Should you ever use personal or family money to fund your business?
A few weeks ago we did an episode on how to talk to your spouse about investing in your business – and WOW did we ever have a lot of response and private messages.
One viewer in particular had an AWESOME comment that addressed an underlying fear or stopping point for so many entrepreneurs – and that is – should you use your own (or family) money to fund your business?
The comment from moneymom.online reads:
Hi Nafissa, a friend of mine asked me to check out your video. She has had a home based business for a number of years and it’s been a drain on family resources. Here’s my 2 cents:
1. successful entrepreneurs never borrow from family funds
2. if you can’t get a business line of credit from a bank then you shouldn’t be able to get one from the family funds
3. family money always has strings attached
4. if you use family funds then your business becomes libel to litigious action; you need complete separation of business and family funds
5. by separating the business from family funds, you are truly an entrepreneur and you do not have to explain your business investments to your spouse. Does your spouse explain what they do at work every day to earn an income.
Entrepreneurship is supposed to create financial freedom and independence. Ask yourself whether or not you would pursue a particular business venture if family money was not available. If the answer is not, then you probably shouldn’t go forward.
I love it when viewers share their points of view and get conversations going! Thank you moneymom for this thought provoking comment. This topic is so important that I wanted to highlight it, share my insights, and make sure the whole Living Forward community gets in on the conversation.
In today’s episode I dive into what you need to know about how to fund a business that is not yet profitable. Where should that money come from? Is it ever okay to use your personal or family money?
Please let me know what your thoughts are once you’ve watched the episode and feel free to share this info with anyone you know who needs it.