A Start Up Lesson from My Grandmother
I recently spent five days in Florida with my 92 year old grandmother. Each night we had our routine: movie, dinner, and of course home by 8pm. And at each dinner she had a habit which I think is a good lesson for anyone considering a start up.
We would sit down. She would immediately reach for the little box that holds the sugar packets. She would shuffle through them with purpose and urgency. Why was sugar priority #1? The first night I wondered too.
Turns out that when my mom visits, she likes Splenda. But my grandmother drinks her coffee black. So she never buys Splenda. And why spend a few bucks when you can get it for free? So each dinner was a chance to stock up. But my favorite part is that my mom just visited, meaning she won’t be back for at least six months. My grandmother is planning months in advance to avoid spending just a few bucks.
Having spent the last five years starting and building an organization — three of those in a terrible economy — I use my grandmother’s sugar search as a serious example of the financial mindset start up leaders should prepare to embrace (both personally and organizationally).
I don’t think this is necessarily right or fair or reasonable. But it is the potential reality. I’ve heard many other entrepreneurs say “prepare to go broke” if you launch a new venture. Hopefully that doesn’t happen. But every dollar counts and every way to save money should be done.
During the early years of my organization I joked with a friend also starting a new venture that we should go eat Costco samples for lunch. A few free lunches, free sugar, sleeping on couches when you travel, taking Bolt Bus instead of Amtrak, etc. add up to make a huge difference. It could mean another month you can afford a salary, launch a new program, or attend a critical conference. In other words, giving up some comfort and convenience to increase impact. Plus, this sends a good signal to others about your commitment and financial management abilities.
Here are some ways I’ve personally and organizationally saved money:
- Find donated office space or work from home. Use public places for team meetings and interns.
- Hotels are a last resort (no pun intended). In five years, I’ve traveled roughly 200 nights but spent less than 20 in a hotel. Use Facebook to find friends where you’re going.
- Turn limited resources into an “asset” for pro bono support and discounts. People want to help and if you explain you really want their help and would appreciate some of their time, most will say yes — lawyers, accountants, etc. And with vendors you have leverage: either they come down in price or you can’t afford them. They know this (if you tell them). You’re not being cheap — you have no choice. Use that as an advantage.
- Get a friend who works at a big company to make your color copies. Kinkos is a buck per page which is a ripoff. But you want to look good.
- Speaking of Kinkos, it always has pens and paper clips to take in their copy stations.
- I rarely ate out. 10 dinners at $20/each = an entire month of meals from the grocery store.
- No Starbucks. Cost of 5 large coffees ($10) = about 40 cups if you make it at home. Over the course of a year, that’ll save about $400. That’s 15 days of rent, a week’s pay, or the cost of a plane ticket to an important conference.
Hope the extremes of this list aren’t necessary for long for any start up. But even if it’s overly cautious, you’ll just have more money saved to execute your organization’s mission. Or to buy sugar.