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The Case for Sticking with a Low-Cost Startup

February 10, 2010

Most working people are risk averse. When you think about it, risk avoidance as a personality trait is required in order to be a good employee. Compared with an entrepreneur, you have very little to lose when you work for someone else.

Budget constraints Royalty Free Stock Photo

Your job and daily responsibilities are outlined for you in your job description, your working hours are most often set by your manager. You get reviews with feedback on how you’re doing; you have help setting professional goals. In a positive economic cycle you can expect to stay employed as long as you live up to your boss’ expectations.

These are just some of the reasons why making the transition from employee to entrepreneur is so much easier when you keep your startup costs as low as possible. The less you risk up front, the less pressure you have to deal with in your first years of business ownership. There’s less money to raise, less of a monthly nut to meet to cover your overhead – you get the idea.

The really exciting part is that you can begin to celebrate success so much quicker than if you launch a venture that requires a great deal of seed money. 

Quote for Today:

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“Bootstrapping an entrepreneurial idea with your own capital is often the best way to go.  It’s so hard to raise money during a recession….”

~  James Shein, Professor, Northwestern University Kellogg School  of  Management http://www.newsweek.com/id/211573 

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What could you do if you only had a $1,000  and yourself to invest in a startup?  Start to think in these terms.  Surprise yourself with ideas.

Tomorrow’s topic: Creating a Startup Budget

 

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