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Airbnb, like most startups, had a rough start. Rejected by investors and strapped for cash, the founders had only two choices - raise some funds or fold up. It is clear which option they choose since the company has become a household name worldwide. But, most people don’t know how the founders survived what is easily the most critical phase of any startup.

In the words of Fred Wilson, it was a “Pure Unadulterated Hustle”

The founders of Airbnb showed such creativity and resolve that their story inspires future founders. But aside from raising funds, entrepreneurs should also know how to manage funds.

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Here are five (5) tips to follow;

Be Creative

The founders of Airbnb demonstrated two skills that guaranteed their success in the end. First, they showed creativity by looking for other ways of raising money to sustain their business without going into debt. Most founders develop tunnel vision and become so focused on growing their business that they fail to think outside the box. Instead, they keep borrowing from their credit cards and in a short time, they have managed to amass a huge debt. This affects their personal life and business as well. 

Your business has time and can always recover, but when you run into so much debt that you can hardly take care of your daily needs, you end up risking more than just your business. In essence, you have to come up with creative ways of raising capital other than dipping your hands into your credit card or relying solely on your savings because these are not sustainable. 

Every penny counts

Apart from their creativity, the founders of Airbnb also showed remarkable self-control by being frugal. This helped them to save more and have enough money to sustain their Startup. The more you have in savings, the more you can sustain the business, and the greater your chances of success. If you are not frugal, you can run into money problems on a personal and business level. So many business owners have had to close up shop because they mismanaged their finances.

At this point, it should be clear that Capital is the lifeblood of any Startup. You may have a one-in-a-million business idea but if you don’t have a one-in-a-million money management habit then it’s just a matter of time before you join the host of other founders who have great ideas but poor financial skills. We are trying to say that you must learn to cut your expenses as much as possible and here are some suggestions that might help you. 

Use free products

Except when necessary, you don’t always have to opt-in for the premium versions of products like office software. A subscription would come with more benefits but if the free version serves you well, then consider skipping the monthly subscription. And since we are talking about free products, one way to cut expenses is by not being in a hurry to acquire an office. 

It’s a huge investment and yes, having a company office sounds better than being in a garage or converting your house into a small office. But then, it also means spending a huge chunk of your capital that should have gone into product development. Other options are available if you want an office space but do not have the financial resources to acquire one. 

Shared resources 

One of the best ways a new firm can save some money is by sharing resources. Coworking spaces became popular for a reason, and that’s because they provide a comfortable environment where your employees can work and have access to necessary office resources at a low cost. Coworking spaces are best for Startups that want to expand their team but have no money for an office yet. They aren’t free but are a lot cheaper than office spaces.

Find a Venture Builder

Venture builders are more than just investors, they’re a lifeline that Startups should have. The reason is that Venture builders do not just provide Startups with seed capital and watch them squander it. They also assist in the form of shared resources like coworking spaces and skills like financial management, communication, and marketing strategies. Venture builders are the complete package, and having a venture builder on your side could be the difference between having thousands of dollars in debt or having thousands of dollars in savings.

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That’s all for now folks.

Until next time, stay inspired and keep chasing your dreams!!!

Cheers,

Alex