Start Debt Free, Stay Debt Free: Get Your Business Off the Ground Without Getting Deep Into Debt

18 January

How wonderful would it be to start a business debt free? That is precisely what Girish Navani, founder of eClinialWorks, an electronic medical records solution in Weborough, Mass. did back in 1999. It resulted in him earning $100 million in cash, and $250 million in projected sales for 2012. His business philosophy? Make sure that recurring revenue exceeds operating expenses.

Constant Profit

“That way we know we can run a profitable business even if we don’t make a single new sale,” Navani wrote in an article for Success Magazine.

Stay prepared for any dips in sales or unforeseen economic troubles so you can keep your business profitable even in down time. Have a stable business layout and stay on top of your finances. There are businesses like Capital Processing Network that help by offering custom services and solutions to protect customers, businesses and their funds.

“It doesn’t make sense to spend money in anticipation of getting new customers,” said Navani. “This thinking (on recurring revenue) lends itself to a much more gradual business plan—fewer peaks and valleys—which helps you to stay focused on your vision.”

Debt-Free Philosophy

Jana Francis managed a similar business feat when she successfully co-founded, and online Groupon-type daily-deals retailer of baby products out of Salt Lake City, UT. Her business philosophy? Build a business with great customer service completely debt-free without investors, and without spending a dime on advertising.

“When I started, I put up $5,000 of my own savings and put an initial product order on my American Express card,” Francis told Success Magazine.

“To this day, I have never carried a revolving credit card balance. That card is paid off each month. It is critical that my business partner shares my feelings about debt.”

To successfully open a profitable business debt-free like Navani and Francis isn’t easy, but it is doable if you follow a few guidelines.

  • Be driven. If you’re not 100 percent behind your business idea and moving your business forward, you might as well pack it up and go back to your old job. The dedication, patience and drive it takes to start up a successful business is equivalent to training for a marathon. Without the proper preparation and motivation, you’re not going to place, or even finish.
  • Starting a business debt-free means being exceptionally thrifty. Like Francis, cutting out what may seem like essential expenditures such as advertising (or breakfast) might help keep your nascent business afloat. If you’re really serious about not incurring any debt, having a solid business philosophy such as Navani’s or Francis’ and sticking to it can really help.

It can be really helpful to recognize when a gap in the marketplace may reveal a business opportunity. Knowing the industry first, assessing your risk tolerance, test marketing your products sooner than later, and scrutinizing your business idea with a profitable firm are other helpful tips. And although you’re gung-ho about keeping your business debt-free, you may want to recognize that financing may make sense at some point. And ultimately, knowing when to close the doors on a failing business idea can assure you that you can get back up on your feet with a new idea in no time.

Special thanks to Edgar Frohme our guest blogger and Images are courtesy of