The Realities Of Starting A Business

Why do you want to be successful?

The first thing most people will say when answering that question will have something to do with money.

“I want to be rich!”

“I want a million dollars!”

Or they’ll say something that is somehow related to having a lot of money, like they want a maid, or a Lamborghini, or their own private island, etc.  They want to live like a baller.

Running your own business often requires you to do the opposite of living like a baller, though.  Especially at the beginning, you often need to be as frugal as possible for two reason:

1) much of your money will be getting put into the business, which means you might not have that much money to spend, anyway.

2) you aren’t going to be getting a regular paycheck, so you cannot count on getting a specific amount on a certain day in the future, so you have to try and make the money you do have last as long as possible.

Let’s talk a bit more about these for a bit.  Nearly any venture you undertake will require startup capital.  Maybe you’re franchising a restaurant.  That costs money.  Maybe you’re printing t-shirts for a clothing line.  That costs money.  Even if you’re doing something that doesn’t require any supplies, you’ll still need to spend money on advertising.  The less money you have because you’ve spent it on cool stuff for yourself, the less money you’ll have to put into your business.  Sure, maybe you could buy a BMW, but buying a used Honda Civic would give you a lot more cash to work with (the exception to this being if your company image somehow relies on the vehicle you drive, for example if you’re a real estate agent).

Number 2.  When most people transition from working for the man to being the man (or woman!), one of the most shocking realities is the lack of a constant paycheck.  People tend to base their spending around that regular paycheck.  Their budgeting revolves around it.  They’ll say things like “I’ll get that next week after I get paid on Friday.”  When you’re starting your own business, that doesn’t exist anymore.  You might go a period of weeks or months without any income.  Are you prepared to face the realities of that?  In order to survive during this time you may need to take some steps to become more frugal.  Eat ramen.  Move into a smaller apartment.  Sell your furniture.  Sleep on a futon.  Find the lowest car insurance rates you can find, or better yet, sell your car (if you live in a downtown city; I wouldn’t sell my car if I lived in the suburbs).  Cook food in bulk and eat leftovers.  Cancel your cable (TV, not internet).  Why are you watching TV, anyway?  You have a business to run.  Go to the $2 theater that shows old movies.  That’s your life while you’re getting started.

Is it worth it?