1. Appreciate how lucky you are to be starting something from nothing.
2. The less cash you spend the longer you have to make your dream possible. Spend cash in the right places. Like health insurance.
3. Never interrupt a good salesperson in the middle of their pitch, even if they are saying something incorrect. Tell them afterwards, and if it's important enough they can always call the customer/investor and clear it up.
4. Read contracts. A lot of the time they don't make sense. Sentences go on forever. Don't take that crap. Make a lawyer spell things out and simplify. Make sure you read and understand every detail, particularly investment agreements.
These people are not your friends.
They are not your parents.
They are not looking out for your best interests.
Your lawyer isn't either. Lawyers are just making sure you are not going to get sued and such. They are not looking out for your best business interests. Do not think because a lawyer says a contract is 'pretty good' that the lawyer has evaluated the business implications of it.
5. Don't listen to accountants when they say the word 'profit'. It's an illusion. It doesn't necessarily mean you made money. You could in fact have ended the year or month with less cash (and assets) than you had at the beginning, which sound to me like an unprofitable year or month, but they will take numbers from an accrued loss and add them up to make profit.
This kind of profit isn't going to help you pay rent or hit payroll. And savy investors can read through it. Cash is all that matters.
So when a suit* say 'cash is king', which is often their 'advice', what they really mean is focus on the cash flow, not the balance sheet.
*a 'suit' is someone who has started a few companies and is quite successful, but doesn't remember the early nitty gritty days of suffering and fear, so they like to say things like 'cash is king' to summarize all their mistakes of running out of cash.
6. Figure out how to make and read a cash flow and balance sheet. It's like a doctors chart for a business. If you have no revenue, and you have 'project' revenue in your cash flow chart, make 2 more. One with no projected revenue, and one with 1/3 what you projected.
This tells you how long your company will survive in the worst case and most likely case scenario. Chances are your actual revenue will be 1/2 to 1/3 of what you expect it to be (in the beginning, with no history or trends, and a brand new product in a new market) The more prepared you are for this the more likely chance you'll have of surviving.
And, if your 100% right, you have better problems to solve than running out of money. :)
2. The less cash you spend the longer you have to make your dream possible. Spend cash in the right places. Like health insurance.
3. Never interrupt a good salesperson in the middle of their pitch, even if they are saying something incorrect. Tell them afterwards, and if it's important enough they can always call the customer/investor and clear it up.
4. Read contracts. A lot of the time they don't make sense. Sentences go on forever. Don't take that crap. Make a lawyer spell things out and simplify. Make sure you read and understand every detail, particularly investment agreements. These people are not your friends. They are not your parents. They are not looking out for your best interests. Your lawyer isn't either. Lawyers are just making sure you are not going to get sued and such. They are not looking out for your best business interests. Do not think because a lawyer says a contract is 'pretty good' that the lawyer has evaluated the business implications of it.
5. Don't listen to accountants when they say the word 'profit'. It's an illusion. It doesn't necessarily mean you made money. You could in fact have ended the year or month with less cash (and assets) than you had at the beginning, which sound to me like an unprofitable year or month, but they will take numbers from an accrued loss and add them up to make profit. This kind of profit isn't going to help you pay rent or hit payroll. And savy investors can read through it. Cash is all that matters. So when a suit* say 'cash is king', which is often their 'advice', what they really mean is focus on the cash flow, not the balance sheet.
*a 'suit' is someone who has started a few companies and is quite successful, but doesn't remember the early nitty gritty days of suffering and fear, so they like to say things like 'cash is king' to summarize all their mistakes of running out of cash.
6. Figure out how to make and read a cash flow and balance sheet. It's like a doctors chart for a business. If you have no revenue, and you have 'project' revenue in your cash flow chart, make 2 more. One with no projected revenue, and one with 1/3 what you projected. This tells you how long your company will survive in the worst case and most likely case scenario. Chances are your actual revenue will be 1/2 to 1/3 of what you expect it to be (in the beginning, with no history or trends, and a brand new product in a new market) The more prepared you are for this the more likely chance you'll have of surviving.
And, if your 100% right, you have better problems to solve than running out of money. :)