Last week I wrote a post on How to get out of debt with a home based business.  In that post I talk about few different steps you will have to take to make that happen.  I also explained briefly that this is also a unique way to get out of debt.

When you think of all the ways their are to getting out of debt, from debt consoling to doing your own personal debt plan  setting up your own business to eliminate debt is kind of an odd way to achieve this goal.

So I figured  I should give you a few tips especially if you haven’t ever started your own business.  These tips are a few guidelines to follow when getting started.

1. Low Barrier Entree.  If you haven’t started a business before you may want start with something that doesn’t have much cost associated with it.  So starting a franchise or buying into a business is out of the question at this point.  Start with a low cost business and learn the ropes.  If you fail or make a mistake it won’t loose much.
2. Make it Part Time.  In most cases you will have a full time job when starting your first business and you don’t want to give up that job at least right away.  Instead hang onto that job for the constant flow of income till you have a steady and reliable income to actually go full time. 
3. Don’t Become Fully Dependent On Your Business Income.  Paying off debt with this income may be your goal but don’t become so dependent on it that you have to have it in order to survive.  If you’re creating new debt and becoming dependent on this income to pay off those debts you could have an issue.  For example if you start a business selling insurance and your income is dependent on you making a sale and you can’t make any sales one month then you may have problem. 
4. Put 50%-75% To Paying Off Debt And 25%-50% To Savings.  Don’t use everything you make to pay off your debt.  Save 25% to 50%.  This is the flip side of the coin to getting out of debt. Saving money will prevent you from falling back into debt.  This is a common mistake I see with people trying to get out of debt.  They have almost all of their debt paid off but no money saved or worse they use a portion of their 401k to pay off their debts. 
5. Get In Business With Mentors.  One thing I felt helped me more than any of the other tips was the fact that I had someone helping me the entire way.  When I got started in financial services I had people who had been in the business for years teaching me how to run a business of my own.  I had people that made modest incomes for $50,000 a year to over a million a year in income teaching me and mentoring me how run my financial business.  With mentors they will help you bypass a lot of the major obstacles and increase the learning curve to success. 

Now, you may be wondering which business opportunities will work the best with the above tips I have given you.  Over the next few weeks I will be going over a few business opportunities that you can check out that qualify. 

However if you think you know of a few business opportunities that fit into this category then please feel to leave a comment let me know about it.  I would love to take the time to review other possible opportunities and add them to the list.

Also if you haven’t done so sign up for my RSS to get the updates of which business opportunities work best and I will send you updates as I get them.

To getting debt free,

Chris

This post was recently featured on Carnival of Personal Finance #191 by Dollar Frugal.