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Your Taboo Money Perspectives

Ever since the pandemic, more and more people are saying goodbye to limited flexibility, too-low salaries, toxic workplace cultures, and bossy bosses, all in favour of starting their own business.

Anecdotally, we’ve been speaking to a lot of friends about wanting to start their own business. But it turns out this we’re not alone, with millennials and Gen Z accounting for around 63% of business transaction account openings in the 2023 financial year at one Australian bank.

Whether it be the cost of living crunch, or the growing desire of younger generations to reject the traditional “9 to 5” (sorry Dolly Panton, the song is losing relevance!) and have greater autonomy and independence over their lives, our generation is turning more and more to starting a small business or a side hustle.

The truth is, starting a business is hard work. But many young people are asking themselves: why work hard for someone else when you can work hard for yourself?

If you think this is the right move for you, Lucy Wark laid out all the things you need to think about on this week’s episode of You’re In Good Company - from building a business plan, to how to gradually invest your money in a way that it proportionate to the scale of your business, protecting you from going “all in” and losing. This episode is a must-listen for all budding entrepreneurs.

And now we pass the mic to our community! We asked you for your experiences: how much you’ve spent starting a business, the unexpected costs, the most worthwhile investments, and the feelings of isolation that can creep in along the way.

How much has it cost you to start your own business?

You’ve got the kick-ass business idea that’s going to allow you to bid farewell to your boss. Your business plan is in order, and you’re clear on your strategy for how you’re going to turn your idea into a cash generating machine! But getting a business off the ground requires some dollars to get you started…

Most people start their business using their own money - in other words, they don’t take out a loan or get investors involved right at the beginning. This is called “bootstrapping”. And so we asked our community, how much did you spend getting your business off the ground?

It’s important to note that bootstrapping does have the potential to really put the pressure on your finances, especially if your business isn’t generating income straight away. Enter the importance of your savings!

Some recommend two years worth of your salary as a helpful benchmark, but this really depends on your personal situation and choices. This is an important one to think through, because you want to be able to make the right choices by your business to put yourself in the best position for success, and if possible, you don’t want your personal financial position or money-related stress to get in the way of that.

This is why budgeting matters when you’re bootstrapping your business. Listen to podcasts (like this week’s ep with Lucy!) or read startup business books, such as The Lean Startup, to get across all the costs you should be thinking about, and be clear on how you can make your money best work for you.

What’s the saying? A failure to plan is a plan to fail.

One final hot tip from a community member who recently started her own business…

What have been some of the most worthwhile expenses?

Being an entrepreneur is often about getting value for money.

One of my favourite podcast episodes of all time is the Diary of a CEO interview of Bumble co-founder Whitney Wolfe-Herd. The reason I love it so much, is Whitney shares all the scrappy and creative ways that Bumble built a user-base in the early days, all with little to no money. Whilst some things it’s important to invest in, others creativity can be a fun and exciting substitute.

So where is it important to invest your hard-earned dollars? To be successful as an entrepreneur, it’s important to be well-informed. Chances are, you’re not a finance and/or legal expert (if this is you, you’re winning!) - whilst these can be hefty costs to outlay in the beginning, they can become super important down the track.

A close friend and mentor always tells me, get your contracts right in the first place, and you should never have to look at them again. But the peace and mind knowing that the financial and legal aspects of your business are in order is hugely important and can protect you from much larger costs down the track.

Depending on your business, it may not be necessary to go all out on this right at the beginning. However, getting across the nuances of your particular business is important for making key decisions.

On a similar note, when we asked the YIGC community what they’ve found to be the most valuable investments when starting a business, spending money on up-skilling yourself was one of the most common answers.

For us building You’re in Good Company, community is a huge priority. We were reflecting the other day on what some of our best memories are with the pod, and it is without a doubt the live events where we are able to bring the community together to meet people, and allow our community to meet each other! Whilst these events cost money, the upside for our business definitely justifies the dollars.

Have you felt isolated by the financial side of starting a business?

We wanted to discuss this question, not to scare anyone off from the challenge of starting their own business, but to help people realise that this is a very normal part of the experience.

If I’ve learnt anything over the past 8 weeks of doing our taboo money conversation series, it’s that realising you’re not alone in your experiences with money, is hugely helpful and productive. Because money isn’t spoken about freely, it can feel incredibly isolating. We are on a mission to change that.

Of those who have started a business, 61% of our community reported feelings of isolation when it comes to their finances.

Reading this statistic reminded us of the iceberg analogy of success. The illustration emphasises all the things that go on beneath the surface, which create the success visible to people on the outside.

Often the journey of founders is not all that it seems on the outside… It’s the messy middle that creates the true success. It’s the unseen hours, late nights and early mornings, crises of confidence, isolation, and failures that make you that much stronger.

That wraps up our taboo money series for this season! We’ll be taking a few weeks off the newsletter, but please get in touch if you have any guests you’d love to hear on our next series, or any topics you’d like covered.

We hope this series has been a catalyst to start your very own money conversation.

Mads and Soph x