As an entrepreneur, it can be feast or famine. And in the early days, a fiscal famine is much more common than a financial feast. The question is, how do you stay afloat long enough to make it work?
6 Ways to Stay Afloat
There are times in life where you’re up and other times where you’re down – waiting to hit the rebound. As an entrepreneur, it can take months or years of being down before you finally bounce back and realize the success you’ve been working so hard to achieve.
There’s nothing embarrassing about trying to survive. It’s an innate human trait that’s been cultivated over centuries. But what you do during your period of survival will dictate how well (and how quickly) you’re able to climb out.
Here are some practical steps you can take to stay afloat just long enough to give your business a chance to become the profitable beast you know it can become.
1. Slash Business Expenses
The first suggestion is to go through your company’s numbers and slash every unnecessary expense you can find. A lean business is a much more profitable business and you’re almost certainly bleeding cash in certain areas.
Look at recurring costs and see if there are ways to lower these amounts. For example, do you really need to rent commercial office space? Or can you work remotely? Are there SaaS subscriptions that you only use occasionally and could do without?
2. Slash Personal Expenses
Don’t stop with cutting back on business expenses. You should also consider how you can strip down your personal expenses to the bare necessities. (Every dollar that you eliminate from the expense side of your household budget is one less dollar you have to add on the income side.) What you can slash?
“The internet may be a necessity, but cable TV, Netflix, Hulu, Spotify, etc. are not, and you can put them on suspension until you have spending money again. Likewise your cell phone plan. You may be able to negotiate a lower rate simply by asking,” entrepreneur Heather Wilde writes. “Go through your bills and find everything that isn’t essential and start the process.”
Another suggestion is to analyze your house and look for ways to make your home more energy efficient. With a few simple home maintenance projects – like switching to energy efficient windows and doors – you can dramatically lower your monthly bills.
Many entrepreneurs are elated and surprised to find they’re able to cut out hundreds of dollars of monthly expenses in just a few hours of analyzing bills and placing phone calls.
3. Find Side Gig Money
Building a business requires a lot of 10-, 12-, and 15-hour days. But whatever leftover time you do have should be allocated for some sort of cash-flowing side gig. This could look like selling services online, consulting, driving for Uber, delivering pizzas – any kind of side hustle to help you generate a few hundred dollars per month.
4. Rely On Your Spouse
If you’re married, you have a distinct advantage that many entrepreneurs do not. Instead of being forced to rely on a single income, you have the ability to produce two incomes. Whether your spouse is already working or is currently staying home with kids, find a way to rely on your spouse for extra income during this time. This is part of what it means to be married. You elevate each other, provide shade in times of scorching heat, and work together for the betterment of the household.
5. Keep Investing in Yourself
It’s easy to neglect yourself during times of survival, but avoid this trap. Now more than ever, it’s imperative that you keep investing in yourself. Cultivate your skills, acquire knowledge, network with other people – do it all. You never know when one skill, idea, or connection will jumpstart your results.
6. Take a Modest Salary (If Required)
If all else fails and you’re at risk of not being able to pay your basic household bills (like mortgage/rent, utilities, and food), you may consider pulling a very modest salary out of the business. You’ll have to be the judge of what that means. But it should be just enough to cover your expenses and not a penny more.
You may also want to weigh the pros and cons between taking a modest salary and pulling out some sort of personal loan or drawing on a line of credit. Neither option is particularly attractive, but sometimes there’s no other choice.
Putting in the Work
There’s no substitute for hard work. If you’re sitting back and hoping that things will work out, you probably won’t like where you find yourself in six months. However, if you do the work of the entrepreneur – and do it with intentionality and purpose – you’ll find yourself in an advantageous situation in the years to come.
Are you willing to sacrifice today so that you can live well tomorrow?