Is Contract Work a Viable Path for Your Startup’s Survival?
Is Contract Work a Viable Path for Your Startup’s Survival?In the earl
Is Contract Work a Viable Path for Your Startup’s Survival?
In the early stages of a startup, securing a solid foundation is critical. Your primary goal is to make a sustainable income and ensure the survival of your venture. Especially when launching a new technology or app, the path to profitability can be uncertain and challenging. Here are some key considerations and steps you can take to navigate the decision of taking on contract work on the side while growing your startup.Why is Cash Flow Critical?
In the rapid and unpredictable world of startups, cash flow is an essential lifeline. When your revenue from a new app or technology launch is expected to fall short of projections, having cash on hand can make all the difference. In such circumstances, contract work can provide the immediate financial relief needed to sustain example, if you’re known for developing cutting-edge technology, the reception of your initial app launch may vary. A disappointing revenue scenario immediately highlights the importance of having a steady source of income to keep the business afloat.Critical Business Plans and Realism
Most startups are fueled by optimistic and ambitious business plans. However, these plans often stretch the limits of reality. The belief that the app will be an instant hit and generate massive profits is a common mistake. Such unrealistic expectations can impair the ability to make sound business , it’s crucial to develop a business plan that realistically assesses the challenges you might face. Once you have a more grounded understanding of potential outcomes, you can prioritize immediate financial needs over delays in product release. For instance, if you realize that a product delay could financially cannibalize your startup, it might make sense to pivot towards earning short-term revenue through contract work.Discussion Points with Your Co-Founders
Having an open and candid discussion with your co-founders is paramount. Here are key questions to consider:Financial Needs: Are some team members or co-founders in greater need of immediate financial support to meet their basic living expenses? Understanding this can help prioritize who needs the financial stability most urgently.Impact on Product Release: How much does the contract work delay the product launch? Evaluate the ramifications of this delay on the product’s market reception and the future funding you may be seeking.Long-Term Opportunities: If the contract work leads to more business opportunities through word of mouth, will you take those opportunities? This can be a game-changer for the future of your startup.Reserve Time for a Phone Conversation
If your current scenario involves early-stage pre-accelerator, pre-seed, or pre-angel startups, or if you are employees at a large tech company or academic researchers with a promising idea, it might be beneficial to reserve time for a more detailed conversation. Engaging with experienced advisors or potential mentors can provide valuable insights and guidance.Mahesh Bhatia, an experienced advisor in the tech startup ecosystem, suggests that a phone conversation can help you explore your options and make more informed decisions. This conversation can help you clarify your goals and navigate the complexities of balancing immediate financial needs with long-term growth strategies.“Reserve time for a phone conversation with me here: nIdeal for early-stage pre-accelerator pre-seed pre-angel startups or if you are employees at a large tech company or academic researchers or industry RD excited about an idea and itching to take the entrepreneurial plunge.”