Survive starting a business without a paycheck?

When you start a new company, it is necessary to dedicate 100% of your time and effort to make it successful? How do you do this without a paycheck? Especially if you have a family?

Some alternatives to consider:

1) Working on the startup part-time.

2) Focusing initially on services / consulting, which is usually more predictable revenue.

3) Deferring the startup until you have sufficient savings to be able to go without the paycheck for a while.

All of these are non-ideal and involve some sort of compromise, but such is life.

In their contexts the answers provided make sense, but generally the answer will vary with the scope of your ambition and the required effort to achieve it. When Albert Einstein started working on special relativity he was a teenager, he didn't publish his paper (along with 4 other outstanding works) until he was 26, but that is at least 10 years "in the cave", along the way he worked as a patent attorney after finding it difficult to gain work as a University professor. Now it is probably a stretch to compare starting a business to solving some of the fundamental problems of the Universe at the time, but just as Albert knew he needed time to think about his problems so, does the founding group of a business need to assess how much time will they need to complete their task given limited resources.

That said, I recommend you think very hard about what it is you want to do. Are you trying to enter an entrenched market with some new revolutionary way of solving the problem or does your solution provide an incremental change? Does the solution require building a back end platform or technology to make it go and will you be doing this building yourself? I think more important than just putting your ship in the water is knowing where you are going first, there are many heartbreaking stories of people that started with a blind vision and didn't analyze their resource needs, the difficulties of the vision and the existing market of possible solutions. Front load that research heavily as it ensures that when you do put your boat in the water, you know exactly where you are going and have a high chance of actually getting there.

My personal experience in this matter regards my building a platform for generalized web application delivery called AgilEntity and now using that platform to expose highly scalable and efficient services for business. The difficult nature of the problem required a great deal of time and money that I had secured before hand, make sure to give yourself the time and money to solve your problem in the time frame you a lot yourself to avoid issues.

I'll try to provide some value from my perspective. I'm not in the same situation in that I don't have my own family, but hopefully I can add a bit of creative input.

I currently am working 100% on my startup, and I moved to Buenos Aires, Argentina about 6 weeks ago in order to take my dollar further while getting my startup off the ground.

It is worth mentioning that I do have a twin brother who is helping me with the startup and is providing the capital to pay for rent while we are down here. We just got 15 beta clients two days ago after our first demo, so we are confident in what we are doing.

I guess all I'm saying is that there are creative ways to get by while spending all of your time on a startup. We are moving much faster than if we worked on the startup in the evenings only. We did spin the startup off from my services work (I am one of two technical co-founders, my twin brother is a business generalist). It was VERY helpful to go from the service route. So, Dharmesh's comments are very practical.

Very good question. I'm in a similar situation, where I have a family and a complicated financial picture. The best thing to do is to keep working and earning a paycheck as long as possible while you develop your prototype. Once you have a prototype you need to calculate the financials and decide if you can bootstrap it or need an investor. It's easier to sell a working prototype to an investor than a mere idea.

Leverage your startup idea into your contracting job. My start-up idea is to create a code generator (I know that there are many out there and I have used a fair number of them but never find one that I liked). I developed a basic code generator in 2 weeks and started using it for my contract work right away. This allows me to work on the code generator and still be able to bill some time to the clients for which I am using the code generator.

A year later I am getting to the point where my code generator has a fair number of unique features and is becoming polished enough to release it as a product.

Some companies will make money on day one. Others need time. If yours is in the second category, no matter how much you wish it wasn't true, if you need more money than you have to survive you need to raise money as others have said (spouse, credit cards, part time work).

Years ago, there was a great book called the Rhythm of Business, which basically trashed the idea of the rigid plan-execute formula taught in business schools.

One thing I remember most from the book was the idea that a startup needs to figure out what it needs (capital, staff, resources, etc.) to launch successfully and if you don't have the ingredients needed for the basic formula, think very carefully before going ahead and doing it anyway.

I've been the co-founder of a Canadian small business website for 11+ years. A lot of people seem to think that if they have a "bad hand" (no access to capital, etc.) there must be some way to turn it into a good one. That is a bit of a pipe dream. From what I've seen, one of the biggest differences from entrepreneur to entrepreneur is the innate ability to sell / inspire others. Some people are gifted with this talent. Many are not.

Some people seem to know how to make money. They can start with very little and somehow build an empire. Others who may not be as naturally talented at sales take a different approach, looking for "love money" (family & friends) to help them to get through the early days.

You really need to know yourself. Evaluate your business idea. Find creative solutions that will help you avoid burn-out while still bringing in the money you need to start your business.

Look for ways to bring in the cash in the short term while executing your long-term business vision. It could be consulting, but if that is burning you out, maybe instead you can pinpoint other ways to increase the money you are making in the short-term. For example since you are already dealing with .asp training maybe you could augment your free online community by providing talent-sourcing for businesses (with you making a commission of course). I know a local fitness company that does this effectively. The owner has his masters in Phys. Ed. And has built a network of trainers that go into people's home. The benefit is that he oversees the trainers (the expert who brings quality of service) and he makes a nice commission off of the work of each trainer. He works on the business, rather than in it trying to earn money by working with individual clients.

Also, there are a number of micro-financing options. These tend to be very regional, so you'll need to do your homework to find out what is available.

Others have mentioned consulting, which is good, but has the drawback that you have less time to work on your business. Even better is to partner with one or two others so that while one or two of you are consulting, the others can work on the business. Consulting brings in revenue, which you split, and your business gets off the ground sooner and then you can wind down the consulting.

Could you expand your consulting services businesses to the extent that you could quit your day job? It could be a gradual build up over a period of time. This could give you something to work towards and provide you with a tangible date when you could leave your full time job.

Once you have been able to switch to the consulting side of the business with some time management and task outsourcing you could free up a sizable chunk of your day to begin focusing on the things that you really are passionate about pursuing.

Without a plan it will be really tough to take that leap of faith, especially when you have to take care of a family. Setting a tangible and achievable goal, leveraging on your strengths and skill sets can greatly expedite the process.

Step 1) Get a gym membership so you have a place to shower and workout.

Step 2) Sell everything you own that won't fit in a car.

Step 3) Buy a car you can live in. If you need luxury get a camper, otherwise a truck with a bed shell cover will do. In reality any car with a reclining seat will work.

Step 4) Find a place you can park at night where cops don't mess with you.

Step 5) Find a place with free wifi and work your face off so you can afford an apartment.

If you use this setup you should be able to live comfortably on $500 a month and get by on less than $250. If you can't make at least $250 a month with side jobs, then you're not cut out for the real world and should look into becoming a wage slave.

If you have a family, then this is not possible and you just have to adopt an uber frugal lifestyle.

Essentially, bootstrapping boils down to the following scenarios:

1) Work for someone else for money full time, work on your startup part time

2) Work for someone else using your startup's technology full time, do both at the same time

3) Work on your startup full time.

The desirability and advantage to your company moves from top to bottom.

You want to be at the bottom of the list, but don't discount the middle. It is a very sweet place to be.

I'm running a #2 option play; open sourcing most of my startup's non-differentiating technology, and selling support for it. It's a long range plan for sure, but it's an option.

If you don't have a prototype, you're going to need a month at #3 to build a decent prototype. Pay minimums, get your friends to help you. Those thirty days are crucial.

Keep your day job, or get one if you don't have one. Learn to love Mountain Dew, coffee, and chocolate so you can stay awake and work on your new venture in the evenings :)

I am assuming your startup is in building software products.

Rather than building a product that will have all the features, you could release mini version of the product. This way you stand reach customers early in the product development cycle and can convert them into paying customer.