New Business Startup Problems that a Residual Income Could Help Solve

I'm going to list a couple of the most common causes of failure among new businesses from an article I just read.

Lack of Funds
"One of the major causes of business failure is the lack of start-up capital. If you feel that your start-up capital is not enough, then you should wait until you have saved the amount you need before starting your business."
Having a residual income in place can help with this and also allow you to get a new business started sooner because you wouldn't be burning through all of your startup capital if you have monthly residual income coming in.

High Cost of Finance
"During the early stages of starting a business, many owners commit themselves to taking any sources of finance they have available to them (such as credit cards). This can be disastrous as high interest rates and unfavourable repayment are overlooked due to the pressure of financing."

Again, with a residual income in place to help finance your new business, you wouldn't need to borrow at high interest rates.

The article's advice?
"Remember that for small businesses, the best source of short term funding can often come from family and friends: but pay it back as agreed!"

I don't know about you, but I always hated borrowing from family and friends. Having a passive income would eliminate this need.