a business? Probably.

    An online business? Maybe, but...

    Only if you're treating it like a real business. If someone has a written business plan (a plan, not a few scribbled ideas and vague goals like, "make money online"), then that shows the right mindset and borrowing may make sense.

    However, that same business plan - if well thought out - may start at $0 and build from there.

    As others have mentioned, it's really about mindset, and if it will be treated like a real business. Borrowing is okay, but only if it is justified and necessary.

    All the best,
    Michael
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    • Profile picture of the author keyaziz
      Originally Posted by Michael Oksa View Post

      Of course not, it's a loaded question, there is no "always".

      Anyway, I get the gist of what you're saying.

      Is it possible to get started with $0? Yes!

      Is it a good idea to borrow money to start a business? Probably.

      An online business? Maybe, but...

      Only if you're treating it like a real business. If someone has a written business plan (a plan, not a few scribbled ideas and vague goals like, "make money online"), then that shows the right mindset and borrowing may make sense.

      However, that same business plan - if well thought out - may start at $0 and build from there.

      As others have mentioned, it's really about mindset, and if it will be treated like a real business. Borrowing is okay, but only if it is justified and necessary.

      All the best,
      Michael


      I agree.

      I think an online business is almost seen as something entirely different to an offline one..but I think if you are serious about making it work for you online then you should treat it with the same seriousness and dedication you would if you were starting up an offline business like a restaurant.

      The good thing though about an online business is that your costs will be substantially lower so getting a loan will not be a big deal imo. We chose this route because we can't do everything and we want our business online to be professional. We are just implementing and starting to work with people to improve on what we already have...and are very glad and confident in what we will be achieving in the near future.

      A business plan is also crucial - its a lot of work but well worth it and also shows your dedication as well as making you really think about competitors, strategies and goals.

      It depends what you want to do online though. If you are working on one particular niche I think it would work extremely well - but some people don't do that though.
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    • Profile picture of the author darryl-thomas
      Originally Posted by Michael Oksa View Post


      Only if you're treating it like a real business. If someone has a written business plan (a plan, not a few scribbled ideas and vague goals like, "make money online"), then that shows the right mindset and borrowing may make sense.
      took the words right outta my mouth (..or fingertips)
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  • Profile picture of the author Floyd Fisher
    I'm very leery of telling people it's ok to go into debt.

    The problem with that line of thinking is simple: There are just too many scams telling people 'it takes money to make money', and people get burnt that way.

    I've seen people put their kids college money into things like ASD cash generator, old ladies 'invest' in storesonline with their retirement savings, watched friends nearly destroy themselves trying to get their equinox mlm business off the ground, and keep reading about people here who keep blowing money on the latest and greatest course and end up in deep dodo doing so.

    If you've proven your business works, and want to borrow money to take it to the next level (and can reasonably be expected to repay the money), then yes it's ok to borrow money. If you're just starting out, you need to prove you have a viable business model before even thinking about borrowing money.

    Before launching franchises worldwide, McDonalds opened up one franchise in Iowa to test the conecpt for viability.

    Before GM rolls out a car model, they build a single prototype for testing to work out any potential issues the car may have.

    If the big boys do this, don't you think it's wise to do the same thing?
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  • Profile picture of the author JonathanRudd
    I don't know is it worth getting into debt for or is just hype? That's a good topic question and I am glad that I thought of it.
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  • Profile picture of the author Mike Hersh
    No...No...and no....

    Why should you get in debt when you can earn the amount you need without putting to much effort into it?

    I would never risk my family for any amount in the world.

    Think about it for a minute and you'll see I'm right
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    • Profile picture of the author Peter Bestel
      Originally Posted by Mike Hersh View Post

      No...No...and no....

      Why should you get in debt when you can earn the amount you need without putting to much effort into it?

      I would never risk my family for any amount in the world.

      Think about it for a minute and you'll see I'm right
      Thought about it Mike and... nope, I don't see that you're right.

      You're entitled to your opinion and mindset, but the comment I've highlighted is unnecessarily emotive. No-one's going to die if you get into debt, if you're sensible about it. (Of course, you could borrow from the Corleone family and miss a payment and then we'd be talking about a horse's head in the bed, but let's keep it real)

      You should never risk more than you're prepared to lose. You make sensible business decisions based on likely returns and if you have to put up collateral then, again, you only put up what you're prepared to lose.

      As far as I can remember, last time I applied for a business loan, I didn't have to agree to hand over my family should I default.

      Peter
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  • Profile picture of the author Adrianne_
    Going into the debt can mean a lot of things....

    For people who treat their home biz like a real biz, then it's quite natural to incur a few expenses such as monthly maintenance fees, product purchases, and advertising cost. If we're not careful, we can easily dig a hole so deep that we can't dig ourselves out of.

    People need to decide BEFORE starting a biz what they can comfortably charge each month if they use a credit card, for example, and also decide how long they are willing to continue to charge this amount even if they do not turn a profit. Can you charge $400 a month for one year and still be able to make the minimum payments along the way? If not, then going into this much debt is not a good idea.

    For those who have the means to repay what they borrow, then I say go for it but make sure you spend the money in the most efficient manner that will give you the best return on your investment. This can be done by hiring a professional marketing rep to take care of your ad campaign and maybe a web designer who can build and optimize a site for the products/services you plan to promote.
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  • Profile picture of the author Matt Bard
    Obviously one could start with nothing and start making money online.
    There are free sites, auto-responders, PLR, ways to get free traffic and so on.

    If you already know what you're doing, have a business plan, specific goals, know how to advertise using PPC for instance, then you can consider spending cash to give you a big leap.

    On the other hand, the reason it takes start-up capital in the offline world is that nobody gives you a building for free lease with all of the inventory necessary to start a hardware store so you can experiment at being a business owner.

    I think where most people that come online and want to start a "business" fail is that they have no offline business experience and therefore do not realize the amount of money that goes back into the business in order to grow.

    I see people here report that they made $100 and then never consider re-investing it now that they have an idea of what to spend it on.

    Business is a numbers game. Your income has to be more than your outlay with room to grow otherwise you're just going in circles.

    But to answer your question of going into debt for an online business, my answer would be no.
    I don't see the equity here like I would if I had a hardware store full of inventory.

    I don't see how I would get anything back from a failed Internet business.
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  • Profile picture of the author theinfomaven
    Here's the test: IF you can't launch a consistently successful internet business (enough to pay your bills) for $100-$300, you're NOTready to go into debt for it.



    Details:

    If you are just starting out and completely clueless, do not go into massive amounts of debt thinking that it's a sure thing and you're going to get rich.

    There has been an influx of silent sufferers who quit their jobs, sleep on couches, and run up credit cards thinking they are headed to the promised land. Don't be that guy.

    You can't completely buy your way forward in business.

    You still need to have some kind of active hand in running it, and knowing what the hell you are doing.

    One part time paycheck from a fast food joint can be enough to fund an IM business if you take the time to learn.

    Too many newbies get into the trap of buying anything that promises quick wealth.

    What you need to do is investigate what works FOR YOU and STICK TO IT.

    TAKE YOUR TIME.

    If you're lazy, hire people and *carefully* spend money on advertising.

    If you're creative, skip the "im" niche and go for things like t-shirts, video games, metacafe videos, web design, etc...

    And for god's sakes, learn good salesmanship. It's not evil, it's just a form of communication.
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  • Profile picture of the author jace
    I think what you have to spend to start has a lot to do with your skills level. You can save yourself a load of money if you know how to do things yourself. If you can do that you can start with very low costs. This is A real learning curve though.
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  • Profile picture of the author davebo
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    • Profile picture of the author jan roos
      Originally Posted by davebo View Post

      The way I see it, just because you're practically required to borrow to start an offline business, doesn't mean you should adopt that mindset for an online one. There's a reason most offline businesses fail.

      Online, in my view, if you don't have the education you'll end up pissing money away left, right, and center. Actually NOT spending much money is better for you at the beginning. The important thing is making sure when you do make $100 your first month that you reinvest that back into the business. I'm pretty much convinced that if i gave a newbie $10k to start a business they would probably piss the money away.

      I started my business online with $300. Now I run websites that do well over $1MM in sales, I import products from China by the container, I carry large amounts of inventory, have no debt, and I have 6 figure balances. And that all happened from that $300 and reinvesting practically all my profits for 18 months.

      Could I have gotten there quicker by borrowing? Possibly. But I don't think having the access to credit would've magically made me a smarter business man.
      Nice post. Congrats on your success.

      Cheers
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  • Profile picture of the author ramonica
    Making a loan is not the worst thing, if you are commited and know exactly what you are doing you might also make profits and pay the loan back..

    The worst thing is when your offline business goes bankrupt, and you lose all you have invested like work and everything, and the creditors start chasing you to get their money back..

    This is my situation, unfortunately since 2 months....I tried to make some money fast with affiliate marketing, I've written articles and submitted them to e-zines, I did some work and guess.. not even one buck..sad..

    Now I work on a project.Yes it takes time, there are many online free resources, but you still need a small capital...

    I wish you luck guys, and I wish me luck too..
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    • Profile picture of the author ShayB
      I, personally, think that taking on a large amount of debt to fund an IM biz is a bad idea, and here is why:
      • If you are totally new to IM, you won't know enough to invest what you borrow effectively, so the potential ROI is risky.
      • If you know enough to invest the money you borrow effectively, then you should know enough to make money without investing a lot of money first.
      • If you are not a newbie, then you would know how to take $100 or $1000 and invest it in your IM biz and make money. On the other hand, if you can take $100 or $1000 and make money, then you shouldn't need to take out the loan.
      If you can take out a loan and then get a quick ROI, I don't see the harm. I only see an issue if you take out a loan with no plan and no experience.

      Also, you need to be able you can make the loan payments without needing income from your IM biz - that first payment will be due before you know it! :rolleyes:

      JMHO
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  • Profile picture of the author YseUp
    In a similar vein, what do you guys think of saving up money, then quitting your job to dedicate yourself t IM full time.

    I'm thinking of leaving my job in the Autumn. I'll have enough money to survive for a year on 0 income and could dedicate 8 hours a day to IM.

    I'm going to make sure I'm earning money by then though (8 months to go)
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  • Profile picture of the author rlnorthcutt
    Whats your skill level with IM?

    If you know what you are doing, then a business loan (or even credit cards) are an INVESTMENT... ie. you have a reasonable expectation of return and you can estimate the risk.

    If you are NEW or don't know what you are doing... I wouldn't recommend any debt. That is GAMBLING... not investing.
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  • Profile picture of the author JonathanRudd
    Truth be told people, if you think you are going to join a FREE program and your upline/sponsor promises to do the work for you and that you will make huge money then you are sadly mistaken and honestly I would not want you in my business. Being honest, that upline doesn't want you really because he/she is just using a marketing ploy to get you in their business. The philosophy is this, attract everyone and then work with the ones that mean business. Hopefully by doing that, the other slackers/look-i-lues will join the ranks of the paid and then we help them too.

    Nobody is going to build your business for you for free without a catch. There is some form of financial risk in EVERY business. You do need to be ready to handle it. I was turned down from possible business opportunities because my then wife, would not get behind me. All I asked for her to do was sit in with me and my mentor so she can see what I am getting into and then we can discuss afterwards to see if we want to risk doing business or look elsewhere.

    My mentor told me that if she is not willing to stand by you now, how will she stand by you then when money is leaving the nest egg to build a business? She needs to be aware upfront that there is monthly expenses to run a successful business. It's not a hobby but a business.

    To answer your question, if you don't feel that a business is not worth getting into some debt for (to make possible returns in the future), then why are you in it? Get out and find something else or risk just have a hobby hoping for a miracle. Break away from the ghetto-poor-mans mentality. (I think that will be my next book).
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    • Profile picture of the author underdogaffiliate
      I personally think it's worth getting into debt for if:

      • You are currently making money online and looking to scale-up your business
      • You really know what you are doing and you know what to use the extra cash for
      • Taking the burden of business debt will only motivate you to work harder and smarter
      I don't think it's advisable to borrow money if:
      • You just got started and still haven't got a clue of what to do online
      • You have not made a single cents online
      • You are borrowing money to buy an e-book, course, or to attend a seminar - If you don't have money, don't buy them.
      Cheers
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    • Profile picture of the author Kay King
      Taking on debt and going into debt are not the same thing.

      New marketers with business, sales and marketing experience offline can do well quickly on line with a solid plan of action - taking on some debt makes sense for them.

      If you know what you are going to do and how to do it - taking on debt can shorten the time needed to profit.

      The average new marketer is more likely to whip out the credit card for the newest launch or high-buzz product and then find himself with hundreds or thousands of dollars of debt with no way to pay it.

      If you can't find $50 a month in your personal budget to spend on starting online - debt is high risk.

      kay
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      • Profile picture of the author JonathanRudd
        Originally Posted by Kay King View Post

        Taking on debt and going into debt are not the same thing.

        New marketers with business, sales and marketing experience offline can do well quickly on line with a solid plan of action - taking on some debt makes sense for them.

        If you know what you are going to do and how to do it - taking on debt can shorten the time needed to profit.

        The average new marketer is more likely to whip out the credit card for the newest launch or high-buzz product and then find himself with hundreds or thousands of dollars of debt with no way to pay it.

        If you can't find $50 a month in your personal budget to spend on starting online - debt is high risk.

        kay
        I agree 1,000 %. Entrepreneurs and Business Friends... just be smart with what you are getting involved with when it comes to business. I work for the Federal Government and we do with contracting. I remember taking a course about Cost Analysis. To summarize that course in a nutshell (and it took them 5 long days to teach this very informative, yet boring class) is this. When considering who to do business with, look at all that will make up the cost and not just the price.

        the price of the product may be only $500 or $50. The cost will be the $500 or $50 plus advertising, and all other hidden expenses (monthly fees if any, etc). Write it all down and really think it over and really evaluate what you can and can not sacrifice. And expect to make a return in a year's time. (it may and in most cases happen sooner, but plan for the longer return period. that way you are not caught by surprise.

        What happens is we are in a dire need for cash now. We get a so called, chance of a lifetime! get in now business and we jump in with our last $50 or whatever hoping a quick return.

        what happened? We have just fallen for a marketing ploy based on our desire and passion to get out of debt quickly without forecasting for he future. So now we are in a business and we need to make a return fast to show the wife or husband that I was not a fool for taking my last for this business opportunity. When it does not happen in the quick time we expect, we jump ship and say oh it was a scam. It could have been but then again if we were patient to plan and expect longer delay... we could have seen something different. Don't act on impulse alone.

        With that being said... I have an opportunity coming. It only costs $5 but you gotta act now... any takers?... Just joking!
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        • Profile picture of the author alex84
          It all depends on the situation. You can start a business online for nothing or spend a lot of money starting it. Let's say you decide to buy a website for 10k and that website makes 1,5k per month. Well you can take a loan for that and get into debt, but if you know what you're doing and have a plan, then it will be a good investment.

          You don't necessarily need to start your online business from scratch, you can buy it too. There are hundreds of people that don't start their offline business from scratch, they buy one. The same thing can be applied to buying your online business. So I think for that situation it is worth taking a loan. You just need to know what you're doing.
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  • Profile picture of the author Robert Puddy
    even if i had millions of spare money in the bank i would never use my own money to start a new business.

    It would always be done leveraging the banks money
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    • Profile picture of the author Peter Bestel
      Bob,
      Originally Posted by Robert Puddy View Post

      even if i had millions of spare money in the bank i would never use my own money to start a new business.

      It would always be done leveraging the banks money
      I'm actually surprised it's taken this long for someone to say that. I know many business folk that take this approach. I'll confess it's not within my current mindset but I can appreciate that it is eminently sensible - as long as it is still practical in the current climate.

      Peter
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  • Profile picture of the author dwshoup
    I see a lot of good responses on both sides of the fence on this post.

    Let me add my 2 cents worth.

    As was mentioned, you can start an Internet business with very little up front cost. That is the way to start any business. What I mean by that is this, do you start a brick and mortar business by purchasing the biggest building you can find to house your business?

    Of course not, you start at the bottom and build yourself up.

    If you can cover the expenses of a loan repayment without robbing Peter to pay Paul, then yes, you can fast track your start. What I read in the forum tells me that most starting out cannot do this.

    Have people recommended going into debt to start your business?

    Yes, I get calls all the time wanting me to enroll in a program that will take me to the next level. These courses run about 5k U.S. dollars and offer a personal mentor that will "teach me how to build a 7 figure business."

    This raises a question, if my personal mentor is qualified to show me how to build a 7 figure business, why is he working for the marketing whose name is on the course instead of building his own 7 figure business?

    In my opinion, if you are making enough off of your business that you are living comfortably off your business alone, and want to borrow money for a project you are developing to go to the next level then go for it.

    Otherwise, avoid the debt, take it slow and learn as you go.
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