04 October 2011

Living on a Startup Sized Salary

The biggest reason for Startup failure is under-capitalization. Under-capitalization refers to any situation where a business cannot acquire the funds they need. An under-capitalized business may be one that can't afford their current operational expenses due to a lack of capital, they may be one that is over-exposed to risk, or may be one that is financially sound, but does not have the funds required to expand and meet market demand. Whether the company overspent on the budget or undersold on the product, simply put: They are out of moolah.

We’ve addressed in previous posts the amount of investment a startup takes regarding time. This week we are going to address the amount of investment that a startup takes regarding money. Financials play a crucial role in the direction and ultimately the success of a company and when you are married to an Entrepreneur those decisions have a strong bearing on you and your family.

While money can be a sensitive subject for some and while each marriage differs in how they choose to discuss financial matters, understanding a few key points and principles will help you and your Entrepreneur to open up a strong financial dialogue and align financial priorities. With that in mind we will be discussing the following:

Startup Salary Stats
Evaluating Price vs. Cost
Bootstrapping the Family

So get ready to take a look at your bank account, your spending habits and, yes, even the company's P&L statement. Understanding the above concepts will save you, your Entrepreneur and your marriage, time, energy, stress and, let’s not forget, money.

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