Bootstrapping your startup is the art of funding your enterprise out of your pocket, and building it up to a stage where you can attract investment. And while bootstrapping is certainly cost-effective, there are, of course, inherent problems with the method. You have to get some sort of traction, first and foremost. And you will have limited funds to make your dreams come true.
Plus, it’s important to remember that there are no guarantees you will get the funding you need beyond your personal investment, meaning you could walk away with nothing. With this in mind, here are some smart suggestions on how you can bootstrap your business and prepare it for a successful future.
Find the perfect co-founder
First of all, it’s important to choose your cofounder with a lot of thought behind it. Your different perspectives and work ethic will be the difference between success and failure in many cases. Make sure you find someone that you get on with, who complements your skill set and is prepared to get their hands dirty when needed. According to www.theguardian.com, you will find that your bootstrapping has far more chance of success when you have the right help by your side.
Focus on cash generation
It doesn’t matter how much money you have to pump into your bootstrapped business, you will be surprised at how quickly it gets eaten up. It is vital, then, to plan your business and ensure that generating cash is at the forefront of your priorities. Otherwise, when your savings and initial investment runs out, you will be stuck up a creek without a paddle in sight.
Ultimately, bootstrapping means taking care of every single penny. You might benefit from using a home office to save rental costs, for example. Or, as www.hoxtonmix.com points out, you could save on office costs by using a coworking space or a simple virtual address. Be wary of what you are spending on equipment and services, too. Are you really getting value out of every single penny you spend? Use financial tracking tools to ensure your sums add up – and give you the value your startup needs.
DIY what you can
Hiring employees is out of the question when you are bootstrapping. And while there is a lot of opportunities for outsourcing, you should think carefully before taking the plunge. Only ever spend money on outsourced tasks you cannot do yourself, and be prepared to learn a lot about every single business topic under the sun. Yes, outsourcing can help you get to market quicker, but the reality is that spending more time and less money will often put you in a safer position.
Find great suppliers
If you can develop excellent relationships with your suppliers, it can be huge benefits for bootstrapped startups. However, bear in mind that you face an uphill battle, as many vendors don’t want to work with small, new companies – it’s too much of a risk. But if you can sell them your dream and idea, there will be more chance of them getting on board – and you may even find they offer you favorable deals.