Cash is King, yes you have heard it a million times but it is true, it will make or break you in the first two years of business. Some key things to think about:
- Expect not to be paid for 6 months when you begin.
- Do a cash flow for the next year, consider all expenses you may incur, and always remember to pay yourself, even if it’s just $100 a week; it will keep you happy and focused.
- Keep 6 months of costs in a bank account. For example, if it costs you $2k a month to run, keep $12k in a bank account; as you start getting regular sales, you can reduce this to 3 months.
- The GST is not yours. Separate it when you receive your sales receipts and put it in a separate bank account. Then, don’t touch it until you lodge your BAS return. The interest is all yours, though.
- Don’t discount your rate—okay, you can do it for good reasons—but keep it consistent and expect everybody to know what everybody else pays you.
- Don’t worry if you fail or change your mind; most businesses morph considerably from inception. Don’t be afraid to throw away a product if it’s not working.
- Have an end in mind. Do you want to be doing this in 20 years, or are you hoping some enormous company will buy your company or your idea in 5 years? Your end will determine how you begin, what structure to use, how you resource your company, and what your 5-year strategy looks like.
- Make a five-year strategy. It may be rough, but it will help you determine where to spend your time and money.
- Don’t expect to become a millionaire; it happens, but not often. Do this because you want to, not because of a massive cash gain you are hoping to get.
- Trust your gut, but don’t be afraid to ask for help. People are more kind than you expect.
Two Paddles 