Bootstrapping Techniques For Your Business
Bootstrapping is the art of starting and running a business without a huge pot of money or capital from investors to delve into. To bootstrap a business is to get enough cash running through it simply to keep going before growing from there. You might be surprised to know that some of the biggest companies in the world were initially bootstrapped, companies such as Apple, Microsoft and Coca Cola.
Bootstrapping is very much the “in thing” in the world of start ups, and the business community, and in an economic climate where it can be nigh on impossible to find investment for your new business, forcing many people into this method of getting their business off the ground.
So what are the best bootstrapping techniques?
- Get together what cash you can, whether it is from savings, borrowing from family or friends and for the braver among us loans or overdrafts. Another way to raise cash is to sell things you don’t need or make a drastic change like downgrading your car. It is all about cash flow in the early stages.
- Try and find suppliers who you don’t have to pay instantly, or that offer payment plans. Some businesses will only operate on cash on delivery, some will give you 30, 60 or even 90 days to pay your invoice, others may even let you pay in chunks. This way you keep the cash within your business.
- Don’t buy things you don’t need. It can be tempting in the beginning to go ahead and buy a lot of luxuries, or stock up on things you may need for the future, but it is important to resist this temptation and operate with the bare essentials.
- Utilize a home office. This is so important in the beginning as offices or commercial premises are a ridiculously huge expense, and one you may be able to avoid right at the start of your empire. Plan for the future, and an empire with many important buildings, but know that you might only get there if you sacrifice your need for a property in the beginning.
- Do what you can yourself. A lot of people outsource marketing and other business processes and services in the beginning, but doing what you can will cut down your costs and could keep your business alive. You can even do basic legal processes yourself such as patent applications.
- Don’t hire experience, hire hunger. If you’re going to have to hire somebody in the early stages, hire young graduates or people you can train yourself, they’ll be a lot cheaper. If you’re worried about the future of your business you could also offer them a short term contract to see how it goes, protecting you if your business goes down the drain.
- Start off selling services. Some types of business rely on income that they receive after they’ve done a job or created a product, and even if this is your long term goal, starting off as a service provider or consultant will put some valuable cash behind you so that you can expand into other areas.
Remember, it’s all about cash flow at the start, getting money through your business however you can and allowing yourself time to grow. You may have to make some sacrifices along the way, but bootstrapping is all about daring and being frugal. Work hard and you’ll get there in time.