Step 4 of Starting a Business: Finance Your Business


You’ve heard it before: “You have to spend money to make money.” That’s great, but where does that spending money come from in the first place?

When I started my first business years ago, I learned about all my options for securing funding for my business. Not all of those solutions were right for every situation. But when I’d been struggling for months and the money was running out fast, I learned just how easy it can be to make the wrong decision out of desperation. I also learned how unreliable any one source of funding can be. And more so than anything, I found myself in a position I never want to be in again—when the working capital came dangerously close to running out.

A New Level of Stress

There’s a different breed of stress that comes with not knowing how (or if) you’ll make payroll for your employees. Not being able to pay your own bills or provide for your own needs is one thing. As entrepreneurs, we kind of learn to expect that. But not knowing whether you’ll have enough money in the bank to pay your people come payday is a completely separate beast.

I first learned about that years ago, when I was too new to entrepreneurship to properly cope with it. It’s the kind of thing that kept me up at night, haunted my dreams when I finally slept, and caused a constant underlying anxiety that wouldn’t let up, that slowly rose and fell seemingly at random, always silently affecting me no matter what I was doing—whether I was trying to work, relax, eat lunch, run a meeting, read a book, or spend time with friends and family. No matter where I was or what I did, my mind always went back to the figure in the books, that ever-shrinking number of days before my business ran out of money.

It got to the point where I couldn’t think about anything without relating it to that looming number. Every action I took had me thinking the same thoughts: “How is this helping my business?” “Am I actively contributing to my company’s funding?” “What can I be doing better? I need to do better. I need to be better.”

A New Level of Guilt

All business owners struggle at one point or another with feeling guilty when they’re not working. Finding a work-life balance can be so incredibly difficult, especially in the early stages of starting a business, but it’s something we must all deal with if we’re to keep our sanity.

That guilt, just like the stress, goes to a whole new level when it comes to paying your employees. Not only did I feel guilty when I wasn’t working, but I felt guilty when I was working. I could have chained myself to my desk and kept my eyes pried open, staring at my computer screen day and night in a constant state of work, and I still would have felt guilty. Because sometimes, no matter what I did, no matter how hard I worked, it didn’t change the fact that my company was bleeding to death, and I didn’t have a clue when or even if any of my attempts at getting money in the bank were going to pan out. My co-workers, my employees, my family—everyone was counting on me, and I was letting them all down.

It’s a horrible feeling on its own, and it’s even worse when you don’t have a partner in your business—no one to help you shoulder the burden, to share ideas with, to let you vent, and to lie to you when you’re at your worst and tell you it’ll all work out in the end. Somehow. When I first became an entrepreneur, often I felt like I was all alone in the new struggles I faced. It’s easy—and understandable—to get wrapped up in all the negativity. It’s even easier to push your support system away, thinking you have to shoulder everything on your own. That’s a mistake.

Learning What I Can’t Control

It wasn’t until much later that I realized another mistake—this one much bigger—in dealing with all of this. It all came down to control. I thought, as a business owner, I always had control over how much money I made. That’s what everyone told me: if you want to make more money, you work harder. You work longer hours. You sacrifice more. You can always do more to put your business first.

I was already doing everything I could, but like everyone, I was (and still am) at the mercy of things outside my control.

Client work is an example. Having a steady stream of well-paying clients is always the best way to get money coming into my business: I get clients to sign contracts and pay me for my services. What more could I ask for? But no matter how hard I try, I can’t rely on an ongoing supply of client work. Being in a business that provides services to other businesses, I’m often at the mercy of my clients’ work calendars, project budgets, and bureaucracies. Even with contracts and due dates in place, I can’t control when my clients will pay their deposits. I can’t force them to honor agreements made. And ultimately I can’t do anything to make them process my invoices any faster.

Sometimes the client work dries up for a bit. It’s cyclical, but it can also happen at any time, seemingly at random. And if I’m not constantly planning and preparing for the times when I don’t have contracts being signed and invoices being paid, I suffer dearly. It’s something I can try to prepare for, but it’s not something I can control.

Nor can I control what other people are going to do. Like the investors who backed out at the worst possible time. Or the venture capitalist who strung me along for a while before I finally recognized the scammy red flags and dropped contact. It’s heartbreaking to learn that all the weeks’ or even months’ worth of time, energy, and focus you’ve spent on trying to save your small business has been for nothing.

That was a particularly dark time for me, and for my small business at the time, because all my proverbial irons—the various routes I’d pursued in an attempt to fund the company during a tough spell—fell through all at once.

I was in a difficult place where client work was slow, payments from a previous loan were killing me, and before long I would need a pretty decent sum of money in order to get my head above water. I did everything the way I was supposed to do it: I researched my options, and I pursued several that I thought were right for my business. I did this all while trying to land bigger contracts, in addition to taking on smaller jobs in an “every little bit helps” mentality. In short, I put all my eggs in many baskets, certain that something would pan out. There was no way all those roads would lead to nowhere, I thought. Everything would be all right. Right?

Wrong. I got one disappointing message, statement, email, and letter after another. It was one of the hardest, most stressful times in my memory of being a business owner, as all my options fell through in rapid succession.

Moving Forward

In business I always remind myself to move on and move forward when something doesn’t work out. This was an especially tough set of circumstances to move forward from, but I’m glad I didn’t give up just then, tempting as it was. Because in the end, what saved me was just as far beyond my control as everything else: out of the blue, a client called my team to accept a proposal we’d prepared for him almost six months prior. We didn’t hear anything back when we initially sent it off, so I’d forgotten all about it. Then, we got the phone call. That random, life-saving, eleventh hour phone call.

The job wasn’t huge, but it was just enough to get us through until another project came in. Then another, and another. The client work picked back up. Bigger and better jobs came through. The company was finally on its way to a long and slow recovery. I got shards of my sanity back as the endless stress, guilt, and anxiety lifted. The dark days, it seemed, were finally over.

The True Cost

Though there is plenty about my business that I can control, I now understand just how much is out of my control. In trying to make money and fund my business, I made the mistake of dwelling on those things I couldn’t control. The result—the cost—was that it took a toll on my health and happiness for a long time. So it’s true that you have to spend money to make money, but if you’re not careful, the cost will be much higher than you might have bargained for. It certainly was for me.

I’m no longer with the aforementioned company, but I’ve carried all those lessons with me to my current one. And while I’m not immune to the fear of finding myself back in that position again as I work constantly to keep the money coming in, I better understand just how important it is to keeping moving forward, instead of dwelling on what can’t be changed. Every day I remind myself to keep doing what needs to be done, focus on what I can control, manage the inevitable stress, and move on from the rest. And I’ll keep reminding myself of this until it becomes second nature.

The cost, if I can’t do that, is simply too high.


About Author

Robin Karleskint

Robin Karleskint has worked at several new businesses, both as an owner and an employee. Currently she is a project manager at Cosmital Designs, a company she co-owns in Orlando, Florida.