… but I don’t have any startup capital « The Diary of a Young Entrepreneur

… but I don’t have any startup capital « The Diary of a Young Entrepreneur

This is the first post of a new category that I just created. My hopes are to demystify EVERY single reason that makes a person hesitant to start a business. The first one I’ll tackle is the classic “i don’t have any money” excuse.

When I ask people about starting a business. The main excuse for them to not immediately start one is that they don’t have any money to do so. They then continue on to say that they will save up the money by working at a high paying job in a multinational company. classic and plain short-sighted.

So, is it really possible to save up some money to start a business by receiving a salary? The answer is quite obvious; no. The reasons:

• In the early days of your career, your wages won’t even add up to cover you living expenses.
• You’ll have to use your savings to pay for special events such as: marriage, birth  of a child, birthday presents, health bills and other emergencies.
• An increase in pay results in an increase in expenses. (trust me, this really happens)
• Have you even calculated how long it will take to save up for startup capital? did you include the inflation factor in it?

Almost every single rags to riches story started out with no startup capital whatsoever. Those brave people thought of a great business idea and pitched the idea to investors, banks or anyone that will give or lend them the money necessary to start a business. Sure there are some people, like T.P. Rachmat, that started out as an employee and end up to be a very successful businessman. But you probably didn’t know that he too didn’t fully 100% fund his business with his own money.

Working to save up some money for future businesses also has its risks. The main risk is that if the business fails, your savings would have evaporated just like that. All of that hard work poured in many many hours of labor and sweat gone in a matter of months. If that were to happen, wouldn’t you wish you knew better and asked for Other People’s Money?

The point here is that you don’t have to use your own money to start up a business. The concept of using Other People’s Money is actually a common practice in the business world and is maybe the ONLY way to start a business right. If you don’t like banks, find an investor. If you don’t want to relinquish a part of your company to investors, find an angel. Starting a business is about having a business idea, not about having the capital to start it up. If you have a great idea, people will help.

godspeed