Ask The Money Coach

It sounds like you’ve made some smart financial and business moves in preparation for entrepreneurship and your efforts thus far are to be commended. You stated that you didn’t want bank loans, but you were savvy enough to educate yourself and take business classes at the Small Business Administration. I’m sure the information you learned in those classes will prove helpful in your future endeavors. While I generally don’t like to see people take 401(k) withdrawals for things like paying off credit card debt, I do think it’s OK to use 401(k) money for investments, like launching a business or perhaps buying your first home. Additionally, it’s great that you’ve been able to save up $8,000 specifically for the new business. That tells me that you’ve been dedicated to this process and have been willing to sacrifice to give your business the best possible chance at success. You probably already know that the restaurant industry can be challenging. But if you start small, as you’ve planned, keep our overhead and debts low, and do your market research (as I’m sure you’ve done), I think you’ll beat the odds and have a very successful enterprise.

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 Lynnette Khalfani-Cox, The Money Coach is a personal finance expert, speaker, and author of numerous books on personal finance. She appears frequently as an expert commentator on television, radio and in print.