/ planning

The only thing you have to consider before starting a business

The only thing that you have to consider before you launch your business is;

How long until I run out of money?

Why? Because out of money is out of business. If you’re self-funded, friend funded, family funded, bank funded, venture funded or whatever you need to know how long until you run out of cash. Besides for the fixed expenses that you will be incurring on a regular basis, you have to live as well. Sure you can cut on costs by swearing off women (or men), indulging on ramen noodles, working out of your garage, and by sleeping on the floor. But once you’re developing your business the costs just start coming at you like you just stomped on a red fire ant hill.

If you’re bootstrapping and running a lean startup, you’ll have to be even more detailed in your financial plan. How you plan to finance the business & your life is around 10000000x more important than your business plan.

But if I capture X of market share and sell Y a month then I’ll be making Z and it will cover my expenses!

I’m really happy for you that you ran a few numbers. Run some more numbers and scenarios to see what the different thresholds you need to make in order to survive or break even. There are so many things during startup life that you’ll have to change, tweak, and pivot to that your simulations or estimates will only be vaguely on target. Profit margins, expenses (a lot that you won’t even account for to start), and business models change. Markets move fast and to survive you’ve gotta go with them.

So before you quit you dayjob, I recommend that you moonlight. Start building something, networking, or gaining experience in the field that you want to launch. Startups are a labor of love and if you’re not willing to sacrifice a few hours of sleep at night, then you don’t have what it takes. There will be times when you wish you could get a few hours of sleep, but you’re too worried if you’re going to be able to eat for the next few days :).

When you do launch your company, small details are crucial when starting up. For example, if you’re starting a small grocery store, you will want to get high quality gondola shelving from a site like this one: www.schaefershelving.com because it’s a long term investment, rather than expense.

But seriously here a few great posts on moonlighting and taking your idea to reality. It’s also much easier to quit your job and start on a project if you already have something to sell!

  • Perfect Foods Bar interview on Mixergy
  • What INC500 CEO’s Moonlight on via INC
  • How to startup and keep your day job via Entrepreneur

benhebert

I make money online through websites and business consulting. Everyday I'm challenging myself to learn and do more.

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