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Ask HN: What's your burn rate? What do you do to reduce it?

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Re: Ask HN: What's your burn rate? What do you do to reduce it?

#21

Post by patio11 »

I need to sit down with my credit card statements and start doing bookkeeping for 2010, but the burn rate for my business is about $1200~$1500 a month, with the lion's share of that going to AdWords ads and then freelancers. My personal burn rate in the typical month is also about $1800, with the largest expenses being food and then rent. Eating out is my biggest vice, and what an expensive vice it is.

Then there are occasional costs like international plane tickets, conferences, etc that I don't bother counting on a monthly basis. (Paid for by consulting, mostly. It is a convenient way to get back to the US to visit family.)

Re: Ask HN: What's your burn rate? What do you do to reduce it?

#23

Post by jacquesm »

joshkaufman wrote: post #20

I work from home, and rent/food/utilities/internet in northern Colorado is about $2,000 a month. Aside from rent, the internet is my biggest expense: I live in the mountains, so I pay ~$450/mo for a T1 - cable/DSL is not available, and satellite sucks. I could live in town and pay less, but my rent would go up, and I'd rather live in the mountains. As for business expenses, I average ~$1,000 in recurring charges per…

You could cut that T1 expense by quite a bit using long-haul wifi.

Re: Ask HN: What's your burn rate? What do you do to reduce it?

#25

Post by redrobot5050 »

joshkaufman wrote: post #20

I work from home, and rent/food/utilities/internet in northern Colorado is about $2,000 a month. Aside from rent, the internet is my biggest expense: I live in the mountains, so I pay ~$450/mo for a T1 - cable/DSL is not available, and satellite sucks. I could live in town and pay less, but my rent would go up, and I'd rather live in the mountains. As for business expenses, I average ~$1,000 in recurring charges per…

Have you looked at MIT's OpenCourseWare or iTunes University (same thing, just a different set of servers to DL from -- and an iPhone/iPad compatible format) for classes/continuing education? Because if it worked out, you could save some money.

What about Skype or a VOIP phone for international calls? (I don't recommend Vonage. I've had run ins with their service after some billing errors and it was very unpleasant, to the point where I would NEVER recommend them.

Re: Ask HN: What's your burn rate? What do you do to reduce it?

#26

Post by redrobot5050 »

blackswan wrote: post #11
tyrelb wrote: post #7

Earlier quoted context omitted.

Agree with office idea! Don't sign any long-term leases (over 6 months), and keep it month-to-month. If you start to take off, your damn lease will come back to haunt you... this is a burnt-out economy - grind those leasing agents down, get them to throw in free furniture, free rent, renovations, etc. with the promise that you'll expand out in a couple months with a larger space in the same building. When you get off…

I agree with what you write re: bargaining with the leasing agent - a couple of my friends have got really good deals recently by simply saying "I'll take it now if you include 3 parking bays and give us a shorter-term lease" or equivalent. Now is actually a really good time to lease space if you are certain that it's the right thing cash flow wise.

Another idea is to sub-lease un-used space of a business. A couple investment banking firms in Manhattan that have significantly downsized have rented out floors to start-ups. You get free phones and private WiFi as part of the deal. My friend's start up is doing this and its pretty nice. There are a couple of micro-startups (3-5 employees) on the same floor with his company right now, so it got that "incubation" feel.

Re: Ask HN: What's your burn rate? What do you do to reduce it?

#27

Post by jrockway »

jacquesm wrote: post #23
joshkaufman wrote: post #20

I work from home, and rent/food/utilities/internet in northern Colorado is about $2,000 a month. Aside from rent, the internet is my biggest expense: I live in the mountains, so I pay ~$450/mo for a T1 - cable/DSL is not available, and satellite sucks. I could live in town and pay less, but my rent would go up, and I'd rather live in the mountains. As for business expenses, I average ~$1,000 in recurring charges per…

You could cut that T1 expense by quite a bit using long-haul wifi.

Or by starting his own phone company!

He could also save on the rent by just overthrowing the government and giving the house he lives in to himself.

Why didn't I think of this before!?

Re: Ask HN: What's your burn rate? What do you do to reduce it?

#28

Post by rgrieselhuber »

One thing I picked up in Tokyo: In almost every major city in the world, there are Regus office centers.

Their virtual office plans are rather pricy but for $30 / month, you can buy their business gold card. This gives you unlimited access to their business lounge, free coffee and internet. It's a quiet place to work and you sometimes meet other interesting people.

If you are in Japan, the one in Shibuya Mark City is really nice and I currently work out of the one on Castro & El Camino in Mountain View.

Edit: forgot to mention my burn rate. Rent is about $1100, other monthly expenses about $2000 (married with kids). Servers / operating expenses ~$600. We tend to be pretty frugal in general so I don't actively look for ways to reduce it and I'm usually never good when I try.

Re: Ask HN: What's your burn rate? What do you do to reduce it?

#29

Post by joshkaufman »

jacquesm wrote: post #23
joshkaufman wrote: post #20

I work from home, and rent/food/utilities/internet in northern Colorado is about $2,000 a month. Aside from rent, the internet is my biggest expense: I live in the mountains, so I pay ~$450/mo for a T1 - cable/DSL is not available, and satellite sucks. I could live in town and pay less, but my rent would go up, and I'd rather live in the mountains. As for business expenses, I average ~$1,000 in recurring charges per…

You could cut that T1 expense by quite a bit using long-haul wifi.

Looked into that before getting the T1 - mountains make it difficult to get direct line-of-sight to almost anything, and I'm surrounded by national park, so it's difficult to build towers to relay a signal. Video is a big part of my business, so having a dedicated upload pipe is also useful.

Re: Ask HN: What's your burn rate? What do you do to reduce it?

#30

Post by joshkaufman »

redrobot5050 wrote: post #25
joshkaufman wrote: post #20

I work from home, and rent/food/utilities/internet in northern Colorado is about $2,000 a month. Aside from rent, the internet is my biggest expense: I live in the mountains, so I pay ~$450/mo for a T1 - cable/DSL is not available, and satellite sucks. I could live in town and pay less, but my rent would go up, and I'd rather live in the mountains. As for business expenses, I average ~$1,000 in recurring charges per…

Have you looked at MIT's OpenCourseWare or iTunes University (same thing, just a different set of servers to DL from -- and an iPhone/iPad compatible format) for classes/continuing education? Because if it worked out, you could save some money. What about Skype or a VOIP phone for international calls? (I don't recommend Vonage. I've had run ins with their service after some billing errors and it was very unpleasant,…

Most of the training I'm taking is pretty specific, and not available on OpenCourseWare or iTunes. It's worth the investment in teaching material alone - the more ideas/techniques/approaches I'm exposed to, the more valuable I am as a consultant, so the ROI is great.

I use Skype for some calls if the connection is good. For others, hard line is still best. I have a landline in the event the electricity goes out, so it's not a huge deal.

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