09 Jul 8 Tips for Bootstrapping Your Business
What is bootstrapping? Bootstrapping is building a business from the ground up with nothing but personal savings and, with luck, the cash coming in from the first sales. The term is also used as a noun: A bootstrap is a business launched by an entrepreneur with little or no outside cash or other support.
Create a Business Plan – This may seem like something that goes without saying. However, far too many times people just jump into business without a business plan. A business plan helps you to organize your ideas. It allows you to think things thru BEFORE you start spending money.
Find a Partner or Co-Founder – Find someone that has skill sets that compliment yours or skill sets you don’t have. For example, someone that has accounting or legal experience, etc. A partner or co-founder also provides someone to share the expense of the business. Additional, it provides someone to bounce ideas off and provide a different perspective.
Cut Your Personal Expenses– As you start your business, you want to cut costs to apply to your new business. This could include cutting expenses for those things you can do yourself (dining out, maid service, lawn service, personal beauty, etc.). For example, that extra $500 a month can be used to invest in your business.
Be Thrifty with your cash – Do your research and find free versions of software like Ripl (for marketing) and Dropbox (for file storage). Create business cards that are functional and not “too” fancy. Fancy drives up costs. Consider using refurbished computers and office furniture to cut costs. Work with banks that offer free banking services or small business banking fees.
Work on Your Business Model – Work on your business model to eliminate any inefficacies or processes that slow down the closing of deals. You want to ensure your business model generates cash fasts to ensure your cash reserves are not depleted quickly.
Consider Using a Co-working environment – A fancy office space is not needed in the beginning. Those funds could be used to on your marketing to acquire more customers. Consider using a co-working space. In addition to the monetary savings, there are other benefits as well, such as collaborating, networking, and learning from other entrepreneurs.
Avoid credit card debt – Unless you can pay off the credit cards every 30 days, this is the worst way to finance your business. The debt on credit cards can add up quickly and ruin your personal finances. If you have already used credit cards, focus on paying them off as quickly as possible.
Network, Network, Network – Get out there and meet new people. Join your local Chamber of Commerce. Attend events and galas that are similar to your business model (hair shows, accounting groups, etc.). Volunteer to speak at events. Having a successful business is about having a good network of people that know you and can make referrals to those that need your services.
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