Creative Founder: Cost

Dealing with costs was something that I learned the hard way. I remember back when I did not know what the cost of waking up every day was like. I had no idea how much was I spending, how much was I making, I was just cruising through life.

That all changed when I started my first company. Being accountable changes everything. My business partners needed to know how much I spent even on toilet paper. These are the things that could make or break your company. I learned how to calculate my costs and with time I started getting better at it. I am not an expert, but I like to visit my personal numbers at least twice a year.

For some reason, I assumed that my team would be familiar with calculating costs. They are college students, they live on their own, maybe they are dealing with grants and loans, so they must know how much they are spending. Well I was wrong. We struggled to get the numbers for each of myteam member’s burn rates. This wasn’t as bad as calculating the business costs. I mean, I have some experience calculating costs, but every time is a different ballgame. There are ALWAYS costs that you don’t consider and we needed to plan for that.

We did a brainstorming session where we all went through the most minimal details that could happen while starting the company and we wrote everything down. We did some research, talked to some of our peers and started assigning numbers on the spreadsheet. We combined our personal numbers with the business costs and made things way easier.

I learned once again that assumptions are very dangerous and that you always need to ask questions and make sure everyone is on the same page. I learned that no matter how much you plan for risk on your numbers, they will always be off. As next steps, I would like to talk to founders of other startups and get feedback on the numbers to see the loopholes and fix them.