What are the few words that you associate with a startup in any sphere from mobile development to eCommerce solutions? Is it the success in inventing something new, impetuous growth and high profit? Well, it can be true but only in 15% of cases. In other cases, there is a great possibility that your startup will make you really broke like you have never been before. Why you shouldn’t be afraid of low salary and why this all can happen – read in this article.
Why are Startup Entrepreneurs Broke?
It’s a question that’s been asked for years, and there’s no easy answer. But if you ask me, it’s all about hustle.
See, startup entrepreneurs are always hustling. They’re always working on their next big idea, always trying to find the next big thing. And that’s great! Hustle is what makes the world go round.
But the problem is, startup bros often forget to hustle their finances. They’re so focused on building their business that they don’t pay attention to their money. And that’s a recipe for disaster.
I’ve seen it happen a million times. A startup bro comes up with a great idea, gets some funding, and starts building his business. Everything is going great, and he’s living the dream.
But then, something happens. Maybe the business doesn’t take off as quickly as he thought it would. Maybe he makes some bad financial decisions. Whatever the reason, he starts to run out of money.
And before he knows it, he’s broke.
It’s a sad story, but it’s a common one. And it’s all because startup bros don’t hustle their finances.
So if you’re a startup entrepreneur, here’s a piece of advice: hustle your finances just as hard as you hustle your business. It’s the only way to avoid ending up broke.
Here are a few tips to help you hustle your finances:
- Create a budget and stick to it. This is the most important thing you can do. If you don’t know where your money is going, you’ll never be able to save it.
- Pay yourself first. This means setting aside money for yourself each month, even before you pay your bills. This will help you build up your savings and give you a financial cushion in case of an emergency.
- Invest your money. This is a great way to grow your wealth over time. There are many different investment options available, so do some research and find something that’s right for you.
- Don’t be afraid to ask for help. If you’re struggling with your finances, don’t be afraid to ask for help from a financial advisor or a friend who knows about money. They can help you get on the right track.
Hustling your finances is not always easy, but it’s worth it. By taking the time to manage your money wisely, you can avoid ending up broke and build a secure financial future.
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First, from FFF or Family, Friend, and Fools – people who give you their money just because they like you or want to support without benefitting. If your startup will be funded by this type of investors, do not expect a lot of money at first (of course, if your FFF are not millionaires). Not having enough money for business requires making sacrifices, and most of the times it will be your salary. You will not be able to buy a car or maybe even scrape a living. But do not be afraid, because any brilliant startup idea will pay back later on.
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- Do not be afraid of dreaming. But also do not be afraid of turning them into reality.
- It is worth listening to other people’s opinion. Do not consider yourself the only person capable to offer a genius idea.
- The manager should focus on the results of the work, not on the process.
- Concentrate, do not try to do many things at once. You must be concerned with the quality of performance.
- Every person has his own path, so look at other’s success only to be inspired, not to be jealous.
- To succeed, one must be up to insanity to a committed cause.
- Let your subordinates know that you categorically insist on the highest quality.
- Failures make us think.
- Try to have accurate information about the case, on which you’re making a decision. A good surgeon will not operate if there is another way to help the patient.
- Be untiringly inventive.
- Believe in yourself as in no one. And even more, believe in your startup.
- Growth solves (almost) all problems.
- Remember that you have more chances to be defeated by the fact that you are working poorly than on what the competitor will overwhelm you.
- Get lucky!
The other situation is when your startup has business angels. In that case, you will obviously have a lot more money for your startup, though not for yourself, because people invest money in your future product/application/service, not in you. One more thing about business angels is that they have a lot of friends in the needed fields, so you should try to meet as many people as possible. These people may become your main investors.
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Check this quote of encouraging words for you from Sam Altman, the creator of the social network Loopt, partner of the incubator Y Combinator: “You’ll often hear conflicting advice about everything but “build a great product”. This means you can go either way on much of the rest of it and it doesn’t really matter. Just make a decision and get back to work. Product/market fit is what matters. You can—and will—make a lot of mistakes”.
And the last situation is when you are lucky and could attract venture funds to your startup. This situation is better than having business angels because funds will not be invested in you but the product. But you are the creator, so being invested in by venture funds can allow you to have more or less decent salary. The chance of getting venture funds is really rare because they usually do not invest in recently opened startups. You shouldn’t give up, so keep trying and you may find investors.
10 More Reasons Why You Should Never Give Up
- Learn to remain an optimist, even when your world breaks up into pieces.
- Most things are not as risky as they seem.
- Simply means good. Complexity is suspicious.
- Move fast. Speed is one of your main advantages over large companies.
- The best of leaders are not interested in what prevents them from working. They are busy, despite the difficulties known to all, and manage to do them surprisingly well.
- Set goals in front of the company and motivate people to achieve them.
- The leader should be able to say “no.”
- It is impossible to avoid troubles, breakdowns, and crises.
- Take care of the time.
- On very bad days, remember that tomorrow everything will be better because it’s harder to imagine worse!
So the reason why you may really go broke in your startup is because your income does not exceed outcomes at first, and there is a need to keep supporting your business in some ways. But soon you will start making a profit and then you will be able to pay yourself more and more as your startup grows.
Good luck with your business!