Entrepreneurs will be only too aware of what it’s like to bootstrap a business. This is where, faced with little capital, you fund your startup out of your own pocket and keep reinvesting in it until it gains traction.
Bootstrapping a business requires careful planning and watching your spending like a hawk. But those who get the process right are the ones who reap the most rewards. Here’s our guide to help entrepreneurs survive their bootstrapped startup.
#1 Go Online
Technology is a boon for startups. It has allowed great business ideas to get off the ground quickly and often without requiring much money. Don’t be afraid of new technology, make it your business to understand and utilise it to keep your costs low. Be thrifty with your software packages. Start with the free versions of QuickBooks and Dropbox. Saving on little things goes a long way.
#2 Become an Expert in your field
Nothing is impossible to learn. Information is so readily available so remember if you don’t know something then make it your business to find out about it. Stay relevant and be informed about what is happening in your field. Knowledge is power.
#3 Don’t outsource doable jobs
While bootstrapping your start up, do not resort to outsourcing the jobs or tasks you can do yourself. Remember, you are saving for the future of your business.
On the other hand, sometimes your opportunity cost means outsourcing is the sensible way to go.
#4 Look for the right partner – wisely
The old adage two heads are better than one is right. The key is to be sure that you and your partner complement each other’s strengths and that you are all on the same page when it comes to the vision of the business.
Having partners or co-founders makes you trust and rely on each other to help you build the business and bring ideas to life more quickly by utilising your joint skills and keeping your expenses down.
#5 Build a reputation for quality and make a noise and get social
Build up your business’s brand. Make sure that your product or services earns a reputation for quality so you attract customers or clients quickly.
There is nothing better than a happy customer talking about what you do and earning business through word of mouth referrals. This can happen in the traditional way or through social media.
Market your business using the power of social media.
#6 Measure your key metrics
Understand your key metrics. Keep a regular check on the key drivers of your business – leads, conversion, retention, etc. Understand what works and what doesn’t work so you can create new and improved strategies. Don’t be afraid to evolve your business.
#7 Design a business model that generates cash quickly
A healthy cash flow is essential. So if you have a business model that generates cash quickly then you have a jumpstart. Without any cash inflow, you’ll burn your reserves before gaining any real traction.
#8 Be discerning when chasing revenue
If your goal is to get as much traction as possible to raise a big round of investment then be careful to stay focused. While you chase revenue, you will randomly encounter tricky opportunities that achieve a significant bump in growth at the expense of modifying your operational model or product offering. Evaluate these opportunities before jumping on them: Seize them if they’re aligned with your long-term goals, and decline if they’ll become a huge distraction from achieving further growth. At an early stage, what might appear to be a revenue touchdown may distract you from building a real replicable business.
#9 Don’t take ‘no’ for an answer
When you’re so small, vendors and suppliers won’t always want to work with you; it will take a personal touch to get what you need. Work to build personal connections with partners that may help your business in the long run. This may help obtain the resources your startup needs to get moving, at a price that won’t break the bank. Don’t be afraid to share your story and appeal to people’s human side. To succeed as a bootstrapped startup, you have to persevere for the answer you need.
The bootstrapping stage of any business is challenging but if you do it right it will pay dividends in the end.