Every post in this series has alluded to it, this is the post that talks about it — money. Last year sucked because we didn’t have any money. There were months that we got paid so little, going back to the days when our parents would give us an allowance seemed like a luxury. There were some months that we didn’t get paid at all. And while that’s totally normal for a startup — it isn’t enjoyable.
I asked Jen what she did to pull us out of the penniless spiral and here’s what she had to say.
“We started making money, and then I made sure we didn’t spend it all. We paid back our debts (back pay and the stupid fucking government) and then I looked to see where we could save some money. I made Dana comb through our subscription lists, multiple times. And then, we didn’t spend very much money for the rest of the year.”
Pretty basic things.
During that long hard winter, we would venture to Capital Ideas frequently. It was almost always because we were guaranteed a free lunch and cookies — but this one day, we got some killer advice that stuck with us. “If you make money in the beginning, don’t spend it. It’s tempting to take trips, buy nice things and drive fancy cars — but it’s smarter to keep that money in the business. There will be time for all of that stuff when your business is stable and successful — the first years of your business aren’t the right time for it.”
So that’s completely paraphrased post-free sandwich coma recollection. But it’s something we talk about a lot, and it’s good advice.
Are you making money? Yes! Please pass go and deposit your $200 (into an emergency fund because Money Jesus says so, hallelujah amen).
I’m not suggesting that starvation and paying bills late is equal to business success, but there’s a lot to be said for being thrifty! Just because you can afford to pay people oodles of money, it doesn’t mean you should.
I’m not suggesting that starvation and paying bills late is equal to business success, but there’s a lot to be said for being thrifty! Just because you can afford to pay people oodles of money, it doesn’t mean you should. Also worth mentioning, if your company cannot afford paying out oodles and oodles of money, like ours couldn’t in the first year of operation — don’t do it. But, but, but….what about that star person demanding an exorbitant sum of money? Fuck ‘em. If at this stage in your business you don’t have people that share your vision and are willing to risk a little financial discomfort until your business gets a strong footing — they don’t belong with you. The time and energy you’ll spend trying to get these people on board isn’t a good return on investment (and it will likely stress the rest of your team to the breaking point).
Yes, it would be nice to get your hair cut more than twice a year, go on shopping sprees at lunch time, and drive a luxury vehicle that isn’t from 1998 — but smart business people resist these temptations and pray that their car engine turns over every morning. Why? Because it’s good for the long term health of their business. And as a business owner, the long term health of your company should be your top priority.
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