Was our experience unique? Hardly. Alison Berke Morano, president of bworks.com, a full-service Internet development company in Tampa, Florida, recounts the early days of her business in 1995. "In the beginning, it was all crunch and no cash. Marketing and advertising, as well as starting our Web site, were our biggest investments," explains Berke Morano. "We had to decide what was important and what wasn't. The newest technology: important. New shoes: not so important. But, when cash was really low, we had a few credit cards to fall back on."
After six years, Morano has a thriving business and feels her entire outlook on spending, managing and handling money has matured. "I find that I really watch what I'm doing and plan for the future to avoid 'crunch' situations. I have learned to deal with the stress of running my own business and keeping an eye on the bottom line."
For Catherine Delett, founder of Razzberry.com, an online community for teen girls, admitting she needed help was initially difficult. "The first time I had to borrow money to pay my rent was tough," she recalls. "I had money coming in, but it was less than my expenses at that time. I piled up some serious debt for a while, but that gave me the flexibility to keep things moving. Oh, and I found a great accountant!"
Michael Diamant, president and CEO of iClips, a Web-based messaging service, notes that it pays to reserve cash when you don't think you need it yet. This he learned at his first company, the time he had to chase down past-due accounts to get his employees their bonuses in time for Christmas. "I tend to run my company a little more conservatively in regards to cash," he says. "I don't like to be looking at short-term cash-flow issues and have taken measures to avoid that, by either ensuring that I have the ability to raise additional cash early or can extend credit."
I've ridden the roller coaster ups and downs as the cash has flowed in and out of my company, and I'm alive to tell the story. As Morano puts it, "It's all worth it in the end. It's very rewarding to know you're in charge, taking a risk and following your ideas when you run your own business. When you have to struggle, think of it as the price for having it all."