When I was a kid, my family lived on a lake in Kansas. Having a large source of water in your backyard comes in very handy when you need to wash the car or water the grass (especially when drinking water comes from a well with a limited supply).
Each spring when the threat of a freeze had passed, my dad fired up the water pump sitting on our dock. It was a fun ritual for me. It meant winter was over and summer was near.
The pump had a pipe sticking out of the top of it with a metal cap on it. The first step to firing up the pump was to remove the cap and pour water from a bucket that dad had dipped into the lake.
That seemed odd to me the first time I watched this ritual. I asked my dad, “Why do you need to pour water into a water pump? Why can’t you just turn the thing on and let it fill itself with water?”
He said, “You have to add water to prime the pump. Without water, it sucks air and that doesn’t generate enough force to suck the water out of the lake.”
I don’t remember whether any of that made sense at the time, but I always remembered that we had to “prime the pump” before I could spray my brother with the hose.
Starting a business is a lot like priming a pump. When your business is brand new, there’s nothing but air in it. In order to start the cash flow, you have to prime your business with at least some cash.
My last blog post was about a young entrepreneur who invested his entire life savings to start a business, not once, but twice! This high-risk approach may not work for you. You may have a family to support, bills to pay, a mortgage, rent, taxes….
Throwing caution to the wind and investing every last cent into your startup is probably not a very smart approach for you. However, that doesn’t mean you can’t or shouldn’t invest in your business to prime the pump.
It’s extremely difficult to start a new business without putting any money into it. I’m not saying it’s impossible, but it’s not easy. Every new business has expenses such as a website, inventory, legal fees, marketing, etc. Marketing is especially important and the most commonly underestimated business expense.
I meet a lot of people with grand entrepreneurial dreams, but without the intestinal fortitude to put their money where their mouth is. They dream of being successful, but they’re aren’t willing to make the sacrifices required to be successful.
One sacrifice that successful entrepreneurs make is cutting back on personal discretionary spending so they have extra money to invest in their business. Discretionary spending refers to all of those little things you buy that you don’t really need. It may even refer to things you really enjoy doing, but aren’t truly necessary, like a gym membership, eating out, or going to the movies.
Entrepreneurship is living a few years of your life like most people won’t so you can spend the rest of your life like most people cant.
Some people borrow money from their 401k, use credit cards, or get a home equity line of credit to fund their startup. If you don’t have a pile of cash sitting in the bank to prime your business, you’ll need to get creative.
Before you make these sacrifices and take these risks, be sure you fully believe in your dream. If you don’t believe it, your subconscious will figure out a way to sabotage it.
The sacrifices won’t last forever…they’re a means to an ends. By making a few sacrifices now, you’ll be able to prime your business so it can start pumping cash.