The Pros & Cons of starting a business with your own money

Put your money where your mouth is. When the time comes for you to start your own business, are you willing to invest your own money into it?

I guarantee you if your own money is on the line, you will begin to look at your business very differently.

You are going to make sure you have exercised due diligence in an effort to minimize the risk of losing your money. You will plan differently, do your homework, and create a solid business plan, because all successful owners will tell you that a solid business plan with the right execution is the key to success.

But there are Pros and Cons.


100% OWNERSHIP – Since you are the one investing and putting in the work, it makes sense that you should reap the rewards.

FULL CONTROL – You don’t have to answer to anyone else. You can take the business in any direction that you want.

MORE DISCIPLINE – A popular mantra for success in life is “Live within your means”. In business this mantra also applies.

CERTAINTY– A big advantage of funding a business yourself is that you know exactly how much money you have available.


SLOW GROWTH – Most business owners are not short of ideas, but it is the lack of money that holds them back. Sometimes not having enough money to start makes it difficult for you to see the profit return quickly.

PERSONAL RISK – Nothing is guaranteed in business. The money you invested might never come back.

LONG HOURS – Trying to get a business off the ground takes a lot of devotion and time. So the hours you might set for yourself may grow exponentially.

NO CONTACTS – Usually when starting a new business you have yet to develop a contact list. It will take some time to build those relationships that you can always use.

The Pros & Cons of starting a business with other people money

In the world of small business financing, there are lenders and there are investors.

These two sources of funding can provide you with all the cash you need to start or grow your business.

Although outside investment means giving up a degree of control, you might gain from the experience and insight of the new players in your business.

But there are pros and cons.


NO DEBT – If you’re taking money from an investor usually the collateral is taking from the equity of your business.

CONTACTS – Starting a business from scratch can be very nerve wracking, but having the right people around you with the expertise an Investor can bring can make all the difference in your business.

FINANCIAL BACKING – Having a great business idea with no money to start usually wont get you far in business. Nevertheless, having cash flow to your disposal can mean more freedom to spend for tools you need for your business.


INTEREST RATES – A traditional bank will charge you higher rates based upon a variety of factors including your credit history and the type of loan you’re trying to obtain.

GIVE UP CONTROL – With no money to start usually lenders will ask you to give up control in the form of equity.

REPAYMENT – Bank loans are strictly monitored and must be paid on time no matter what kind of month your business may be having financially.

Written By: Key’ondre Drummond

Edited By: Yvonne Sam



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