ep 13 Starting a service-based business is one of the most exciting and affordable ventures you can take on. It’s a fantastic option, especially if you’re looking to launch a business without a huge upfront investment. The beauty of service-based businesses lies in the fact that you don’t have to worry about inventory, storage, or the complexities of product-based businesses. You simply provide a service, and that’s it!

But here’s the thing: You still need some capital to get started. You’ll need money for essentials like opening a business bank account, paying for business registration, and marketing your services. Fortunately, raising capital for your online service-based business doesn’t have to be overwhelming or complicated. In fact, there are two simple things you can do to raise the funds you need without relying on loans or investors.

Let’s dive into these two ways that can help you get your business off the ground without breaking the bank.

1. Collect Payments Upfront

When you’re just starting out, one of the best ways to raise capital for your business is by collecting payments upfront from your clients. You don’t need to wait for your clients to pay you later—get that payment in advance.

This was exactly what I did when I started my business as an international personal shopper. I didn’t have to worry about purchasing any inventory or having a bunch of products lying around. Instead, I simply created a PDF outlining my services and pricing, and when clients scheduled a shopping session, I made sure I collected payment upfront.

Collecting upfront payments means that you have the funds you need to deliver the service. This allows you to invest in the tools or resources needed to complete the job. For example, when I collected payment upfront, I was able to use that money to fund the necessary tools or cover any other business expenses that popped up.

If you can, aim to collect a percentage of the total payment upfront. For example, if you offer a service like coaching or consulting, you can ask for a deposit or the full amount upfront. This gives you the capital to start working and keeps you from scrambling to pay for things as you go along.

How to Make it Work for You

• If you offer a service that requires materials, like graphic design or writing services, use the upfront payment to buy the tools or software you need.
  
• When you’re working with clients on a project basis, be clear about payment terms. Let them know that you require full payment upfront or a significant deposit.
  
• Don’t shy away from setting these terms. As a new business owner, you need that cash to run your business smoothly. Be professional and clear about why upfront payments are important for your business’s cash flow.
  

It might feel a little strange at first, but once you do it, you’ll quickly realize how it helps you cover costs and move your business forward.

2. Start Saving a Portion of Your Income

If upfront payments aren’t an option for your business just yet, don’t worry! You can still raise capital by being consistent with your savings. Saving a portion of your income is a simple but effective way to fund your business.

You don’t need a massive income to start saving. You can begin with whatever you have, whether it’s a monthly allowance from family, a side gig, or your regular job. The key is to start putting away a percentage of whatever money comes in.

You can even use tax returns, birthday money, or any other unexpected income to fund your business. Over time, these small savings will add up and give you the capital you need.

Start with Small Steps:

• If you receive a monthly allowance, set aside 10-20% for your business.
  
• If you have a full-time job or a part-time gig, save a small portion of your paycheck—just $100 or even $50 a month. You’ll be surprised at how quickly this adds up.
  
• If you receive gifts or bonuses, put a portion of them aside for your business.
  

For example, if you receive $1,000 in income, setting aside 20% of it ($200) will allow you to save $200 each time you receive income. By the fifth month, you would have saved $1,000, which you can then use to cover business expenses such as registration fees, marketing costs, or tools.

Be Consistent and Patient

The secret to saving is consistency. Even if you start with a small amount like 1% or 5% of your income, the key is to build the habit of putting money aside regularly. Over time, you’ll start to see that small savings turn into a meaningful amount.

In the Bible, we’re reminded of a principle that mirrors this saving habit: In the story of Joseph and Pharaoh, Joseph advises Pharaoh to save one-fifth (20%) of Egypt’s crops during the seven years of abundance so that they would be prepared for the seven years of famine. That’s the same principle you can apply to your finances—save a portion for your future business.

So, whether it’s 1%, 5%, or 20% of your income, start putting that money away. Your future self will thank you for it.

The Power of Consistency and Small Steps

Raising capital doesn’t have to be a huge task or something that’s out of your reach. By collecting payments upfront and saving a portion of your income, you can steadily raise the funds needed to get your service-based business started.

It’s about taking small, consistent steps. Start with what you can, and over time, the funds you need will start to build up. You don’t need to go into debt or find external investors. With a little planning and patience, you can raise the capital you need to turn your dream business into reality.

Recap: Your Action Plan

Now that you know the two ways to raise capital for your business, here’s your action plan:

1. Collect Payments Upfront: If your business model allows, start asking for full payment upfront or a significant deposit. Use the funds you receive to pay for business essentials.
   
2. Save a Portion of Your Income: Whether it’s from your job, allowance, gifts, or tax returns, start saving a portion of every dollar you receive. Begin with small amounts and gradually increase it over time.
   

Your homework: Open a new bank account labeled “Future Business” (or whatever your business name will be), and start putting aside a percentage or set amount from every income you receive. Whether it’s 1%, 5%, or 20%, start saving today.

Starting your service-based business doesn’t have to be a big, overwhelming task. With these two simple strategies—collecting payments upfront and saving a portion of your income—you’ll have the capital you need to start and grow your business.

Final Thoughts

Remember, you don’t have to go big right away. The key is to start small, be consistent, and trust that God will provide the resources you need for your business to thrive. As you put in the effort to save and manage your finances wisely, you’ll find that the capital to start your business is already within your reach.

I hope this helps you feel more confident about raising capital for your service-based business. You’ve got this!

Until next time, keep trusting the process and moving forward. You have everything you need to start that business!