Fixed costs don't care how good your idea is

Are you holding off launching until the business looks the part?

The logo is nearly right. The website needs one more revision. There is an office you have been looking at, a software stack you have been trialling, and a list of things to buy before you feel ready to take a client.

None of it feels like spending. It feels like getting serious.

But every one of those costs arrives on the same day each month, whether a customer does or not. Most founders I meet are paying for the business they hope to have, months before the one they actually have can cover it.

Launch lean, and let customers pay for the upgrades

Start with the smallest setup that lets you take a client legally, deliver the work and get paid. Everything else waits until revenue can carry it.

The reason is simple. Revenue is uncertain in the first year. Fixed costs are not. A business with low overheads can survive a slow quarter, a late payer or a bad month. A business carrying rent and subscriptions has to be right immediately, and almost nobody is.

In Australia, the lean setup is short:

1. Register properly. Applying for an ABN is free. Registering a business name with ASIC costs a small fee.
2. Separate the money. A dedicated business bank account from day one, so the numbers are clean when you need them.
3. Look credible, not established. A professional email address and a simple text logo. Free scheduling, free cloud documents, and a payment provider with no monthly fee that only takes a cut when a client pays you.

Then write your offer on one index card: who you help, the problem you fix, how long it takes and what it costs. If it doesn't fit on the card, it isn't ready — and no amount of branding will fix that.

The honest objection is that some businesses cannot start lean. A café needs a kitchen. A clinic needs a fitted room. A few customers really do judge you on your premises.

Even then, the principle is the same. Take the shortest lease, the second-hand equipment, the shared space — anything that keeps the monthly number low until customers have proven they will come.

A good idea can survive a slow start. It cannot survive a fixed cost it isn't earning yet.

Atlassian started on a $10,000 credit card and no sales team

In 2002, two university graduates in Sydney, Mike Cannon-Brookes and Scott Farquhar, started Atlassian. They funded it with about $10,000 of credit card debt.

Their first big product, Jira, came out of their own frustration with the bug-tracking software they had been using. And they made an unusual decision about how to sell it: no traditional sales team. Customers would find the product, try it and buy it online themselves. Software, as the company put it, should be bought, not sold.

Thirteen years later, in December 2015, Atlassian listed on the Nasdaq.

The easy reading is that they were too broke to hire salespeople. At the start, that was true. But the low-cost model did not stay a limitation. It became the strategy.

Without a sales force to pay, the product could be priced low, and the company could grow on what customers were already willing to spend. The overhead they never took on became the advantage their competitors couldn't copy.

Why I am recommending it

I learnt this one the hard way.

I spent seven years leading a development company backed by a private family office. Then came the COVID lockdowns, and after them material and labour costs went through the roof while borrowing costs kept mounting. It fell apart.

What that taught me is plain. When revenue stops, fixed costs don't. Every commitment you made in the good months keeps arriving, on schedule, whether the work comes in or not.

So now, with anything new, the first question I ask is not what it will cost to launch. It is what it will cost every month if nothing sells — and whether I could carry that for six months if I had to.

A low monthly number is not a lack of ambition. It is what lets you stay in the game long enough for the ambition to matter.

Do this before Friday

List every cost your business will pay each month before a single customer arrives — rent, subscriptions, insurance, anything recurring. Add them up.

Then cross out everything that isn't needed to take a client, deliver the work and get paid.

By Friday, write your offer on an index card and send it to one potential customer. The office can wait until they've paid.