Do not start for money
Money is not a good reason to start a business. In the media in both the UK and Australia recently, there have been lots of articles about the insane rise in taxes and CGT, in particular, and what it does to deter founders. While I don’t agree with the increase in taxes I don’t think it really has any impact on whether or not someone founds a business. Anyone who decides not to start a business because, at some point in the future, there is a chance that they will get taxed when they exit should probably NOT start a business in the first place. If that’s their attitude then they will almost certainly fail anyway and its nothing to do with tax. It’s because they're focused on a financial outcome and money can’t be a motive for a startup. It’s not a get rich scheme and you should never think like that. As Jennie Moss explains it can take year to even earn a decent wage. https://www.linkedin.com/posts/bootstrapconfidential_starting-a-business-to-make-lots-of-money-activity-7470002413316272129-KGXe?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAF1UkEBCY-a17j1ZdCo5zlZPvZI1z0Bcbk
Put simply money is not enough of a motive for a founder to succeed. To understand why check out this extract from my book, Bootstrap Confidential- Building from Bedroom to Boardroom without Investors.
"Before I tell you why money is never enough of a motive, just look at your odds: 90% of all businesses fail in their first five years. Of those that make it past that milestone, 50% will fail within the next five. It takes about ten years to develop a good enough story to get a reasonable acquisition price, so your combined success probability is already now down to 95% against you. The odds are 20 to 1 just to get to 10 years.
On top of that, you must ensure that your ten-year exit sale arrives in a favourable economic environment, that you have a good broker, and that you can find a PE firm or strategic buyer who is looking for something like the business that you have built and is willing to pay the price you want.
If you are doing this to make a quick buck or for an immense payout, then to paraphrase The Hunger Games, ‘the odds are forever not in your favour.’
Yes, there are exceptions like Facebook, SnapChat and Google, but they are exceptions.
It doesn’t matter how much money motivates you—it will never be enough. Even if you’re totally motivated by dollars and nothing else, when push comes to shove, when you feel like the entire world is against you, when roadblocks seem insurmountable, money alone will not get you out of bed.
LinkedIn founder Reid Hoffman once likened building a business to jumping off a cliff and trying to figure out how to build an aeroplane on your way down. It is not for the fainthearted.
Bootstrapping is not only enormously exciting, but it is also hugely challenging. On most days, it will feel not only as if the world is against you, but as if it is throwing everything, including the kitchen sink, at you.
To prevail, you must be motivated by more than money—by the idea, the opportunity, by being in control and more.
On really bad days, just getting out of bed may seem challenging, which is why motivation is so key. To put it simply, building your own business is beyond exhausting.
This is why doing it for a better life balance is delusional. If it’s your business, it will consume you. I don’t just mean it will keep you busy. It will wake you at 2 a.m. with your brain whirling on trying to find possible business solutions. Weekends will become annoying interruptions to your work.
When you’re just trying to get it off the ground, it takes every minute of every day as you throw everything you’ve got at it. When it does start working, you cannot let up even for a nanosecond, as you’ve worked so hard to get this far, and you desperately do not want the opportunity to slip away just when you are starting to get somewhere.
When you have problems or encounter roadblocks, big or small, nothing happens and you cannot function until you have worked out a solution.
The Importance of Passion
Once it starts taking off, it’s that exhilarating downward part of the rollercoaster ride, where it feels like you are going at 100 miles an hour and your adrenaline is pumping rapidly. It’s completely exhilarating and you don’t want it to stop for a single second.
But its exhausting, nonstop nature is one reason you cannot just be motivated by money. You must have passion; passion for your idea, passion about being your own boss, passion for solving the problem with your solution.
Passion gets you out of bed in the morning and keeps you going when you are beyond exhaustion. Passion is what makes you continuously find energy for that next step, do that one extra thing, fix that nagging problem, or make that last attempt.
Exhausting & Addictive
It may sound exhausting, and it absolutely is, but here is the kicker—it is totally addictive. There’s a good reason that lots of entrepreneurs and business owners enjoy extreme sports. You have to love risk, the rollercoaster rides, the exhilaration of leaping into the unknown without a clue about the outcome.
I often compare building a business to climbing a 6,000-metre mountain. When you’re standing at the bottom, the path to the top looks daunting, even impossible. But as you slowly, surely, work your way up, descending small amounts and then ascending again, you start to build acclimatisation and altitude resilience as you adjust to these previously unscaled heights.
Gradually, you become more and more exhausted by insomnia and depleted energy. It becomes harder to think as thin air deprives your brain of oxygen. You can only focus on taking one step after another, steadfastly focusing on the challenge of just putting one foot in front of the other, keeping going, up and up, until you finally reach the top.
Once you have reached the summit, the views are breathtaking. You are amazed and proud of how far you have come when you look back down. No one at the bottom can understand how you got there. You revel in the moment, you luxuriate in the views and bask in your own sense of achievement—until, out of the corner of your eye, you notice another, taller, more challenging summit.
And off you go again."
If you enjoyed this then the book is available Bootstrap Confidential: Building from Bedroom to Boardroom Without Investors eBook : Green, Charles: Amazon.co.uk: Booksne 10
Comments