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.

The Power of Passive Income

Imagine you want to start your own business. You think you have a good idea and a sound business model. But you don't have a lot of savings and you think it might take you a year or two for your new business to make enough money to pay the bills. You might delay starting your business or never start it out of fear of going broke before it has time to get started. Maybe you have a family to think about.

Now what if you had $1,000 a month of passive income coming in? Does that make it easier to take the plunge and start your new business? How about $2,000 a month in passive income? Even if your new business grows slower than you thought it would at least you have that $2,000 a month still coming in.

Maybe you have started a new business. It is your dream business. You love it and it is your passion. But it is only generating $3,000 - 3,500 a month in income, but you need $4000 a month to pay the bills and would like to save another $500 a month for retirement, college for the kids, vacations, a new house, etc. How many people have had to give up their dream or drastically cut back on their standard of living because their business comes up just a little bit short each month. Their business is profitable but not profitable enough. An extra $1,000 a month in passive income would make their situation peachy. They could continue on with their passion and not have to worry about the bills so much every month. The best part is that they could build this passive income online and create it in the same field of knowledge that they are passionate about.

What could be better than a passive income in your passion?