Lovability: How to Build a Business That People Love and Be Happy Doing It by Brian de Haaff

Author:Brian de Haaff [de Haaff, Brian]
Language: eng
Format: epub
ISBN: 9781626344044
Publisher: Greenleaf Book Group Press
Published: 2017-04-24T23:00:00+00:00

More discipline

When you have lots of cash on hand, you will be tempted to spend it — even when it is not yours and comes with crushing expectations. The burn rate — the rate at which a company’s spending exceeds its income — for venture-funded startups is always higher than for bootstrapped companies because the money is intended to be spent to fund future growth. That can breed recklessness, and reckless spending kills companies.

Virtual assistant startup Zirtual raised $5 million only to abruptly shut down in August 2015. Former CEO Maren Kate Donovan explained that once the company switched from using independent contractors to hiring more than 250 new employees, the burn rate went through the roof. A hardto-believe glitch in bookkeeping was blamed for failing to flag the out-of-control spending until the money was all gone.12

When you are responsible for every dollar, you watch every dollar and you are less likely to spend anything that is not absolutely necessary. You cannot have a burn rate for very long . . . because you do not have a lot of money in the bank to lose.

Bootstrapping forces discipline, and not just the financial kind.

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