Depending on the business, utilization of personal savings as a source of financing can be achieved in a number of ways. Before going into more specifics however, it is important to note that capital invested in a business is locked in that investment until it is either withdrawn and/or yields a profit. For this reason it is advantageous to utilize one's capital in supplementation of one's business instead of sole capitalization.

The following illustrates a three-step process by which personal savings can first be maximized for optimal leveraging and application through employment of financial instruments and institutions. Second, the financing obtained in step one can be further optimized by properly applying the funds as necessitated by considering the type of business. Then, in the final step, the business itself can be operated using overhead expense management techniques that minimize start up operating costs.

Step 1- Financial Leveraging:

The goal here is to take a sum of money and turn it into a larger sum of money through financial instruments and business tactics. As soon as money has been invested in a business it can't be used for anything else until it yields a profit. For this reason it may be a good idea to leverage the capital before investing it in anything. A few such leveraging methods are as follows:

Business Plan Collateralized Loans: Non-secured loans don't require collateral, but rather a good business plan. The fact a business owner is willing to put his or her personal savings on the line is the first step in this business plan as it demonstrates the willingness to invest personally. If the lender finds the business plan achievable they may loan money without collateral thereby once again allowing the business owner to not use up the personal capital.

Small Business Seed Grants and Capital: Seed grants and/or capital may be available to entrepreneurs with demonstrated capacity to attain probable cash flow in a new business. Furthermore, depending on how strong the business model, idea and plan are, the seed capital may not require repayment in the case of a grant or have low interest rates in the case of seed capital.

Loans on Investment: If savings are invested, those funds can earn a percentage in interest and/or capital gains, and also be used as collateral for additional financing. This way a business owner isn't actually using his/her money. What's more, the returns from the investment may pay off all or part

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