Money vs. Networking
In society so many times we look towards the reward or benefits of our labor and may forget to acknowledge certain areas within the growth stages or short-term that are necessary in order to achieve ultimate success in the long-run.
I had an interesting conversation with one of my mentors/ friends / business associates last night. He’s an executive with a large financial institution in New York and he has an extensive background in business.
He’s actually much older than me; in fact at the age of 52 he’s old enough to be my father, that’s why I always pay close attention to his advice, because he has many years of wisdom.
Anyway, while we were speaking and catching up (I haven’t talked with him in a couple of months now) I told him that I took on a part-time job working on the weekends in order to gain additional capital and help offset expenses that I was experiencing with my businesses.
As soon as I told him that he immediately said, “You need to quit.”
I paused for a second not really sure where he was going with his statement and responded, “Well it’s a temporary sacrifice I plan on leaving within the next couple of months or so around graduation.”
He responded saying, “No it’s too big a sacrifice. Not only are you sacrificing your time, but you’re sacrificing your social life, which is far more important for a young man like you because you’re at a stage in your life where you should be constantly socializing, networking and meeting people. That little money you’re making on the weekends is nothing compared to the long-term connections you could end up making”
I thought about it for a second and what he was saying did make sense. I’m sacrificing my weekends for a position that really isn’t that rewarding financially, I mean it does help a little, but it’s not truly worth the time.
This concept relates to “Opportunity Cost” that is often covered in Economics courses. Basically Opportunity Cost is the cost or expense of time.
In other words I’m making money by working a weekend position, but the opportunity cost is that I’m losing important networking and deal making time, which truly far outweighs the money that I receive by working.
So let me ask my fellow entrepreneurs and preneurs to be here at Mind Petals, which do you feel is more important: Immediate income towards your firm or the potential long run income/ success from networking?
6 Comments
David Askaripour
January 30th, 2007 at 11:44 pm
Hey William,
I’d say definitely the long term advantages of being able to build strong, long-lasting, and promising relationships with people who you network with. True relationships will always trump short-terms financial gains. In the end, you’ll come out on top financially and socially. Right on.
William
February 1st, 2007 at 1:10 am
Totally agree David, while steady and positive cash flow and income is a neccessary for any firm, in the long-term networking definitely gets a leg up. Thanks for the input.
Ajith J
February 2nd, 2007 at 8:04 pm
Your mentor gave you a pearl of wisdom though there are more to it than just missing networking opportunities. I think part time work is acceptable only if you are desperate for cash to take care of daily expenses. Other than that, the future returns of the time you put into your venture at an early stage is many multitudes more than what you earn from the part time job (considering your venture is a success!).
Secondly, if you are losing sleep to work part time on another job, it reduces your efficiency while working on the venture hence reducing the quality of your venture’s output.
Thirdly, unless you are exceptionally good at multi-tasking, working part time takes away your focus from the venture and this in turn also degrades the quality of the work you put into the venture!
My suggestion, don’t work part time unless you can’t find other means of taking care of your daily expenses or if the part time job teaches you skills that are essential for the success of your venture.
David Askaripour
February 2nd, 2007 at 10:28 pm
I like the way you think, Ajith. Great advice. I agree with you about the whole part time job thing. So I would assume that you are advising to spend all of your time making capital from your venture? For instance, I currently run a small web dev / consulting business — not because I really love web development (because I don’t), but because it pays the bills and allows me to spend most of my time working on the things that are most important to me (re:mindpetals). So here’s the question, would you consider my “small business” (web dev) as a part time job?
William
February 3rd, 2007 at 1:52 pm
Well said Ajith, you offer some really good points, especially the point about working a job that offers you knowledge and skills pertinent to a particular venture, because I think a lot of people forget to consider that viewpoint.
David,
I wouldn’t really say you shouldn’t work your other consulting business, you’re doing what you have to do. Let’s face it, at the end of the day no business will stay afloat without cash flow, so the connections and contacts won’t do you no good if a venture goes belly up.
I think you should keep doing the other venture as well, especially if it’s producing capital, then when others things fall into place in other areas you can let it go. Thanks for the discussion guys.
Ajith J
February 5th, 2007 at 4:53 am
David & William:
Thanks! I’m glad you found the comments useful.
David:
I won’t answer that question because you need to answer it yourself!
Although I mentioned some of the factors one needs to consider, deciding whether to work part time or not (or even to realise if you are working part time or not) is much more complex. As I am unaware of many factors that influence this decision, I will give you some pointers for introspection. Follow the thought streams originating from them and come to your own conclusion.
Is the additional money essential for mp to keep going?
Do you gain other non tangible assets (like knowledge, contacts ..) from web dev that benefits mp?
Can you find other sources of money with lesser commitments?
Can any of these other sources give you added benefits? (Think wisdom!)
Most sources of external money will dilute your authority. How much control you want over your venture and how much does it need? Will diluting that control degrade your output? Will it deviate mp from its goal (happens quite frequently)?
Does mp need the extra time you free up from web dev? Even if it does, will you be able to put in the additional time with the same efficiency (some people need multitasking to keep going, all depends on your passion, focus….)
If money doesn’t come commitment free (other than from the three F’s), how much and what will you gain and lose? What are your priorities? Money, fame, followers …..
and so on ………….
This decision needs a lot of insight only you can provide so take your time, think about it and make a sensible decision.
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