Have you ever been knocked down so hard that the wind was knocked out of you? Have you ever held your breath underwater for so long, hurling yourself to the surface, lungs burning, because you couldn’t wait a second more? That willingness to fight for your survival, with an unshakable belief that you will get back up, that you will make it, that you will try again – that is the intrinsic motivation and fight that entrepreneurs feel when they’re earning the next (or first) must-earn dollar they need to survive. Okay, you say, that’s fine for people that are fighting back from a setback, but what if you’re trying to start a business when you’re broke? It may sound counterintuitive, but not only can you start a business from your financial heels, you might be better off for it. Here’s why.
Experience is earned.
We all can bring to mind the legends of entrepreneurs like Steve Jobs and Bill Gates who started out tinkering in their garages and ultimately built unimaginable wealth and success, but this achievement is not reserved for these household names; there are as many examples of broke-to-riches success stories as there are great ideas. The fact is: this story is compelling, because we are all afraid of failure – and that fear can be a black hole that sucks you in, or it can be a powerful fuel that drives you to success. If you can put that fear to work, not as desperation, but as motivation, you can absolutely build a business that is as good, or better, than one that started with a comfortable cushion of capital.
Three Questions To Ask If You’re Broke & Starting A Business
- Do you understand yourself (and your customer)?
Money helps, but it’s not a prerequisite. Knowing you have what it takes to build a business and lead a team that can weather the roller coaster of startups, however, is. Are you committed, resilient and creative? Characteristics like these tend to lead to an accumulation of experience that is a much more important factor in your success than the availability of funds. Experience and knowledge can’t be bought, and they take time and drive to fully develop. When you’re already starting from zero, you’re more likely to be open to advice, guidance and insight from others, as well as more focused on your particular business’s role in the marketplace. Developing a deep insight and understanding into your niche and the customer it serves is a key component of creating a successful business – and limited resources force you to hone in and commit.
- Are you looking for contacts – or partners?
As a solo-founder/CEO, all eyes, and all responsibility, is on you. That’s heavy stuff. It can be tempting to reach for the security and absolution that come with sharing the financial and leadership responsibilities. Resist this. If you take your focus off fear-based decisions about money, you’re far less likely to end up in a disastrous co-founder partnership that can cause you to dilute or lose ownership of everything you’ve worked so hard for. When you commit instead to growing a network of contacts, instead of potential investors, you’re forced to slow down and learn from others, so when the time is right to make an ask, you’ll be ready to do it in a way that is best for your long term interests.
Commit to bootstrapping and recognize that taking time to grow is a good thing. It means you can’t be impulsive and forces you to engage with valuable peers and mentors that can provide more value than a cash infusion ever could.
- Do you welcome obstacles?
I’ve talked before about how obstacles are our greatest teachers and friends. They’re going to take far more of the credit for your success than any of your achievements. By starting out with the challenge of bootstrapping your way to profitability, you’ll be gaining experience and confidence that you will need to leverage again and again and again throughout the life of your business. And, it’s important to note, you’ll be creating a powerful story to tell future investors that proves you have the drive and know-how to succeed, even without capital.
Money Matters, It Just Doesn’t Matter Most
As you make the journey from no money, to little money, to more money, consider this simple fact of human nature: if there’s enough money to comfortably back your business, complacency will set in. But, if you’re willing to bet your mortgage on your business, the fight becomes very real and your motivation to make money becomes intrinsic to who you are as a founder. When you’ve reached a lifestyle with a high need for cashflow, your startup budget line for executives/ leadership/people can start to look out of whack.
Smart founders realize this: the pay day is the liquidity event, not the paycheck.
Enjoy the ride.