Running a Startup the Need-Want Way
I am not writing this post because they’ve been saying that the economy is recessive. Need-Want Way has nothing to do with cost cutting or wise investing; it is more like a talisman or a lifestyle that anyone should adhere to no matter how good or bad the economy is. Its sole aim is to help build a culture of wise spending and basic economics in one’s life. Such a skill is also required in a startup because while running a startup one should learn to differentiate between a need and a want.
Running a startup requires more than just being frugal. As a bootstrapping entrepreneur you will often find yourself in a situation called “Should I or Should I Not” – and the dilemma is worst when you are stuck with the decision on whether or not to ‘buy’ something. Every ambitious entrepreneur behind a startup dreams of a plush office which is fully staffed with best talent and has the best infrastructure for the team to work in to make the right impression in front of the clients or customers. And those dreams may even make him want to have the latest PDA, an Armani for the conference and a Ferrari – all just to make the perfect impression. Now that is something he would ‘want’ to have but not neccesarily something he would ‘need’ to run a successful startup.
To be honest, there is nothing wrong in having such desires, afterall, everyone has the right to desire. But when you are an entrepreneur you should know what and when to buy and how much to spend. To buy in a startup means a cost, an outward cash flow, a loss, an expense. This however is not always true because the whole idea of entrepreneurship houses on a hope of return on investment which in itself is an “expense on nothing” to begin with. But to ensure a 25th anniversary for your newly started business you need to learn how to spend wisely. And living by the need-want rule will make it easier for you to make the right decisions for yourself and your team.
What is the need-want way of life? What is the need want rule?
Whenever you are confronted by dual thoughts on buying some thing, evaluate the urge as a need or a want. If that something is your need then buy it, but if it’s a want or merely a desire then don’t.
Turning a small startup into a big business is about fulfilling all the right needs; desires and wants can be fulfilled when you’re big.
How to know if the urge to buy is a Need or Want?
The demarkation between a need and a want is blurred and both of them overlap at certain instances of life. But there is a way in which you can differentiate between the two:
1. Want is short-lived
When you think you need something really bad then don’t be impulsive. Wait for sometime and try concentrating on business goals. A week spent focused on business goals will definitely give you an insight into what you real needs are. If the urge dies out, then you will have found the right solution to your urge.
A dire need will keep pinching your heart even when you have tried avoiding it by trying focusing on business goals. If that is the case then go ahead and buy that for yourself or your team when you have enough money.
2. A need is replaceable, wants and desires are not
When you’re really in need of something then you tend to innovate, i.e. try to find a cheaper alternative that best solves that need. Desires don’t let you go the alternate way. When you want an iPod for music because it has cool features and extensive storage, then you don’t want to use your Sony Ericsson Walkman Phone with extended memory.
We tend to stick to desires because they mean accomplishments to us. When we fulfill a want or a desire we think that we have achieved something – a happy moment in life. Wisely spending on needs will help us reach those happy moments. So if you think the latest Cannon “Printer Scanner Copier Fax” is what your business needs then do give an alternative a chance; a cheap fax machine and an inexpensive Epson printer could be a solution.
3. Needs are everyone’s
Do a quick dip stick within the team and have everyone’s opinion on whether they feel the same way you feel for buying something for office. If everyone (e v e r y o n e) thinks as you do, then go ahead and bring that accessory into your office.
That is the beauty of working in a startup – you can have everyone to put forward their opinion. It would also make your team feel great about working with your organisation.
4. Wants hurt later
Budgets are generally tight in startups and anything your regret buying later on could just have been a want. When you’ve spent on a need then that usually does not hurt because you did what everyone else needed.
Do let me know if the above rules help you in taking the right decisions for your startup. Sip this curry , spend wisely on gifts and office accessories in the holiday season.
No related posts.
Comments
2 Responses to “Running a Startup the Need-Want Way”
Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!
That’s a nice one.
And one is being wise and bootstrapping, one would often come across more creative ways of achieving the same results as an expensive in your face solution would cost.
Its no surprise when you hear some of the successful entrepreneurs say “Some of the best years of their lives were when they were bootstrapping and being conservative on spending. They all have super fond memories of them.” (Its all in retrospect, of course!!)
-Que
[...] business. BTW, here are some good, recent articles from other blog sites about this topic: A) From ConceptCurry.com and B) from the Bootstrapping blog (this one is about looking large on a budget, but it’s the [...]