Finance Your Own Business with these 6 Bootstrapping Tips
As a startup, it is hard to find angel investors or sources of other capital to infuse into your new business, but sometimes it pays in the long term to launch your own business by bootstrapping, that is, by funding it out of your own pocket. While it is an excellent and admirable way to start your business, it may not seem obvious at first. It’s all about making the right plans and taking the right steps. You need to be diligent, flexible and determined in order to succeed. Here are the top tips for your bootstrapping adventure.
1. Design a Business that can Generate Cash in a Flash
Some businesses lend to bootstrapping more easily than others. Those businesses that are the most successful are startups that can launch quickly and rapidly generate cash. Without any cash flow you’ll crash and burn before you even get a chance to get off the ground.
2. Track Every Expense from a Business Account
Startups that begin their business lives with a massive cash injection have the luxury to spend freely. When you are bootstrapping, you just cannot do that. First of all, do not use your personal bank account, that is too risky. Open a separate business account and track every expense. You will quickly be able to identify what adds cash to your business and where your biggest losses are so that you can adjust accordingly.
3. Cut Cash Corners
Without investors and a salary, do not expect to live large when bootstrapping. Whether it comes to your own personal expenses or those of the business, you should only buy what is necessary. Economize at every corner; that means buy used furniture, avoid company perks, barter and use a virtual office instead of leasing expensive real estate.
4. Don’t Outsource Jobs You Can Do Yourself
Until that income is flowing, it is nonsensical to hire additional staff to do work that you can do yourself. For example, instead of hiring someone to courier post to clients, drive there yourself. If you have creative flair, instead of hiring a marketing team to create your logo, make it yourself. DIY will save a lot of money when bootstrapping.
5. Chase the Right Deals
If you want to get cash flow fast you need to be discerning about the clients and opportunities you chase. If a lead looks like it will entail a bumpy ride, dump it and save your energies for those opportunities where you are bound to win business. When bootstrapping, you need be nimble and fast; don’t let a wild goose chase detract from your goal and waste your time and energy.
6. Incentivize your Clients to Create Buzz
People love new things, especially when they’re state-of-the-art, trendy and different. People also love to show off how hip and trendy they are too. If your startup is launching something cool then incentivize your first clients to share news about your company on their social media sites or blogs. Offer them a discount if they share your website on social media, or if they tweet about your services. This is a great bootstrapping method for saving on PR and letting your customers do the work for you!