What Every Entrepreneur Should Be More Prepared for When It Comes to Money
The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question, “What should budding entrepreneurs know about building a business?” is written by Cat Lincoln, founder and CEO of CLEVER.
Own your “why”
Start with your dream. When my co-founder and I started our company, we saw a need in the market to help brands work with influencers. But the driving why was that we were determined to prove that we could start our own business and succeed on our own terms.
That meant being rule breakers about how we marketed ourselves, how we managed our teams, and even where we set up shop. We’ve been an entirely virtual company from day one, growing along with the technology to support communications for our dispersed team.
Having a big reason for venturing out on your own helps during the tough and unglamorous parts of starting a business: the late nights, the bills you aren’t sure if you’ll be able to pay, the lost business, and even worse, the crazy customers you can’t fire because you need the revenue. These are all things that can wear you down, and make you throw in the towel.
Find the right partner
When one of my co-founders and I contemplated starting our company, so many people responded with a horrified, “But you’re best friends!” that doubt crept in.
I called another close friend and made her meet me for a last-minute coffee. Standing in the chilly shadows of downtown San Francisco, I fought tears and shared my fears. Was I crazy? Was I risking too much?
She looked at me philosophically and said, “You get to a point in your life where you only want to work with your best friend.” Her answer rang true and inspired me to take the leap.
Running a business will challenge your ethics and values on a nearly daily basis. I’m so grateful to know that both of my co-founders share my core beliefs about right and wrong, and we ground our business decisions in those beliefs. We’ve made financial decisions that included investing in technology and paying our staff more; while this may seem like it could have hindered our business growth and that these decisions could’ve been contentious, they supported our values and what we wanted for our company, so they were easy calls to make.
Learn money management
You will absolutely need more money than you realize, and much sooner than you realize. And that’s okay, because there are plenty of ways to get money—VCs, bank loans, friends and family, or angel investors. Then you need to manage it.
Early on, I had a liberating wakeup call from our VP of client services, who watched me struggle for weeks with annual forecast spreadsheets. She finally pulled me aside and said, “Look, this isn’t your strength. The sooner you figure out how to delegate this, the better—for the company and you.” I called our advisors for referrals, and within weeks, we had an amazing CFO who helps us find and stay on the right financial track.
The lesson is to find people who are experienced at setting up the financial structure of a business and take their advice. Get a CFO, even if it’s part time. Invest in the best accounting processes and tools you can afford. Perhaps most importantly, find a lawyer with expertise in startups who can help you structure your relationships with all of these resources.
Like all decisions about your business, the final responsibility for financial decisions lies with you. But you don’t have to know how to do all of the accounting, forecasting, and reporting yourself. Just be sure to spend the time asking questions and educating yourself so that you can evaluate the work of your team and make the best decisions for your business.
Also, remember to apply the “right partner” principle to your search for these partners. The last thing you want is someone with conflicting values giving you advice about money.
There are few things as satisfying as starting and succeeding as a business owner. But our economy is built on the bravery of daring people, just like you, who decide to make your own future. Find a goal that drives you, partners who you can trust, and the resources to support your financial infrastructure, and go for it.