Friday, 15 December 2006

Save Like Scrooge & Give Like Santa

Mark Evans has a post that talks about the then (doc com boom) vs now (2.0). While I agree with some comments that it's not all about the furniture (which i don't think is what he was trying to say) I do think that the mentality of most start-ups these days have changed on both the save and spend side. Some of the insights we have garnered over the last year are found below.

On the "SAVE LIKE SCROOGE" side:

1. Find as much "Free Money" as you can
Gov't grants like IRAP and tax programs like SR & ED will garner us in total about 100K, which are crucial monies for a start up our size.

2. Get a high interest savings account
We have the bulk of our investor money in a high interest account and only move money into our operating account the day before payday. It might not be huge money, but it’s the kind of cash that allows you to hire the extra help when needed or give a little holiday bonus money to your staff

3. Find programs that are there to help entrepreneurs

We have our offices at the TBDC which saves us rent, gives us access to services we couldn't afford on our own and puts us in an environment that is full of like minded start-ups

4. Choose your law firms wisely

Our greatest expense after labour is law fees. I actually think this one is so important, I am going to write a posting on the weekend about it. So I'll leave it simple for the moment.

5. If you can DIY, then DIY

Mark talked about the Aeon chairs of the .bomb era. I had to laugh because we actually built our workstations at our office ourselves with 2 by 4s and industrial opaque plastic glued on as dividers. Total cost $400.00 for 6 workstations (not including chairs) and they look pretty great if we do say so ourselves.

6. Define criteria for yourselves for "must have" vs. "nice to have"

This might seem obvious, but it gets really blurry really fast. Ask yourself this question on an on-going basis but remember, if it impacts the product or your deadline, it's a must to have.

That segways nicely into my "GIVE LIKE SANTA" Side:

1. I repeat, define criteria for yourselves for "must have" vs. "nice to have"

As the keeper of the purse strings I am probably the worst for scrimping when I should be spending. Our first Alpha release was late and shouldn't have been but I was more concerned about dollars than sense. Lesson learned.

2. Some furniture shouldn't be DIY
I laughed at the comments in Mark's post about programmers and chairs. This was the one area we didn't DIY. If you don't want the staff at home on Robaxacet, buy them decent chairs.

3. Ahead of your burn rate? Bonus, bonus, bonus
Large companies don't usually do this so why should we? Everyone who works with us has taken massive pay cuts to be here. They believe in what we are doing and what we are trying to accomplish. If you managed to save money on your burn, you probably did so because your team did some jobs that were beneath their skill sets and worked their asses off during the year. They should be rewarded.


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