[VICTOR V. BUBUIOC] The Frugal Entrepreneur: A Lean Start.

[BUBUIOC INC.]

Starting your own business can bring about many rewards and opportunities. Unfortunately, for most of us, these don’t just fall in our lap. More often than not, there are many challenges we have to overcome along the way. One of the likely challenges most entrepreneurs and self starters will encounter is funding. Funding will subsequently be followed by the need to generate positive cash flow, the lifeline of the venture. Hence, the success of an entrepreneur is defined by his or her ability to effectively convert / leverage available skills & resources into something more. But, you already knew that. Right?

The funding/resources component, generally, correlates to the scale of the venture. Thus the larger the undertaking, the more resources and skills are needed. This is all pretty basic and easy to understand. However, there is one aspect of resource allocation that is usually overlooked. Frugality.

In a recent interview with Mr. Paul Solitario, Managing Partner at Cerium Capital LLC, I had the opportunity to gain some insight into Small Business and Entrepreneurial Funding. Mr. Solitario is somewhat of an expert on the subject. He has started various ventures of his own and also has extensive experience in Angel Investing and advising. We discussed various aspects of starting a business and the relating funding elements. Most notably, Mr. Solitario touched upon the subject of frugality “Frugality is extremely important” he maintained. According to him, frugality, and or lack of, tells lots about the entrepreneur and his/her priorities. It is a reliable measure of how likely the venture will succeed.

Indeed, frugality makes sense. This is especially true for startups. Frugality is particularly important in the beginning but should be maintained throughout the life of the venture. Think about it. When possible, why not choose home garage over office space, push-mower over riding-mower, old PC vs. new Mac? All these amount to great savings.

The implications of being frugal carry a long way. Among these, you have the ability to: start on your great idea right away, increase margins, reduce cost, and of course, become cash positive faster. Cash flow can be a psychologically encouraging assurance of success. It is the light at the end of the tunnel. Also, as mentioned above, it is the sustenance of your venture.

Implementing new and easily available technologies can translate to huge savings. Consider Skype for the long distance calls. Perhaps freeware such as Google or ZOHO can substitute traditional but costly office software. Depending on what you do, there are many other ways new technologies can help you become leaner. They are easy to find and adopt. We all know that change is inevitable. Why not embrace it?

Being frugal goes above and beyond “saving paper clips”. Instead it asks for a complete change in the status quo. Being frugal asks to act upon the important question: How can we change in a way that really makes a sustainable difference? It is the complete revamping of business as usual. One easy example is to eliminate “that’s not my job” attitude. Cross training employees can be extremely effective in accomplishing this change in behavior. It is not unusual for individuals in small organizations to wear many hats. This is significant for most small businesses, and especially important for young startups.

Frugality is not a new idea unfamiliar to you. Unfortunately, it is an underused and merely forgotten practice. The idea is to remind us how wise it is to do more with less.

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Posted By BUBUIOC INC. to VICTOR V. BUBUIOC at 5/28/2013 03:29:00 PM