Set your startup-salary expectations long before launch
RIGHTSIZE YOUR TIMELINE
When you’re getting your company off the ground, you may be squeezing in time at night and on weekends, beyond your regular
9 to 5. But even after you’ve quit your day job, don’t expect to be making anything off the bat. “If someone is bootstrapping, they are going into their cash savings, their retirement savings, their investment accounts,” says David Ehrenberg, CEO of Early Growth Financial Services, a consultancy for startups.
BUILD A CASH CUSHION
Relying on sweat equity alone won’t keep the lights on. Ehrenberg recommends having at least six months of savings on hand before quitting full-time work. The University of Chicago’s Ellen Rudnick suggests socking away closer to a year’s worth of savings to cover a half-year of work with a firm buffer intact, in case the business flops. And check in regularly: At a certain point, “if you haven’t made any progress with the business, you might need to go out and look for a job,” she says.
DON’T BECOME A MARTYR
While building up your business from scratch may require some sacrifices, you can’t work for free indefinitely. “Business owners who want to be successful sometimes say, ‘Hey, we’re making money, but I haven’t paid myself in three years.’ Then you’re not making money,” says Farris. “Paying yourself a fair wage is a way of measuring your progress and making sure the business is providing for you adequately.”