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Chris LoCurto


February 20, 2014

How to Fund a Business [Video]

February 20, 2014 | By | 14 Comments">14 Comments

This is a question I get all the time and my answer is always the same.

I don’t suggest you get loans or venture capital money to start a business.  

I coach so many entrepreneurs that go into massive amounts of unnecessary debt. Instead of focusing on growing their business, they’re focused on making payments and staying above water. Debt increases risk and magnifies mistakes. It’s a terrible place to be and can become a huge stress in your life.

Instead, start small. When you believe in your vision, bootstrap it! If you make great tacos, dont open a restaurant. Start with a warming cart. When you’ve made enough money, move up to a catering truck. If you’re continuing to make great amounts of money, buy another taco truck or move into a brick and mortar store. Stock pile money then move on to the next step. Self-fund your business growth with sweat equity and profit, not debt.

Question:  How did you fund your business without debt?

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  • Matt McWilliams

    Learn from me…

    Started company with $5000. Built it to $18M/year in three years through hard work and a lot of dumb luck.

    Went into debt to buy another company. Company sold for $2M in debt (meaning no one made anything) four years later.

    Would we be a $200M company today without the debt? No.

    Would we still be in business, likely doing $25-30M a year, employing 50+ people, and enjoying it.

    Don’t do debt.

  • Chris LoCurto

    Amen Bruce!! Keep going brother!!

  • Lily Kreitinger

    This right here is one of the reasons that has kept me away from entrepreneurship for almost 20 years. (Gosh, I’m old!) I started my business right out of college with ZERO money in the bank. I partnered with my dear friend from college and her dad paid all our bills. For two years. And we didn’t make a penny. The friendship suffered after I decided to quit the partnership and then she passed away, so to say I have many regrets is an understatement.

    Two or three years later, my dad opened his business and ate up a huge severance package he got after being laid off from a job he held for 20 years. He burned all of it and then some and the business tanked.

    Common thread? We both started big instead of small. We both were in over our head with no plan on how to grow. Hoping that I’ve learned the lesson and do it the smart way this time around. Thanks, Chris!

    • Chris LoCurto

      Wow! That sucks Lily. And I’m really sorry about losing your friend.

      Great examples for people though. Thanks for sharing them!

  • Ken Trupke

    Nice video, Chris. Not only a lot of air quotes, but unusually expressive hands this week, too!

    Seriously, great advice. People I work with often complain “but that approach will take FOREVER!”.

    Well, actually, what takes “forever” is paying off the loan and getting back on your feet after your “can’t miss” idea…misses.

    • Chris LoCurto

      HAHAHA…I’m Sicilian, what can I say?

  • Sherry Carver

    I made a mistake about 15 years ago of renting an office space before I had the business plan. I thought that if I had the office — they would come! Wrong — I closed it about a year later and only had the expenses to show for it. This time — I am putting together the plan before I spend, thinking through every expense and paying as I go.

    • Chris LoCurto

      Amen Sherry! That’s what so many restaurants do. If they have a space, surely everyone knows they are there and the food is great. Doesn’t happen that way.

      Glad to hear you’re focusing correctly!

  • Joshua Rivers

    I’ve had the tempting thought of getting a small loan, but this advice keeps ringing in my ears. Thanks for yet another reminder!

    Siri must be a high “C” and really needs more information before making a decision.

    • Chris LoCurto

      HAHAHA!!! I think you’re right

    • Lily Kreitinger

      Don’t go to the dark side, Josh!!! No loans, no loans, no loans…

  • Chandler Lyles

    Hey Chris!
    What a great video today. I’m in the process of transitioning from the Air Force back to school. While I’ve been in the AF I’ve been selling BBQ. Plenty of people have supported me with both their money and words. (I’ll let you say which is more important!)

    My customers have suggested that I get some sort of veteran loan and open a brick and mortar store. It never gets old seeing the looks on their faces after I tell them my real plan. Its funny because they always say something along the lines of, “thats a good idea..”

    I always laugh because the face never matches the skinny words they choose to use. Thanks for providing continued great content.

    • Chris LoCurto

      That’s awesome Chandler!! So glad to see you’re ALREADY succeeding with this business!

      And thank you so much for serving so I can do what I do!!