Running Out of Cash? Here’s How to Stay Funded and Scale Smart

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THE LEAN LESSON

Running Out of Cash? Here’s How to Stay Funded and Scale Smart

Cash flow is king in the startup world. But did you know 29% of startups fail because they run out of money?

It’s a scary thought, especially when you’re trying to build your dream business. The good news?

You can avoid this pitfall by being smart about how you manage and scale your cash.

The reason so many startups burn through cash quickly is that they scale too fast.

They start spending money on marketing, hiring a big team, and launching new features before validating that their product has a sustainable demand. That’s when things start to spiral.

for example. They were once a startup darling, but they grew too quickly, spending money on marketing and hiring aggressively without securing a consistent revenue stream.

They didn’t track their burn rate properly, and before they knew it, they were out of money and had to shut down.

The key is to start small and scale gradually. Validate demand before going all-in on expensive marketing campaigns or massive hires.

This allows you to conserve cash and grow at a sustainable rate.

Action Points:

• Track Your Burn Rate: Know exactly how much money you’re spending each month and where it’s going. Be aware of your runway and how long your current funds will last.

• Validate Demand Before Scaling: Ensure you have a proven product and customer base before scaling. Start with a small, targeted marketing campaign to see if people are willing to pay for your solution.

• Consider a Side Hustle: If you’re bootstrapping, don’t be afraid to take on a side job or find other sources of income to keep the business running while you grow it.

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