Dear Dave,

I have no debt except for my house, and I have eight months of expenses in my emergency fund. I'd like to slowly start an online business while working my regular job, but even though I'm in pretty good financial shape, I don't have much money left at the end of the month. How can I start my business without borrowing the money?


Dear Kayley,

It's simple. You start and run your business with cash. That should be a guideline for every entrepreneur. You'd be surprised how much cash will pile up over time, even if you save just a little bit each month.

Plus, you may have more money on hand than you think to get your idea started. Right now, you're a little heavy on your emergency fund. I recommend people have three to six months of expenses set aside for emergencies. You could back your emergency fund down to five or six months of expenses and move the extra over to an account designated to getting your business off the ground. After that, you grow it a little bit each month until you have enough to open your doors.

The big thing, Kayley, is don't be afraid to start small. Some of the best and most successful companies in this country started as cottage industries or micro-businesses. I started my company on a card table in my living room, and there's nothing wrong with that kind of beginning. It's easier and safer in a lot of ways, and it doesn't take a lot of money. So, I love your wisdom in wanting to start slowly online while keeping your full-time job.

My advice would be to take about two months of expenses out of your emergency fund and move it to a little business account. Then watch your budget and think carefully about your spending. You're already a person who's in control of her money, so I think you'll do a good job growing this business.

Remember: no debt, use cash and grow slowly. There's no shame in any of these things. The best, most successful businesses don't outrun their money and other resources!


Dave Ramsey is America's trusted voice on money and business. He's authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. His newest book, written with his daughter Rachel Cruze, is titled Smart Money Smart Kids and is out now. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at