I got a taste for what it feels like to be my own boss when I converted my first home to a rental property back in 2006. Seven properties later and I have a nice, steady stream of (mostly) passive income and I've learned how to (mostly) automate everything so that I don't have to spend too much time tending to my properties.
So, it's time for the next challenge. I am definitely taking a frugal approach to starting a business. There are two theories about what works.
- At my old job, we spent tons of money during start up to raise market awareness and build our business. It worked just fine, but our founder had deep, deep pockets and was willing to invest a lot of money before the company ever saw a profit.
- The other philosophy is to grow slow, watch your pennies, and never overspend. Had homeowners in the last ten years lived beneath their means by buying less house than they could afford, the housing crash would have been avoided.
I prefer the second option. More specifically:
- For expenses that don't directly affect our customers, we will be lean and mean.
- We will limit our exposure so that if the company fails, our personal assets are not at stake.
- Our salaries will be coorelated directly to our cash balance in the bank.