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Coping With Start-Up Losses

Are you having the start-up blues? Is your new business not profitable yet and are you starting to reconsider employment?

There is very little immediate incentive to start a business. In the beginning stages, the pay is low or even non-existent and most of the labor and heavy lifting is being done by you and you alone.

While I have provided ways to measure success when you aren’t profitable yet, I haven’t explained ways you can cope with the fact that you aren’t going to make a lot of money in the beginning.

Alternative measures of success can only take you so far until you ask yourself: “where is the money?”. Once you start asking yourself this, you have to start finding new ways to deal with lack of funds.

Look for the long-term

In a previous post, I presented a case as to why entrepreneurship makes more fiscal sense in financial terms.

You may have a cash flow projection, or at least have an idea as to how much income your business can be pulling in the long run.

After understanding that these long-term gains can be realized, consider that the short-term sacrifices you are dealing with now will be more than worth it, considering long term profits.

In other words, tell yourself: “We are struggling now, but as long as we stick it out, we will make it big in the long run”. It may sound typical and cliché’d, but it will certainly help you in being persistent.

Ask yourself if you are enjoying your new business

If you are enjoying your new business, then this is certainly a perk that can keep you going until you make money.

If the type of work you do is something that you wouldn’t mind doing for free, then this provides some incentive to continue with little pay, at least for the next few years.

Are there any non-monetary benefits you are receiving?

Are you making good social connections and networks? Are you learning new things? Is this experience teaching you new ways to do business and hone your entrepreneurship abilities?

If you answered yes to any of these questions, you see that there are other incentives present that can hold you over until you are profitable.

Receiving no perks other than pay can be a hard pill to swallow when you are in the beginning stages of a business. However, if there are other benefits present, it can make it a whole lot easier to stay motivated.

Get a second, less meaningful job

Okay, you have made sure that you still get a warm, fuzzy feeling as an entrepreneur, even with with no pay. That still doesn’t change the fact that you have no money!

You certainly have bills to pay and mouths to feed, how are you going to address these problems?

Unfortunately at this stage, you probably need a secondary source of income. If you don’t have any other business interests or you don’t have a spouse or significant other that can assist with the bill paying (or already is contributing as much as he/she can), then you will have to get a job.

Just temporary, don’t worry. But in order to pay the bills and even give your business some start-up capital, you will most likely have to enter the workforce temporarily.

This may actually make coping with a young and developing business a lot easier since you will be more tolerant of your business’s lack of profitability. Thus, this can help in giving you more patience and in tackling your business’s problems with a clear head.

Reward yourself when reaching a milestone

You’re working hard to make your business succeed. Why not reward yourself? Buy yourself something nice next time you clear a milestone. That way, you will feel better about your accomplishments and feel more motivated to move on.

Ask yourself if you’d rather answer to a boss

Sure you’re not making any money yet. But what is the alternative? Do you want to work for a boss the rest of your life? Of course not! Keep that in mind whenever you start doubting if entrepreneurship is right for you.

Weigh flexibility in work vs. structure

Would you prefer a 9-5 workday? Would you rather work a rigid schedule, where you can’t choose your own working hours?

Remember the flexibility that entrepreneurship brings you and that it allows you to make the rules as to when you should and should not be working.

2 comments… add one
  • Scott King January 19, 2009, 3:20 am

    Great article, Matt. Getting through those first couple years sure seems to be the hard part!

    I think it is true that self-employed individuals tend to start missing the “good work” comments from a normal job. Trying to get those “good work” comments from customers or family may not be so easy…

    • Matt Thomas January 19, 2009, 2:41 pm

      Scott, that is an excellent point. When we are employed elsewhere, we get plenty of extrinsic motivation and praise from our superiors, since they want to keep our productivity optimal. When we are the bosses of our own business, however, extrinsic praise and motivation is a lot more rare (like you said, customers are family are less likely to praise). Thus we must rely on intrinsic motivation which is much harder to cultivate.

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