Why you need to be broke to jump start your venture

This article was first published on LinkedIn: https://www.linkedin.com/pulse/why-you-need-broke-jump-start-your-venture-surabhi-ganguly?trk=prof-post








Starting a venture of your own means you need to sit down and do some serious number crunching - what is the investment you are willing to make, how much money do you need to raise in order to take this idea forward, how comfortable are you yourself so you can take care of your financial needs while your business takes the time it needs to establish itself. This results in elaborate plans and detailed timelines of the amount of time you have in your hands to prove your concept.


One of the first things you do is separate your private funds from the business account, so you get a really clear picture of the fund that are available to invest in the business, and what you can use to buy yourself an evening in town. If this choice of starting your own venture comes after a salaried career, chances are that your bank isn't empty and there are some savings to pull you through the beginning.


The best thing you can do for yourself is to lock up as much of your savings in fixed term investments as possible, leaving yourself with as little spare cash as you can. A smaller bank balance results in lower consumption, cutting down on frivolous expenses, and reducing the amount of money you spend on social outings. These are regular money saving measures that we all can adapt to fairly quickly, which would make it easier to make your savings last longer than they normally would.


However, the real reason to lock the money away is not as much to make your savings last, but more to make yourself available for your business. Having freed up your time from your salaried job, may mean less human interaction as you may not have as many colleagues and business acquaintances as before. The concept of being a free bird also allows you the luxury of planning brunch, going out shopping in the middle of the day, and essentially allowing yourself time off any time you see anybody else having a good time. You are your own master, and there will always be ways in which you justify the break to yourself, and make yourself promises on how the lost time is going to be made up for. So while you are allowing your money to flow away, the bigger (and more critical) resource you are squandering away is the time on your hands.It is necessary to either be truly broke, or at least create a sense of having no spare cash while starting on a new venture (you'll really have to be good at deceiving yourself to make this work though). This is what creates a sense of panic, a sense of urgency, and keeps your mind from wandering, making plans to have fun instead of getting to work. Sometimes all the number crunching that you do, to prove you have enough spare cash to tide you through the tough times, may only be detrimental in making sure you have no tough times after all! I suppose this also justifies the argument that a good idea does not need to wait for the right time!