So there’s a rumor I keep hearing in certain circles; that whilst starting a business will take time, it needn’t take much money.
And I agree. Kind of.
Starting up a business is expensive only when you’re spending money on things you don’t need and, broadly speaking, I would claim that startups only need two things: ‘Stuff’ and ‘Understanding’
“Stuff”: Capital expenditure, physical things have a natural expense to them. The cost is usually linked to the wider world, abundance or scarcity of resources & the state of the planet in general, which is is all fine and rational by my account.
“Understanding”: Knowledge, however, has no such natural price point. As long as our accountant costs us less than the price we'd pay for getting the accounts wrong, and as long as getting that test verified earns us more than the certification cost us to get, it was the correct course of action. These experiential things aren’t justifiable or tangible costs but they’re also a bulk of our expendature.
Now, depending on what you’re starting, you’re going to want these at different places in the startup cycle and in different proportions. If you’re daft you’ll start a business that requires a vast amount of ‘stuff’ early on, pre-revenue even, and whatismore you might choose to do so in a recession.. y’know.. Just to make your life really complex but I digress..
At RBD we’re just putting the finishing touches to a £110k funding package. It has been an insane amount of work to push though, and as the money isn’t in our account yet there’s not even a guarantee that it won’t still all go awry, but it’s £110,000. I’m guessing it’d take me 3-4 years to earn that - so what is 3 months buried under a forest of paperwork of loan / equity agreements, tech docs and grant applications in comparison?
Nothing really, until you seriously consider the fact that we don’t need £110k.
We probably don’t need half of £110k,
What we need is a mentor / non-exec / advisor type bod.
Mistakes are expensive; without a mentor we have to budget for them, and so do you, and so do the vast majority of young start-ups with high growth potential who haven’t found adult supervision yet.
The lovely souls at the banks, grant making agencies, government and such would do well to realise that if they started training and encouraging mentors they could save themselves a bundle in cash. By all means buy the stuff, but ought we really to be buying in the understanding?
I, for one, would certainly rather have less money wisely used than a heap of cash with which to outsource my companies knowledge at the expense of my personal learning.
Come on guys, give me half the money I asked for and a mentor who can save me the other half…
