Startup Money Diary
Startup Money Diary
There’s a topic that entrepreneurs widely avoid talking to each other about, and that topic is money. How we financially sustain ourselves as new entrepreneurs is a topic that many of us don’t freely talk about even though it’s a pool of knowledge that all of us would benefit from. Whether it’s tacky to bring up or just plain uncomfortable, it’s hard to get advice on how new entrepreneurs make their money when they’re first starting a business.
Figuring out how to generate consistent income through your startup does not happen overnight and it requires a lot of cushioning from other financial sources to hold you over till your business’ cash flow is figured out (atleast that’s how it has played out for me). Being an entrepreneur during the pre-revenue phase is not glamorous and is stressful the majority of the time.
I’m currently running the third startup I’ve built and have had a variety of odd jobs and sources of income during the pre-revenue phases for all of my past businesses. Listed below are all of the ways I supported myself financially during the pre-revenue stages for all of my startups. My hope is that it’ll shed some light on pre-revenue financial realities and how one person went about filling those gaps.
Startup #1
My first business was a clothing company that my co-founder and I created while we were in college. While I was building my first business, I worked for a clothing retail chain at about 3 of their stores in 3 different states over a span of 4 years.
I worked part-time at this retail chain, so I had the flexibility to mold my schedule around my business’ needs and to go to classes for school. My schedule was pretty demanding as a result of having a college + startup + part-time job schedule, but the money I made from my part-time job was helpful in funding any needed expense for my business. Since I was in college, my tuition helped pay for my dorm room and other school-related expenses and I also had financial help from my parents when I needed it. This was a comfortable time of my life and probably the best situation I could have been in financially as a new entrepreneur.
Startup #2
Before starting my second startup, I had a tiny bit of savings to ride on from working a full-time job at a consultancy and the payout from selling my first company. After a few months, all of my savings ran out and I began the search again for a part-time job while I was building my second startup.
I ended up finding a part-time job at a bakery that was walking distance from my Brooklyn apartment. I made minimum wage, so having enough money to pay NYC rent while working part-time was rough! I ate a lot of ramen, spaghetti, and all the under-$5 meals I could find during this time. Working at a bakery was a nice addition to my food needs through the unsold cookies and cakes we could take home at the end of the week (which also attributed to my 10lb weight gain during this time, but hey, it was food).
It took about 2 years before the second business raised enough money to start paying salaries and before I could switch to working for my startup full-time. Launching this second startup was a struggle and came with a lot of financial and health sacrifices (constant ramen and cake didn’t do great things for me, surprise surprise) before the business started generating revenue. Our business didn’t gain traction until several years of hard, nose-grinding work.
Working minimum wage at a bakery wasn’t my dream situation for a part-time role, but it was a pretty dismal employment situation at large. It was post-recession and there weren’t many part-time employment options that allowed me to take time off for last-minute meetings for my business. I had to take what I could find.
Startup #3
As much as I loved the first two startups I helped build, I made a lot of financial sacrifices to build those businesses. I found myself in debt and zero savings before I began building my third startup. However, I can’t deny the importance of trading money for the real world Master’s entrepreneurship degree that I gained through the experiences of my first two businesses. A lot of people don’t get to experience the entrepreneurial opportunities I accumulated by my third startup so I’m very grateful for it.
I was tasked with the challenge of building my third and current business with no upfront investment. I was interested in the challenge of building a business with $0 in startup investment so I welcomed the opportunity. I worked my professional network aggressively in the beginning so that I wouldn’t have to spend any money on marketing and picked up some consulting projects through that channel. Once I had a bit of traction, I started leveraging testimonials from projects I completed with colleagues in my network to sell my services to people outside of my network.
While I was in the midst of figuring out where my business was going, who it served, and what my best selling services were, I picked up any and all freelancing work that fit my skills so that I could cover my bills in the meantime. After about a year and a half of figuring out my direction and solidifying the foundation of my business, I was able to wean off miscellaneous freelance work and focus on selling only the services I desired.
My journey is similar to other entrepreneur friends of mine. I have friends who walked dogs, waited tables, and took on babysitting jobs for many months while they were building their business. They truly committed themselves to the end goal rather than the temporary defeat of not being able to play the role of “entrepreneur” in their day-to-day.
They knew that the day would come when they’d be able to work on their business full-time and be paid to do what they love… and that’s exactly what they’re doing today. They’re doing work on their own terms and they’re absolutely killing it!
So if your startup money diary looks a lot like mine where your occupation has a lot of slashes in it (entrepreneur/bakery assistant/retail salesperson) — you’re not alone and you might actually be right on track.
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