We sat at our kitchen table – an awful green-topped card table – in our 500-square foot apartment on the side of a mountain outside of Boone, NC, and discussed the future of Nancy Ray Photography.  Earlier on that year, Nancy “Miller” had done her first two weddings on her own, for friends of ours.

We faced the same questions anyone else starting out faced:   How do we grow this business?  How do we get the word out?  What do we need to succeed?  What does “success” look like?  And, most importantly for our discussion today, How are we going to fund it?

Like many businesses, there’s a great temptation with photography to go out and buy all the best gear, a souped-up computer, and a brand to go along with all of that.  I know we could have easily gone out and dropped $15,000-20,000 getting everything we wanted.

But we decided that night around that green card table that we were doing this thing debt free, just like we wanted to do life.  Since then, we’ve not entertained an offer for credit cards, credit lines, business loans, or other business debt.  It hasn’t been easy, and things didn’t go quickly, but we avoided debt and the risk that comes along with it.

I’ve espoused some reasons to live debt-free before, but here are a few in a nutshell for your business:  Business debt legally obligates the lender to your business’ income before it even comes in.  It gives someone otherwise unrelated to you a financial stake in your company – you wouldn’t be connected to them except for the fact that you took and used the money they offered you.

Debt = Risk

Debt also equals risk.  When money is easy and business is booming, debt is seen as a smart move.  It’s when things don’t go exactly according to plan that debt doesn’t work out so well.  Exhibit A: The Great Recession.  How many times in your business (or life) have things not gone exactly according to plan?  If you’re like me, it’s been more than a few times.  Ultimately we decided that we didn’t want to give anyone the power to take our business from us if things didn’t go according to plan.

Now I freely admit, we have a small business.  While it is a debt-free and profitable, it is still considered a “micro” business.  My advice will most directly apply to entrepreneurs who are in a similar boat, but I think there are principles you can draw on no matter what the size of your company.  Furthermore, a debt free business is possible no matter where you are, from a boot-strapped micro-business to Fortune 500.

From my experience, here’s what it takes to run your business debt-free:

1) Make the commitment.

The first and most important thing to do to have a debt free business, you must believe it’s possible and make a strong personal commitment to doing it.  No matter what size you are, it’s possible.  Among public companies with no debt (according to CNBC) are Apple, Chipotle, Red Hat (local here in Raleigh), Amazon, Garmin, Bed Bath & Beyond, and (oddly enough) American Express and Master Card.  If multi-billion dollar companies with regular billion-dollar-plus payables can do it, your little business can figure it out.

Making the commitment to debt freedom also means a commitment to slow growth, patience, and doing things unconventionally.  You’re committing to maintaining larger cash reserves, not over-extending your capacity, and hiring only when you know you have the finances to sustain it.  Anything that goes against the grain of our societal culture requires a high level of commitment to execute and sustain.

Check back tomorrow for the rest of the tips for running your business debt-free; there are 6 more to come!