It seems pretty trivial and obvious, but, I didn't exactly do it when I started my company. And, I don't think a lot of others to do it either -- keep your costs low!If you've just left your job in the corporate world and you're not receiving regular payments every two weeks or so, and you plan on starting a company (or maybe you have already), cut all of your costs as much as you possibly can, immediately. Why?
Because there are two misunderstandings when starting a company:
1. "I will be able to get my company off of the ground pretty fast, so..."
I guess this depends on your idea, however, it really does take time to get your idea off the ground. You should give yourself enough time to test it, get feedback, change it, tweak it, etc... It all takes time. Ensure that you've incorporated this period of time in your cost estimates.
2. "I'll generate enough revenue from my company pretty quickly, or I'll be able to raise financing soon..."
Even when the market was good, it is very difficult to raise financing. And you really shouldn't put too many expectations on it because if it falls through, what will you do? I've learned that starting a company simply takes time. Generating revenue takes time. Raising money takes time. So, make sure you give yourself some time. By this, I mean manage your internal expectations, so there isn't a disconnect between your cost requirements and time constraints.
I went to the start-up life thinking I could raise money shortly after starting my company. The reality is, it has taken time. I feel like if I had changed my lifestyle immediately when I started my company, I would have saved a lot of money and been able to use more of it to finance my start-up.
I think a great mentality to have is to always try to keep costs low whichever way you can. Even though we've raised a bit of money to help us move forward, I still find myself doing everything I can to cut costs.
Any similar sentiments regarding managing costs in the early days of your startup?
Cheers,
Andre
http://abuddingentrepreneur.blogspot.com
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