Watch your burn rate

A friend of mine came to me with "the billion dollar" idea and wanted four of us to join instantly. This is before the technology of this micro-electronic product is complete or we have a trial with a paying customer. On the other hand another startup I know has 23 people working on it and only two are fulltime. They are just about to sign a multi-million pound deal with a large customer and then they will be ready to get a lot more people on board.

When you have your great idea I would not put all eggs in one basket. See if you can all do the business part time first. Otherwise see the least amount of people go fulltime as possible. Suppliers can take a long time to deliver the technology, customers can take a long time to sign a contract. If your burn rate (amount you spend on salaries and other expenses every month) is high than you are going to be a lot more stressed about bringing the product to market. Things will always take longer than you thought (although it will seem like the world is going to explode with your products anyday). Get people working on 'sweat equity' (no salary, but shares of business instead) as much as possible. The basics of business is that "cash is king" so ensure you are as stingy as possible.

Perhaps you are a couple that want to give up your jobs to start the dream business. My advice would be to have both of you work on it part time, than for one of you to quit your job while the other continues to bring in the steady income and finally when you are sure that you can't survive without both of you going fulltime than to quit your job. Depending on what you are earning it might even be better to hire someone junior to do the task you would be doing and train them because you are earning more on your day job than a person with the skills you require.

If your job does not enable you to work on evenings or weekends on your dream business than perhaps its time to take an easier job, potentially with a paycut so that you can work on your business.