Tips for Bootstrapping your startup.
19th, August 2017 - Startup community
Many Start-ups will not get a chance to raise fund from the investors. This is a reason Startup cite for the failure.
While this is an honourable way to start a company, bootstrapping is more difficult than it might seem. First-time entrepreneurs often have trouble getting funding without first showing some traction and a plan for potential success.
Bootstrapping a business is a lesson in hard work and flexibility, but ultimately it can help accelerate a company’s success.
Here are the basic tips to follow Bootstrap model your business.
Pick up the co-founder carefully.
Start-ups with more than one founder are always successful but again are a costly affair if you do not select your co-founder carefully. When bootstrapping, the vast majority of the work is done internally, so cofounders need to complement each other’s skill sets. If you’re good at different things, you have a better shot at being able to do everything between the two of you, keeping expenses low.
Your business model should get you quick cash flow
Not all businesses are equally ripe for bootstrapping. The most successful bootstrapped companies have a business model that generates cash as quickly as possible. Without any cash inflow, you’ll burn your reserves before gaining any real traction. Some example for revenue model are Subscription, advertisement etc.
Do not burn cash the necessarily
Business expenses should be under control and as a hawk you should be over looked the account. Spending out of a personal bank account is sloppy and risky–instead, fund a bank account specifically for the business. By creating a separate business account, you can track and learn what adds cash and what diminishes cash from the business. Watch your cash like a hawk, daily. Identify the tools which are free and user friendly and adopt it.
Do not outsource the jobs try to do yourself.
When bootstrapping, hiring out for a job you could do yourself is an avoidable expense and a wasted organizational learning experience. Being an Entrepreneur is like a student, every day we learn new things and adopt accordingly. If you need to complete any job and thinking of outsourcing it will end- up in cash burn. Instead try to learn yourself and complete the work, you will enjoy doing so.
Do not invest in luxury.
Being fancy doesn’t always get the job done. Pick functional over posh office space. Start with the free versions of QuickBooks and Drop box. Print free business cards. Consider refurbished computers instead of the newest MacBook Air. Use a free banking service. Saving on little things goes a long way. Do not buy any software and do not invest much on paid marketing strategies. It’s a dream to have posh office but it not the necessary to have posh one.
Be discerning when chasing revenue
Remember, your goal is to get as much traction as possible to raise a big round. While you chase revenue, you will randomly encounter tricky opportunities that achieve a significant bump in growth at the expense of modifying your operational model or product offering. Evaluate these opportunities before jumping on them: Seize them if they’re aligned with your long-term goals, and decline if they’ll become a huge distraction from achieving further growth. At an early stage, what might appear to be a revenue touchdown may distract you from building a real replicable business?
Do not take No for an answer
When you’re so small, vendors and suppliers won’t want to work with you; it will take a personal touch to get what you need. Work to build personal connections with partners that may help your business in the long run. This may help obtain the resources your Startup needs to get moving, at a price that won’t break the bank. Don’t be afraid to share your story and appeal to people’s human side. To succeed as a bootstrapped Startup, you have to persevere for the answer you need.
Bootstrapping a business is difficult, but it’s by no means impossible. With the right amount of hard work, collaboration, and passion for your company, it’s almost easy to give up a chunk of your personal life today for the sake of your future. Ultimately, bootstrapping is making an investment in yourself that will pay off for your company in the long run.
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