Cash is your friend

You have a great idea, you get some friends together and put together a business plan, you find a VC to back you  then you spend the next year putting together your product and then you take on the world with your groundbreaking new product, then your company grows and you are a millionaire.

Sounds great doesn’t it. Unfortunately for 99.999% of startup companies this is simply not true.

Most businesses are based on services, retail, wholesale, etc. and are not hi-tech startups.

Even those companies who are hi-tech startups need a lot of money to even get to a stage to attract VC funding. A lot of great ideas fail because of lack of seed funding.

The upshot is that you need cash – cash is your friend. Without cash you can’t do anything. All the dreams in the world mean nothing without the means to make them happen.

So, keep your day job while you establish your business. If you need to see if you can negotiate a four day week or job sharing to free up some time.

Work at nights and on the weekend.

See if you can give away equity instead of paying.

Can you swap your time or services for something rather than pay cash.

Use smaller companies for your own needs as they may offer a better price.

Get a part-time job at nights or on weekends to save some more.

Never allow your partner to work full time in your own startup – they should be bringing in money from the outside rather than you squandering your precious cash on them instead of the business.

The harsh reality is that you are probably the only one who really cares about your business, so it is up to you to provide funds.  The good news is that once you get steady cash flow the stress levels do decrease a bit.