Finances are one of the biggest excuse people give for not starting a business. This need to raise money often becomes the excuse for not moving forward. But should it be a show stopper? Not at all, with a little rethinking and a little (or a lot) of bootstrapping you can create a business which is attractive to investors.
Before I give you 10 rules to remember when bootstrapping in your business let’s define it in terms of business ownership. Bootstrapping is when an entrepreneur uses personal finances and business revenue to operate the new venture. Bootstrapping is about being conscious and aware of where your money goes. It is about being frugal.
The key to be successful at bootstrapping in your business hinges on following these 10 rules:
- Evaluate your business idea and look for low risk opportunities which can provide revenue quickly. For example if you want to have your own gym but don’t have the capital how can you make money out the gate. Is the low risk opportunity offering your personal training services? or is it in selling a DVD. Take the time to figure out what your market is looking for and offer it.
- Ensure what you offer is a high-value service or product which has customers ready to buy. Remember during bootstrapping it is about generating revenue quickly.
- Know you are the team and be prepared to do all the work. During bootstrapping you aren’t looking to hire a team of employees to do all the work you need to be prepared to do it all. If you do need to hire help do it smartly and only in areas that make sense.
- Purchase your needs not wants. Simply put you may need a computer but you don’t need a new computer. Utilize the equipment/resources you currently have in house, can find used or if you must buy new ensure it makes a difference in your business being successful.
- If you are purchasing services or goods be sure to negotiate the cost. You will be amazed what a little negotiation can result in big savings for items and services you need to buy.
- Remember CASH is king. Keep this concept in mind and don’t focus on just your profit. Think about the cash flow you have available which can assist you in reaching your profit goal.
- Be prepared to bootstrap for the long haul. It make take you several years to reach your financial freedom in the business so be prepared to bootstrap for as long as it takes. Even after you reach financial independence in your business make bootstrapping a mind set and count your cost and profits you will be able to maintain success.
- Expand with caution. Know when the time is right to expand. Make sure the demand exist for new new products and services before you add them. This means do your market research.
- Set goals…Know where you want to end up and let your bootstrapping get you there. Obtaining financing to grow bigger can be one of
- Enjoy your journey. Bootstrapping is being more caution with your money but not with the joy of being in business.
Remember bootstrapping is about you taking action today and not using the need for financing to make an excuse for not starting your business. No matter your business idea you shouldn’t need to depend on outside financing. So how will you start bootstrapping to make your business a reality?
Wishing you productivity and prosperity,
Kim