I've decided that I will not leave my full-time job until my startup is funded. By Brittany Haas (Founder, Happily Ever BorroWED)
As I meet with more and more potential investors, I know the first question is "Why are you raising X dollars? What does it go towards?" The underlying and sometimes second question is "What will you pay yourself?"
I was watching an episode of "Shark Tank" a few weeks ago, and one of the people pitching COULDN'T answer that question. He said "I'd be comfortable making 6 figures." Yes - well wouldn't we all. However, #startuplife is not about 6 figures. It's about bootstrapping, it’s about drive, and mostly it’s about budgeting.
While I still remain working full-time, I can say that I still am on a strict budget, and a majority (ok... all) of my savings have gone towards business expenses. Do I still have debt? Of course. And when I eventually take the leap and leave my full-time job for my second full-time job (Happily Ever Borrowed is NEVER a part-time job), I won't have savings. I'll have even more budgeting to do!
I've decided that I will not leave my full-time job until I am funded. Some investors may scoff at this - but I'm a practical person. This is not because I'm not a risk taker. Emptying my 401K and life savings to start HEB was a risk. Putting every extra cent I have towards my business, is a risk. And this business might not be here today if I hadn't continued to work and put all of my extra income towards it. When I look at my expenses from the past year I am AMAZED at what I've spent.
There are times when I say, "WHAT AM I DOING?" This is tens of thousands of dollars that I could have bought multiple handbags, vacations and clothing with! But I'm investing in myself. I'm investing in my business. I'm investing in my future, even if the return does not seem so great right now.
So let's break it down together so I know how much I will pay myself when I get funded. This is quite personal - who else is going to show you this?
Rent - $1850 (a steal for a studio in NYC might I add...)
Utilities - $60 (I don't have cable... huge savings)
Student loans - $172.47
Computer Payment Plan - $92 (5 more months to go here)
Food - $369.28 (This was from February... a short month)
Transportation: $199.65 (Monthly metro card + taxis + train rides to LI to visit the family)
Misc - $443.33 (Shopping, Toiletries, Book addiction etc.)
TOTAL: $3186 for the Month of February.
OK - So let's add an extra 2 days for an average month - $3406.
So $3406 x 12months = $40,869
Let's add in $5k for emergencies - extra trips, unanticipated costs etc.
GRAND TOTAL SALARY: $45,869
I consider this to be extremely reasonable, and actually, quite comforting. Mind you, this is with me saving NOTHING for my future. However, if that emergency fund doesn't get used, straight to funding it goes.
What's even MORE shocking to me is this is A LOT less than what I get paid now. While I won't disclose that number, this means that I can potentially put a lot more money towards my business while it still can.
Staring May 1 - I'm going to put myself on an extreme spending diet. (Maybe I'll physically diet as well... food costs money) I'll track it all with you, together - and we can see how I cut my costs week by week. Note – my company’s employee sale is during the month of May....we'll see if I survive.
Editor's note: Got a question for our guest blogger? Leave a message in the comments below. Photo credit: TaxCredits.net About the guest blogger: Brittany Haas is Founder of Happily Ever BorroWED (formerly Something Borrowed NY). Always drawing and designing, she graduated from Cornell University with a degree in Fiber Science & Apparel Design. Upon graduation she decided to learn the business side of the fashion industry. Since then, she’s gained experience as a financial merchandise planner and now brings her business savvy to the bridal industry. Follow her on Twitter at @brittanyhaas.