Let’s get right into it: yes, you need money. Unless you’re remarkably lucky and the cash flows in straight away, either from sales or investors, money is going to be an issue sooner rather than later.
And when cash flow issues hit a startup, they can hit hard, delaying important progress like rolling out products, hiring key staff, or fitting new offices.
You’ll need capital to fund software or product development, office space, marketing, and more. Most of your success will flow from that initial investment.
So even though it might seem counterintuitive when you’re trying to minimize financial risk at the beginning, the last thing a startup needs is to trim back costs (and shed staff) in its early days, just when it needs to be focusing its energies elsewhere.
Entrepreneur David Roth doesn’t have much patience for people who founded a startup and then ran out of cash: “As leaders, it’s our job to manage the time and money needed to get to the next level without running out of either one.”
So plan it all out before you start, lest you find yourself halfway through and suddenly falling out of the air like Wile E.Coyote trying to run full-speed across a canyon.