Since not all startups are able to get investors from the onset, it sometimes become mandatory to self-propell one’s business idea. the process of starting a business with no external investment is known as “Bootstrapping”. As expected, the process of bootstrapping is a very demanding and tedious process but if successful, it can prove to be very good for a business since there are little incurred debts and the business owner has total say over the way the business is run.
below are neccessary tips for entrepreneurs who plan to bootstrap their way into success
1. Choosing skillful co-founder(s)
Having two perspectives heading the company can be critical. When bootstrapping, the vast majority of the work is done internally, so cofounders need to complement each other’s skill sets. If you’re good at different things, you have a better shot at being able to do everything between the two of you, keeping expenses low.
Two good heads are definitely better than one. While bootstrapping, it is neccessary to have team members who complement each others skill sets. Having team members who have
2. Design A Business Model That Generates Cash Quickly
The amount of money you use to bootstrap your business will most likely be exhausted after a while, it is therefore important to generate cash quickly in order to avoid the death of the business before it actually gains traction.
3. Monitor Cash Carefully
Spending out of a personal bank account is sloppy and risky–instead, fund a bank account specifically for the business. By creating a separate business account, you can track and learn what adds cash and what diminishes cash from the business. Free tools such as Mint can help track spending and calculate burn rate. Watch your cash like a hawk, daily.
4. Cut Personal Expenses
Without a salary, you won’t have money to spend–so don’t expect to live a posh life when first starting your company. Consider every purchase and only spend what’s necessary. If possible, bunk with a family member or friend to decrease rent expenses and come to terms with the idea of a less-than-lavish lifestyle.
5. Don’t Outsource Jobs You Can Do Yourself
When bootstrapping, hiring out for a job you could do yourself is an avoidable expense and a wasted organizational learning experience. For example, I delivered lunches myself for three months before hiring our first driver. This saved us $1,200, which may not sound like a lot, but it was actually 12% of our capital.
6. Be ready and willing to learn…. a lot
If you don’t know how to do something, learn it. Don’t be afraid of learning new things; you’ll be surprised by your abilities.
7. Be functional, not Fanciful
Being fancy doesn’t always get the job done. Pick functional over posh office space. Consider refurbished computers instead of the latest MacBook Airs. Use a free banking service. Saving on little things goes a long way.
8. Be Utterly Perceptive When Chasing Revenue
Remember, your goal is to get as much traction as possible to raise a big round. 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 don’t 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. Be Persistent To Get What You Need
When you’re so small, vendors and suppliers won’t 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.
Although bootstrapping is difficult, it is however achievable with the right amount of dedication, concentration and sacrifice, it is like an investment you only benefit from in the long run