5 Tips for Bootstrapping Your New Business
If investors aren’t knocking on your door, putting your money where your mouth is may be the only way to get your business up and running. For many start-ups it takes some initial success to show investors you’re worthy but making it through that growth period is no easy feat. To get you through the dirty days of bootstrapping here are seven tips for start-up survival.1. Do your research.
Before you blow your life savings on a cheeky idea, get some solid feedback. Perform market research to gain insight into what consumers think of your concept, what type of functionality they would expect, and how much they would be willing to pay. Gather as much consumer knowledge as possible before you dive in. This will confirm whether you should move forward and help you make important decisions down the road.
Here are a few great ideas for doing “on the fly” market research…
- Use tools like Survey Monkey to ask questions to a large sample size of potential users. Try to figure out what their current problems are and how your product can efficiently fix them.
- Test your idea by creating a landing page and running ads promoting your product (before actually creating it). Ask users if they want to be notified when your product launches and collect their information. This will not only help validate your idea but also give you a list of people to market to once you’ve created your product.
- Determine if your idea passes the “toothbrush test”. Google’s CEO asks this question before investing in any product: “Is this something you will use once or twice per day, and does it make your life better?”
2. Be a jack-of-all-trades.
While you initially build your company, you will want to be a jack-of-all-trades. Doing so is beneficial in two ways. First, and most importantly, you will save money, allowing you to reinvest more into your business. Second, it will give you an idea of what tasks need to be outsourced in the future so you can focus on growth.
As your finances allow, you should begin to outsource certain tasks so that you can focus on the growth of your business, some of which include the following…
- Accounts payable
- Bookkeeping
- Data entry
- Shipping inventory
3. Only hire people that are complimentary to your own skill-set.
If you’re a developer, don’t bring on a co-founder that’s also a developer. Seek out a marketing whiz that can write up press releases, blog for the company site, and hash out the social media messaging. When you take on people that possess talents you lack, you create a more balanced team. You want this team to run like a well-oiled engine – each person having a specific function that makes the business work.4. Make it personal.
In most scenarios, keeping your work and personal life separate is advisable. But when you’re paying for your business out of pocket that’s pretty much impossible. The way you live directly impacts the burn rate of your business’ funds. When you’re bootstrapping a start-up it’s time to put your plush lifestyle on hold until you start bringing in revenue.
Take a look at your personal expenditures, line by line, and start making cuts. Below are a few tips to get you started.
- Is cable TV a necessary expense? Probably not. There are great shows online for free. If you can’t find your favorite show for free, ask a friend if you can be added to their Netflix account (there is a 5-person limit).
- Haggle your way to a lower cell phone bill. Yes, it’s possible. It can be as simple as telling your current provider that you found a better deal with their competitor and asking them to match it.
- Start using digital coupons. Long gone are the days where you need to cut coupons from the local newspaper. Today there are tons of apps that are dedicated to saving you money on regular expenses, like groceries.
5. Be persistent.
Lack of funding will likely not be the only problem you encounter. Remaining steadfast despite obstacles is imperative when getting a new business running. Anticipate hearing “no” more than once and be prepared to change naysayers’ minds. As a small, unknown business people are going to be hesitant to work with you and quick to dismiss you. Always show up equipped with hard evidence as to why you’re worth a leap of faith. Passion and human connection can get you a long way but focus on doing so without being annoying.6. Don’t be above free or cheap.
When funds are limited, cutting corners isn’t stingy — it’s survival. Make your money last by saving whenever possible. Opt for used office furniture and equipment and print your own marketing materials if you can. Sure, it’d be great to work with the newest technology and flash fancy business cards at all your meetings. But if your unnecessary expenditures bankrupt your business all that junk will just be fuel for the fire.
Pro-tip: Start by scouring the “Freebies” section of Craigslist for items you might need for your office. They might be used but, like the saying goes, “one man’s trash is another man’s treasure”.
[“source – huffingtonpost.com”]