BOOTSTRAPPING 101 FOR THE CASH-STRAPPED ENTREPRENEUR
Posted by JEREME SANBORN
24 February, 2017
Did you start your business without taking money from an outside investor or bank? If you got your business up and running on your dime, what you’re doing is known as “bootstrapping.” This approach to funding your business has its advantages. For one, you are unequivocally your own boss. Plus, you aren’t dividing up your profitability pie down the road. Of course, the main disadvantage of going it alone is that your resources will be a little more limited. So, how do you keep your head above water without the help of angel investors and venture capitalists? We have a few ideas:
Don’t Outsource What You Can Handle In-House – When you’re bootstrapping, every expenditure counts. Don’t waste money paying others to complete tasks you have the time and expertise to handle yourself.
Account for Every Penny – If you’re running a business, chances are you will burn through cash more quickly than you anticipate. Make sure you utilize an accounting software program to help you keep track of your expenditures. Monitor your cash flow daily in order to properly gauge your burn rate.
Cut Your Personal Expenses Down to the Bone – Until your business gains some traction, you’ll want to live as frugally as possible. Consider every purchase you make. Ask yourself, “Would I be better served to put this money into my business?”
Keep Learning – Paying somebody else to do something you’re not quite sure how to do yourself? Don’t be afraid to learn new skills that can drive down your expenses and propel your business forward.
Be Your Own PR Firm – Hiring a public relations firm can be pricey. So get out there and spread the word about your business yourself. Learn how to write a press release. Use sites like helpareporter.com to contact reporters directly so you can pitch story ideas related to your business. Develop your social media skills.
Stay Lean – Salaries can often be one of the largest expenses for any small to midsize business. Make an effort to keep your team as small as possible until you have the steady cash flow necessary to take on additional staff.
Focus on the Future – Bootstrapping a business isn’t easy. With discipline, hard work and perseverance, however, it could end up being one of the best business decisions you ever make. When things get rough, remember that you are making financial sacrifices today because you are betting on your future success. Forgoing certain luxuries for the short-term? Stay positive and remember your long-term goals.