Understanding Money

Most people think that to start a business you need a lot of money. I have learned that is not necessarily true. I started my business after getting fired from a major corporation. I had a family to support and a house to pay for. Since it was my creativity that got me fired, I decided to make that my business - and my business has lasted thirty years.

I teach graduate students and several years ago was asked to teach the theory of American Entrepreneurship to students in Russia.

Each student was given two U.S. dollars to invest - worth several hundred rubles at the time. For two weeks we worked with them, teaching them business basics, while they thought how to grow their start-up capital. It turned out we were surprised at their creativity.

One student found a copy machine, copied one of the crisp one-dollar bills we had given her, then sold advertising space on the backside of the bills to local merchants. The copies were then distributed around town to be picked up by the citizens. Her business was successful.

Another student bought quarts of vodka from a market during the day for 35 cents then sold them after the stores closed for $5 each, repeatedly reinvesting her two dollars and growing her business.

Another student baked wonderful nut cakes and sold them piece-by-piece!
I was so pleased with the results of this class that I continue to use that same teaching exercise with my MBA classes here in the United States.

During the first semester, we visit a local dairy store. I give each team of students $10 to purchase whichever product they decide their team would like to improve. Those products become the team's semester project. Each group then develops their product. They have lots of creativity but little money.

Your business can be started in the same manner - with an idea. Then work toward turning that idea into a product or a service.

Think in small increments with success, whether that is financial independence, or selling or licensing your product, as the end goal.

If at all possible when you start your business full time, it would be best to have a couple of month's personal expenses put aside. Unless you are one of a select few, you won't be an overnight success - but you should keep trying, and that is where the extra expense money will come in handy.

And always keep in mind: make money before you spend it. Keep your expenses as low as possible until you have either a commitment or actual money in the bank.

There will always be those who will tell you not to go into business for yourself, that you will not make it, that the economy is too bad right now, but don't listen to them.

I learned that even in Russia, where those students had nothing to start with and no experience in business, that their creativity and determination turned them into successful entrepreneurs!