Bootstrapping occurs when an entrepreneur self funds their venture as opposed to external funding – usually through VC (venture capital). It is the most critical decision one could make.
However, bootstrapping may not be for everyone, neither is it easy. At least it wasn’t for me when I started my own venture. I was young and overconfident – Ithought it would be as easy as calling my Spectrum service number and getting my problems sorted fast. I could not have been more wrong. But, I don’t regret it one bit.
Bootstrapping may be hard and not very glamorous, but if you go for it, you will ultimately come out as a stronger entrepreneur. The executive freedom you have at the start of your projects alone is priceless. So go for it by all means if it is the way for you. But before that, check out some of these investment methods that may help you plan smart…
It looks like a wonderful idea to start with something grand, but trust me, it isn’t. Grand ventures require large amounts of capital input. Although, you can set this up as a long-time goal. But if you have less capital, it is only wise to start small. Bootstrapping can help in that scenario. That way, you can raise enough from profits and earning to go big.
Go for a Cash Generating Business
Okay, now that you have started small, you now have the opportunity to go faster. Bootstrap your business in such a way that it brings back fast cash and profits. A startup venture needs to raise capital fast. Go for something that already has a sales market.
Don’t Burn your Boats
This is probably the most common mistake new entrepreneurs make. When they start a business venture of their own, the first thing they do is to quit their job. No business becomes a success overnight. It is advisable to start your business as a part-time job and go in full-time if it gets bigger enough.
Be Careful with your Expenses
One of the best methods to bootstrap your business is to cut down on your expenses. If you are not giving up your job to start your venture, it is a good idea to start working from home. That way you can save monthly rent costs. Go for less fancy meals and less fancy work clothes. Even small expenses like these can help you save big time.
Find a Partner
Look for someone interested in investing effort and time in your business venture. As I already suggested starting your business as a part-time thing, you can look for someone who has accommodation work timings and can handle while you work at your job. This is a good way to avoid work stress too!
Do your Research
If you are starting up a new venture, doing your research is a compulsion. Before you start, it is important to know all the dynamics. This limits the chances of failure. Also, once you lose your investment, it is gone, so you have to be well-prepared and well-aware. Take out some time and read customer reviews on similar products available in the market. Learn and improve.
Immediate Payments are your Friends
Make sure that all your clients pay for your products, instead of you financing their purchase by selling your product to them. This will keep the capital flow going in your business and you can invest it elsewhere in your business. The sooner your payments are done, the better.
Don’t Hire When You Can Outsource
Okay, so having a business partner is okay. But you cannot hire people for every small task. You need to save your capital. For example, if you want a business website designed, you can simply outsource it to a freelance web designer instead of hiring a full-time employee. Pay him/her on an hourly or daily basis. It is easier than paying a full month salary.
Ask Family Members for Help
If you are bootstrapping your business, anything should work as far as it helps you in cutting down your finances. You want to move the furniture around, or make a quick delivery nearby, ask a family member to help you out. Being economical is going to save you a lot of money at the end of the day.
Go for Digital Marketing
Yes, TV and radio station advertisements can cost you a fortune. But you need good marketing platforms to boost up your sales. Here, digital marketing comes to your rescue. Social media has millions of followers. An online presence can give your business an uplift in no time, and at no cost at all. When I want free digital marketing, all I do is switch on my Spectrum Triple Play and update stuff on my social media business page. A digital world full of prospects and opportunities opens up to me instantly!