As an entrepreneur, you’re your boss. So how can you possibly be expected to answer anyone else regarding your finances? The truth is that no matter how much you love what you do and how seriously you take your venture if you want to succeed as an entrepreneur, you need money. Unless you have enough cash to cover expenses for at least six months (which not many people do), becoming an entrepreneur requires first taking on an employee’s role.
Because even if the company that hires you is smaller than yours someday will be, they still get first dibs on your paycheck until things turn around and the other way around. In short you need money to be an entrepreneur.
What Does Money Mean to an Entrepreneur?
Money is a means to an end. It’s a tool that can help you get from Point A to Point B. No, it’s not the most important thing in the world, but it’s damn important. As an entrepreneur, you can’t do much if you don’t have any money. You probably can’t even pay your rent, which is a big problem.
Beyond that, money represents your ability to control your destiny. It tells you that you can make things happen. It shows that you’re responsible and accountable. You can use it to buy supplies, pay your employees, and even purchase the necessary supplies and equipment to get your idea off the ground.
How Much Money Does a New Entrepreneur Need?
First, every entrepreneur needs enough money to get through the first six months of their business’s existence. After that, it depends on how much you’re spending, how much you’re bringing in, and what stage your business is in. When you’re starting, you need to have enough money to cover your expenses for six months.
Why six months? Because that’s about how long it takes for new business ideas to make it through their initial “cruising altitude” period and into their more steady cruising speed. It takes about six months for new businesses to find their market, for entrepreneurs to find their target audience, and for a company to hit its stride.
If you don’t have enough money to cover six months’ living expenses while your business gets on its feet, you’ll likely have to take an outside job. That could mean quitting your business before it can even start or never quitting your day job, and always having one foot in the corporate world. It’s not an easy decision, but it’s one that many entrepreneurs have to make.
Why Do You Need Money as an Entrepreneur?
Entrepreneurs are risk-takers. They have to be. After all, if everything worked out according to a plan, there’d be no risk involved. However, there’s also a big difference between taking a calculated risk and being reckless. You need money to ensure that you aren’t stretching yourself too thin.
You need money to keep your bills paid. And you need money to buy supplies, hire employees, and pay for basic services like internet and electricity. If you’re just getting started with your business, you may even need money to pay yourself. It’s not uncommon for entrepreneurs to work without a salary or draw (the amount they take from their business) until they’re sure their company can make it. You can take a calculated risk without being reckless, but only if you have the money to take care of your basic needs.
How to Find the Money You Need as an Entrepreneur?
Some people find that being an entrepreneur just happens to them. They get fired, laid off, or quit their day job for other reasons and then decide to start their gig. If this sounds like you, lucky you. You’ve already got the money you need.
However, if you’re planning on quitting your day job to become an entrepreneur and don’t have the cash you need, you’ve got some work ahead of you. You can borrow money from family and friends, but that can put a strain on your relationships. You can also work a side gig while building up your startup funds. The important thing is to get the money you need before you quit your day job. That way, you won’t have to worry about money while getting your company off the ground.
This may sound like a downer, but let’s face it. The vast majority of new businesses fail. Entrepreneurs work hard, but they also take risks and put in long hours. They worry about money, customers, employees, and every other aspect of their business. Nobody is saying that being an entrepreneur is easy.
However, if you have a little bit of money saved up, you can make sure that the things you worry about are the things that matter. You can worry about what goes into your product, who you hire, and how you get new customers. Instead of stressing about how you’re going to keep the lights on, you can focus on bringing your company to the next level. When it comes to entrepreneurship, money isn’t everything. However, it’s darn close.