Clever money management helped me start up on the cheap


Having just graduated from my master's course, I had absolutely no money - and not very much business experience, either. Staying in the student mindset meant I could live - and run my business - frugally until money started coming in.

The challenge

After I graduated, I had £100 left, but I knew I wanted to start a business. I formed Boogles in the same month as graduating, and the fact I had no experience of running a business meant that growing the business consisted of adding people to the team and finding the money to pay my growing number of employees every week.

The solution

My mum helped me start up by lending me £50, and I made use of the numerous 0% credit card deals available at the time, putting all purchases on cards and transferring balances continually for months at a time. In addition, I put money aside to pay off the card when our time ran out.

I knew it was only a temporary solution, so I worked to reduce our credit terms and get paid more quickly by setting up a direct debit collection system, and putting in a card machine terminal so we could accept credit cards. I paid staff weekly and then changed gradually to monthly.

I also turned the trading cycle around by taking longer to pay creditors and collecting money faster from debtors - sometimes with incentives. When our first bank (of 3 years) refused to give us an overdraft, I changed banks and was immediately given a £10,000 overdraft.

Key lesson

It's not about how much money you have to start up your business. It's about how you manage that money. A fool and their money are soon parted, they say, and if you're running a business and don't know how to manage your finances, get a bookkeeper in to help you. You're much more likely to survive difficult times with a close eye on cash flow. And if your bank isn't being very sympathetic - switch!

Top tip

Make it as easy as possible for people to be able to pay you. Accept credit cards, and have clear credit terms. Don't be too generous - you don't have to give people 30 days. And, wherever possible, get paid in advance (or ask for a part deposit in advance).

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