Don't run out of money
If you want your business to survive (and grow), one thing that you cannot do is to run out of money.
In business, you can make a lot of mistakes. And ideally, you can recover from a lot of them.
It may sound like a silly thing to say, but if you are reading this, it's probably true for you too: one mistake that you cannot afford to make is to run out of money.
The problem is that we usually want everything to be perfect from the start, and we want everything done fast too. And we often forget about the simplest thing: being able to operate.
Know your budget
Even if you are working for a huge company, you still probably have a budget. Maybe it's just me, but it's hard to imagine someone with unlimited funds.
And as a decision maker, even your goals and objectives are subject to your budget. That's just how it works.
You can always dream, but you need to start building things that you can actually do. And then build on top of that.
You would think that "not running out of money" is obvious, and maybe it is, but the obvious can also be elusive sometimes. And having a plan that doesn't even consider the possibility of running out of money is a huge mistake.
It's the most frequent business-destroying mistake that I've seen, by a wide margin.
So, unless you have infinite money, you need to know your budget and plan accordingly.
Use your budget wisely
Knowing your budget is only half the job. The other half is spending it on the right things, at the right time.
It's tempting to spend money the moment you have it. A new tool, a new hire, a new feature that "will definitely pay off". But every dollar you spend today is a dollar you don't have tomorrow, and tomorrow always comes.
Before spending, ask yourself: does this bring me closer to surviving and growing, or does it just feel good right now? Not every good idea deserves your money right now. Some of the best ideas are better left for later, when you can actually afford them.
It also helps to keep a buffer. Things will cost more than you expect, and they will take longer than you expect. If your budget doesn't leave room for that, it's not really a plan, it's a bet. It does not matter how much time you spend making those estimates, estimates are guesses.
Learn to defer
Defer is a word that comes to mind when I think about this. It means to delay something, and in this case, it means to delay spending money on things that are not essential right now.
In software architecture, we often look to "defer decisions". What this means is just keeping doors open.
It's often too easy to commit to something before even knowing if it's really worth it. Instead, the "secret" is not to try to do more, but to try to do less. Less, at least for now.
This also means that you should focus on the things that are essential to your business, and defer the rest. You can always come back to them later, when you have more resources.
Cut out the non-essential
This also means that you need to make decisions, you need to prioritize, and you need to be willing to say no. Not everything is worth your money, and not everything is worth your time.
The more you do only what's essential, the more you will be able to survive and grow. And the more you will be able to do later, when you have more resources.
So the question is:
- How do you grow and thrive without running out of money?
- Then, and only then... how do you get to a point where you can afford to do more?
And often, you need to find ways to start testing your market as early as possible, and bootstrap your project as early as possible.
Perfection is not achieved when there is nothing left to add, but when there is nothing left to take away.
- Antoine de Saint-Exupéry
And in case it was not clear, this applies to software development projects too.
Most software development projects have a huge impact on the business, either by failing or succeeding. Even with AI, high quality software is not cheap.
So if you don't budget, and learn to manage your budget wisely, you will run out of money, and your business will fail.
Sadly -but also, luckily-, it's as simple as that.
If you are starting or about to start a new software development project, you may want to take a look at my quick guide: