Should I use a loan to finance my Shopify Business?

LogoMakr_3MP3pl.png

No… 

Oh I am sorry do you want more? To start most of these businesses are not needs based businesses. Meaning the behavior of your customers are too unpredictable to depend on. Secondly what if the platform changes? Or what if the digital method of converting customers change? The answer is no, it is not “you never know!” Dumbest platitude you hear about businesses that are not needs based operations. Just no do not loan finance your business. 

Here is how a $1,000 loan looks in these common repayment time frames from a bank at an interest of 25% compounded monthly:

I = J/M  .25/12 = 0.02083333333333333333333333333333 

PV= 1,000

N= 12 per year. 12 * 1 , 12 * 2 , 12 * 3 

PV * (I+1) ^ 12

PV * (I+1) ^ 24

PV * (I+1) ^ 36

  • 1 year of the loan principal unpaid, $1,280.68
  • 2 years of the loan principal unpaid, $1,640.14
  • 3 years of the loan principal unpaid, $2,100.50 (Three years to double the principal amount) Is it clear this is a scam?

Do not start a recreational business on a small business loan, capital or anything else.Don’t even put it on a credit card. I am serious! Unless you want to lose your business, go bankrupt or any other wonderful thing. Do not do it!

I wish I could go to the lady who was starting my bank loan application in 2015 for a business I should not of wanted and yelled “NO!” in her face for even suggesting it. Web Marketing businesses are terrible to take a loan out on. I’ve met small business owners in Canada who think their Facebook page is their website. Plus people are kind of going the do it yourself direction. So I was aiming for an outdated profession. 

Do not start with debt or capital. Start with a hobby and grow organically! Financing a creative, or hobby business is actually a lot like financing a bachelors in Art. Just do not do it! Waste of money & time. 

One Comment on “Should I use a loan to finance my Shopify Business?

  1. Pingback: The small brand is dead, the personal seller and story is alive! – Ashton Deroy

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: