It is natural to despise small beginnings, especially if your dream is big, or you have climbed high up the corporate ladder and starting small looks like you are going nowhere fast. Despise not the days of small beginnings.
I get asked, “I earn so little, I can only save so much, how can I save enough to start my business?” Most people I have come across have the same answer for why they are yet to start whatever they want to do… start-up capital. I am not by any stretch of the imagination discounting the need for start-up capital. You need money to start, sure. However, you need brainpower much more than financial muscle. If you have an excellent business plan and blueprint, you can attract the required start-up capital. That is not what this article is about.
This is about how you can be your source of venture capital. It starts with learning how to save and start small.
The cheapest and easiest way to raise money for your business is to save. I know you are not earning enough. Actually, nobody does. If you cannot save on your current income level and standard of living, you will not be able to save when your income goes up. Your expenses will grow up to swallow your income. It happens all the time. The best time to start, if you have not already, is NOW.
It begins in the mind
If you desire something strong enough, and long enough, things will begin to line up, to make it happen. It is a natural principle. If you believe in your dreams, this is incentive enough to take a dispassionate look at your spending profile and trim out the fat. Pursuit is proof of desire. The main reason you have not started doing something about your dream is that you do not desire it strongly enough.
A businessman invests his capital and spends his profit. An average worker spends his capital (salary) and of course, sees no profit. If you look at your salary as capital (which it actually is), then you will treat it with more respect, and invest, instead of spending it. When you spend money, it goes away and never comes back. When you invest it, it leaves you for a season and comes back with a bang.
Most of us are where we are now because we spend more than we invest. This in effect means that of all the quantum of money that has passed through our hands thus far, little, or zilch is ever coming back. They are gone for good. Our retentive capacity is practically zero. It is not hard to figure out why we still struggle financially, after all these years.
Spend below your income
To save, you have to spend below your income. Put some money away, no matter how small. Some folks tell me that their salary is so small it is impossible to save. Your mind has just told you a lie. If you believe you can, you can. You can save 10% of your salary. That is a good place to start. There are needs, real and imagined. It is in the mind. I save close to 50%. Thou must save. It is a commandment for financial freedom. In the coming articles, I will give some tips on how to save. Ultimately, you are the one to work out your salvation.
After saving, you have to safeguard the money. It is not enough to save. If the money is not out of reach, you may end up spending it. In my experience, the safest way to squirrel the money away is to put it in a financial product (bonds, fixed deposits, stocks, etc). I found out that I have to zap the money away before I go back for it. To achieve this “feat”, I use standing orders. My bank moves out a certain amount from my account to another account. I use standing orders with my stockbroker and fund manager. I issue them post-dated checks, which they cash in on a particular day of every month.
Hence, as the money lands in my “holding” account, they present the checks and execute my orders. That way, my money goes into the market on autopilot. I don’t have to be in the mood to invest, I wired up my system to execute it on auto. Looking back, I have invested and grown my portfolio this past year more than I have done in other years when I waited until I gathered sufficient funds to invest.
You can do it
This is just an illustration based on real-life experience. You can save. You can invest, every month, come rain and high water. I know there are questions in your mind “What about family emergencies?” there are different types of savings. The one I just discussed is saving to invest. You can save for emergencies, save for school, save to spend, etc. These will be featured in future articles on this series.
For the present, just let it settle in your mind, that your salary is your capital, not your profit. You are to save it, not spend it. Secondly, you can actually save, if you can put your mind to it. Thirdly, you need to invest what you have saved, to multiply it. Do not look down on what you have, don’t despise it. A leaking faucet can fill the bathtub, if you plug the drain. It is a matter of time. I will build up how to scale down your start-up plans and liquidate some of your investments to start your business. Many multinational companies had a very humble beginning. Do not hide behind the excuse of lack of funds. A journey of a thousand miles begins with a small step.
Despise not, the days of small beginnings.
