Bootstrapping es es proceso de building a business out of very little or virtually nothing. Boot strappers rely usually on personal income and savings, sweat equity, lowest possible operating costs, fast inventory turnaround, and a cash-only approach to selling.
Anyone who's started a business on a shoestring is adept at bootstrapping, or stretching resources as far as they can.
But bootstrapping isn't limited to the startup state. It's a valid way for business owners to treat valuable resources at any stage of their business' growth.
Bootstrapping is one of most effective and inexpensive ways to ensure a business' positive cash flow. Bootstrapping means less money has to be borrowed and interest costs are reduced.
Bootstrap financing really begins and ends with your attention to careful management of your financial resources.
Be aware of what you spend and keep your overhead low. If you need to go the top-dollar route, make sure you can justify the expense. Don't choose an overly expensive office or location unless it's really going to pay off in increased sales.
Take a look at secondhand furniture and if it works for your office, buy it. Barter for goods and services when appropriate. Buy on promotion, to take advantage of better prices offered for a limited time.
Keep a close watch on operating expenses. If interest rates are high, it won't take too many unpaid bills to wipe out your profits. At a 12-percent interest rate, carrying an unpaid $10,000 of bills will cost you $120 per month. Tight margins mean it's more costly to accumulate bills than increase production.
In no particular order, here are some tips to help you bootstrap your way to success.
Fully research your market and competition
Before you do anything else, you need to make sure you have a viable business opportunity.
Is your proposed product or service already available on the market? If there’s competition, how will consumers differentiate between you and them?
What makes you better? What is your unique selling point?
Some highly successful software-as-a-service companies have sold their product before they even developed it, to be completely certain there was a market for it. While this isn’t the conventional way to do it, it’s an example of entrepreneurs going to extremes to be 100 percent positive they had a winner before going all in.
Create a business model that produces quick revenue
If you’re bootstrapping, you need to make sure your business model generates revenue quickly.
If not, you’ll be dead in the water once you blow through your reserves. Constant cash flow is mandatory. If you look at successful bootstrapped startups, you’ll see they all generated revenue very quickly.
Provide ways for your initial customers and early adapters to create buzz
People love new empresas, and they love to show the world that they’re cool, hip and trendy through social media. Provide ways for your early customers to help put your startup in front of their social audiences.
Allow them to unlock a discount coupon by sharing your website on social media, or create a branded hashtag and randomly select winners for prizes.
You can even share images of your customers using your product with a designated hashtag on the company social media pages. By appealing to people’s egos, you can create instant brand engagement.
Don’t be afraid to let your website grow with you
Sucede todo el tiempo que una nueva empresa has a custom website designed, and by the time all the features are built out, they have no marketing dollars left.
They use their entire pile of seed money on a great website but then have no way of marketing it, and they turn into a statistic, joining the 80 percent of businesses that fail within their first 18 months.
If you’re operating on a shoestring budget, you can use a pre-made website theme to get you off the ground and use the majority of your funds to promote and grow your business. Once you have positive cash flow and a proven business model, revamp your website.
Launch creative branding and marketing campaigns
You don’t always have to have the deepest pockets to get brand exposure, you just need a creative approach.
Account for every penny you spend
Keeping track of every penny that leaves your business is crucial.
Money vanishes quickly when you start a business. Sloppy accounting can lead to a rude awakening. Use accounting software, that will help keep track of your spending and gauge your burn rate.
Monitor your cash daily, there’s no excuse for lazy accounting.
Eliminate as many personal expenses as possible
When bootstrapping a nueva empresa, there isn’t a nice, comfortable salary that comes with the gig, you have to be prepared to drastically prune unnecessary personal expenses or eliminate them altogether.
Substitute public transportation for a huge car payment, take on a roommate or two to reduce living expenses and brew your own morning cup of coffee instead of opting for a $4 cup at the local coffeehouse.
Look at your personal bank statements for the past few months to uncover areas where you might reduce or eliminate expenses.
Do as many jobs as you can by yourself in the beginning
There’s a big difference between jobs you can’t do and jobs you simply don’t want to do.
If a task requires specific technical knowledge you don’t possess, then of course, delegate it, but if it’s something you’re fully capable of but just don’t feel like doing, you’re creating an unnecessary expense.
Do whatever you have to do to make your business succeed, whether that’s making sales calls or emptying the trash.
Be persistent and don’t give up
When you’re just starting out, there will be many obstacles to overcome.
Suppliers and vendors aren’t always overly excited to work with brand-new companies, and building consumer trust can be a challenge.
But you have to be persistent. Kick down doors and dial the phone nonstop to make connections and build relationships. Don’t take rejection personally, it’s going to happen.