As an entrepreneur, you get quite accustomed to failure. Of course, there many reasons why a business doesn't succeed. Maybe there just isn't a market for your product or service. Perhaps you didn't assemble the right team. Or, you just didn't understand financial basics.
I've had my fair share of failures. When I first started out, I was running an agency. We were bringing in a lot of money every month -- and then we lost our biggest client. This was a huge blow to the company; we'd just hired four new people in the previous month, and now we didn't have money to pay for them or some of our other people. The experience taught me a lot of great lessons about finances.
To make sure that your startup succeeds, here are 5 financial lessons that I've had to learn the hard way:
1. Don't Be Concerned With Outside Investments -- At First
Whenever you hear words like "entrepreneur" and "startup," you may instantly associate them with "funding" and "investments." In my opinion, seeking out investments is a waste of your time and energy in the beginning. I've raised over $30M in the past 10 years for startups I've worked on, and I've never been able to raise money without bringing in at least $50K/month.
According to the Small Business Credit Survey, only a small percentage of new or small businesses borrow money. In the United States, only 18 percent of microbusinesses applied for credit at all; on top of that, businesses reported that it took about 24 hours to search and apply for credit.
At least at first, you're better off bootstrapping and applying for credit (or seeking investment) if and when you grow your operation into a much larger business.