Money Management Skills Entrepreneurs Learnt From Their Mothers
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Recently a lot of emphasis is being given on how entrepreneurs manage VC money. It’s often said that money management, manners and cleanliness are skills that are taught to us by our parents in childhood. We asked a couple of entrepreneurs what were the money management skills taught to them by their mothers and whether they adhere to those rules today.
Bargain to the teeth
Buying the right thing at the right price is important as an entrepreneur. One must be able to make financial negotiations on purchases. “As entrepreneurs, we make sure that we bargain hard for every purchase and hire we make. We also stick strictly to our quarterly spending plan,” Aditya Agarwal, Founder, Wealthy.in said.
“Every time we went to buy something with my mother, whether it was vegetable in a vendor shop or a jacket in a big shop, she will always negotiate and will come out as a winner. After every success she used to say whatever we are able to negotiate is our saving,” Arun Bhati, COO and Co-founder of Orahi said.
Spend but don’t splurge
Entrepreneurs today are criticized for over spending. Discounting and splurging on offers in order to woo customers are business strategies that have proven to be disastrous for the ecosystem.
“My mom loves the old saying 'money doesn't grow on trees' and her advice was always to be frugal with business spends and to think of the larger picture before blowing money in the short term. This is particularly good advice as entrepreneurs since we can sometimes get carried away by the need to spend money fast,” Vikram Ahuja, founder of Byond Travel said.
I was taught to spend money judiciously, ultimately, neither bootstrapped nor should funded startups be burning cash, Bhairavi Madhusudhan, Idea Cultivator & Co-founder, back2basics farms said.
Keep your expenses low
Costs of running businesses and cash burn have been a crucial metric for investors, who are always on the lookout for businesses with attractive unit economics. In early years, managing canteen bills and birthday gifts with our monthly “pocket money” had always been a tedious task. Early money management lessons have proved to be valuable tutorials for entrepreneurs.
“My mother was always very circumspect in handing over any pocket money and would ask for a detailed budget and spend plan - what are you going to buy, what stores you're going to, and the tentative price range,” Samar Singla, Founder of Jugnoo.
“My mother said that very small expenses can add up to significant amount,” Voonik founder Sujayath Ali said. However, we also solve for long term by paying a bit more upfront which can save maintenance costs later, another lesson learned from her, he added.
“"No B-School in the world can teach you the management that your mother can, she has solution for everything andthe word Dead End doesn't exist in her dictionary,” Kartik Sanghavi, CEO of Appie Mobiquity Pvt Ltd said.
Save for troubled times
Keeping those few pennies aside in piggy banks has helped entrepreneurs make small savings to keep aside cash for tough times. Today, when funding is scarce, entrepreneurs should go back in time and recall those lessons learnt in childhood. “My mother is an ardent follower of the money mantra, ‘Money saved is money earned’. She always kept a budget of the total earnings, prioritized goals and made sure to stay away from unnecessary expenditures,” TravelTriangle CEO Sankalp Agarwal said.
“Even in my teenage years my mother made sure I didn't spend on unnecessary things. This practice inculcated in me a habit of saving,” Major Prashant Rai, CEO and Founder of Onetimejobs.com said.
“Never splurge what you have and save for the bad days -- this was a valuable lesson in a startup specially when we have raised Rs. 1 crore and that money is staring at us to be spent,” Anupam Sinhal of BookMyBai said.
Don’t be stingy
An entrepreneur should also make sure that he spends on the right resources to keep his co-workers happy and energized. “Another practice I try and follow is to share as much with our team which has helped us get to where we are. My mother always advocated building trust and loyalty through always showing appreciation with little gestures and I have tried to do this,” Byond Travel’s Vikram Ahuja added.
Don’t forget to spend on little things that make you happy
“My mother is very unconventional in her approach, encouraging me to strike a balance in everything. She always encouraged me to enjoy life. She said don’t become a bore and focus only on saving everything you earn. Learn to enjoy life, make memories not just money,” Shashank Kumar, co-founder Razorpay said.On the occasion of Mother’s Day, we salute every mother who taught us those little things in life which today has helped us become better managers of our wealth.