Living As An Entrepreneur: A Tale Of Caution

If someone asked you what it was like to live as an entrepreneur, what would be your response? As you think about the dream of becoming your own boss, what do you imagine it would be like in the beginning? How would you live? How do you think those who have succeeded at starting a business live in the beginning? These are important questions if you want to be realistic about your goals.

In my personal experience I can say that two words describing the life of a budding entrepreneur come to mind rather quickly. The first one is “frugality,” and the second one is “discipline.”

There are other words that describe the life of an entrepreneur that may be more pleasant to think about–like “freedom”; however, the word freedom is more indicative of the rewards of frugality and discipline that will come in time.

I remember when I finally decided to take the plunge and start my first business. I was making really good money in the corporate world and I had some stock I could sell that was worth about $10,000 to get started. I knew I had two choices in how I could use that money. One was to use the money to buy materials, tools, and supplies to get the company started; the other was to sit on the money and use it to live on as I built my company and made my first profit.

I remembered watching a friend of mine who had decided to start a trim carpentry business. He had some seed money, he had tools, and he had an older van. I remember that he thought his business would be more successful at the start if he purchased new tools, a new van, news signs on the van, and other (according to him) essentials. He went out and spent his seed money—“betting on the come”–and then spent the next few months chewing his nails to the quick looking for a profit. He had new payments and a large overhead right out of the starting gate. Within a year he was selling his new van and tools and looking for a job. I believe his only mistake was that he started off with too much overhead and too many liabilities.

Now, that is not to say that in some cases upfront expenditures don’t exist or aren’t completely unnecessary, but as a budding entrepreneur you have to be very wise in your initial spending. Yes, it’s an awesome feeling to have a new van, new tools, and a new desk or office, but when the “new” bills start coming in faster than the initial profits—it can steal your momentum and your drive.

I thought through this memory of my friends experience and I decided to see how well I could move forward with what I already had in place. I made it sort of a challenge to myself to see just how frugal I could be as I began my new company. I decided to be as frugal and disciplined as I could with my seed money, and that I would not make any purchase until it became evident that I had to make the purchase to continue moving forward.

What did I do? I started a decorating company out of the back of a 1981 Toyota Hatchback. Yes (laughing) it was ugly. Yes, I was at times embarrassed, but I was able to see a profit rather quickly and I wasn’t chewing my nails to the bone and eating Tums every night before bed. As I landed each new contract, I would buy a new tool or some other supply I needed. Within six months I was able to pay cash for an old ford truck. Eventually, I bought a new truck and had custom signs made for the sides of the truck. Within three years I had installers working for me and all I did was handle sales. During the first six months the $10,000 that I had set aside was a life saver. There were times in the beginning that I had to pay myself a salary from that savings. I had learned a valuable lesson from my friend’s unfortunate demise.

Obviously there are a million scenarios to staring a business that are different from the above example; however, the principles are the same in almost any start-up business. Discipline and frugality are vital principles to live by as a budding entrepreneur.

About the Author: William Power

William Power is the author of "Voices from the Heart".

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