Low-Risk Investments That Could Help Finance Your Small Business Start-Up
There’s a lot involved in starting a company, from creating sales and marketing strategies to developing your business plan. One large part of that is trying to finance your start-up. While many people are eligible for loans, some aren’t. Others would prefer not to be straddled with debt.
Unless you have some savings built up, then you might assume that you’re out of options. If you plan appropriately, however, there are a few things that could work. While a side hustle alongside your day job or company could do the trick, few people have the time for this.
Trying some low-risk investments could overcome these. Though you’ll have to start months ahead of establishing your company, they could generate enough of a return to finance your start-up. While you’re doing so, you could work a job or even focus on other aspects of your business.
What To Consider Before Getting Low-Risk Investments
Before investing in anything, it’s worth considering a few factors. Depending on the funds you have to invest, alongside what risk you’re willing to take on, you could look at two things. These are:
No-Risk: These are 100%-guaranteed investments and you won’t lose any money. You’re less likely to make money, however.
Some Risk: While you have a greater chance of making money, you also have a chance of losing money.
The key with these is that the lower the risk involved, the lower the return. They could also take longer to play out, although that’s not always the case. If you’re looking to try to make more money, then you might have to consider riskier investments.
If you want low-risk investments that could help finance your business, there are several to consider.
Low-Risk Investments That Might Finance Your Start-Up
Gold & Silver Coins
Gold and silver coins are time-honored investments that have remained relatively steady over time. That’s tied almost directly to the price of the precious metal itself. There are other factors that can affect these, which are worth knowing when buying silver coins, alongside their gold counterpart.
The design and age of the coins, for example, could have a drastic impact on their value. Some coins are much more prized than others, with older coins being much more valuable. There are fluctuations to this, however, so you can buy and sell quickly to make a profit.
It may also be possible to avoid paying capital gains tax on gold, although this can depend significantly on where you live.
High-Yield Savings Accounts
While high-yield savings accounts aren't exactly an investment, they are low-risk. These are completely safe, depending on where you live, as they can be backed by governmental agencies. As a result, you shouldn’t lose any money on it, although this is only up to a point.
With a bit of research, you can determine the best high-yield savings accounts to choose from. Planning out your business in advance means that you can set one of these up early. By the time you start your company, you should have seen a decent return on your investment.
Corporate Bonds
Running a start-up means that you’re already entrepreneurially inclined. That could mean that you’d be interested in putting some money in another firm. While that might seem counterintuitive when you’re trying to finance your start-up, you could choose a firm outside of your industry.
That’s where corporate bonds come in. With these, you essentially buy a part of the company. Depending on what kind of company you buy corporate bonds from, you can see a greater or lower return.
There are multiple low-risk options, with these typically being larger, profitable companies. While this might be a more long-term approach to financing a business, it could lead to a generous cash injection in your first or second year.
Wrapping Up
Risk is the largest worry associated with investing. You want to go into things to make some money, not lose it. If you’re trying to finance your start-up, then you’ll want as little risk as possible. Each of the above should be viable options.
Before trying any of them, however, you should spend time researching them. That’ll make sure that you’re reducing your risk as much as possible. By diversifying and trying a few low-risk investments, you should maximize your potential return on investment.
With some options, you’ll see this ROI much faster than others. If speed is your priority, then you might want to consider these. It’s worth having a mix of shorter- and longer-term options, however, as this will give your start-up more cash injections over time.