Bootstrapping your business can turn out to be a great option for you if you’re just starting out. The cost of setting up a business can be hard to bear. And if your business is in the initial phase, it needs extra careful handling. This is where bootstrapping comes in, let me tell you how you can do that.
What does Bootstrapping your business mean?
Bootstrapping is starting and running your business through your own means without any external help (from outside investors). In simple words, what it means is to finance your business with the money you have and managing all the money aspects by yourself without asking for outside investment (angel investment). Bootstrapping is stretching your resources, both financial and otherwise to make the most out of your venture.
Managing What’s Being Spent
Managing spending doesn’t mean to spend less, what it means is to spend wisely. It is to control the money that’s going out. It covers all your business expenses. And of course, the goal of any business is to generate revenue by attracting and retaining customers. So, you want to avoid spending wherever you can. Let me tell you a few ways to bootstrap your finances.
The most important things that you would need to take care of are
- Your salary
- Your employee’s salary
- Office rent
Consider the option of working from your home. It’ll significantly help you with bootstrapping your business. If you can manage that, you should definitely do that. The primary function of office space is to work with other employees face to face to supervise better. It is required to work in groups more effectively than would be possible virtually or in a public place. Another thing that business owners need an office is for meeting with their clients. It can be used to welcome customers and build credibility. If you don’t want to give your personal address on your business card or website. But very few people would actually do that, and going to your client and saving them the time and travel expense is obviously a better idea. People would prefer you going to them.
If you need an office address to put it on the card, you can use services of online portal mail solutions. You can have all your mail routed through one of these companies and delivered to you electronically for a small fee. You would be able to put that address on your business cards. This solves the problem of renting an office.
But if you do feel the requirement of office space, go for low-cost office options. Rent an open or coworking space. You can sublet an office too. Subletting is basically sharing an office space with another firm. It’s a great place for networking. It usually happens when companies rent offices larger than they require, so it will cost you relatively cheaper, which is the ultimate goal of bootstrapping your business.
You will need services like a certified public accountant (CPA) for meeting your financial requirements. You will need a lawyer for handling the legal aspects and crafting your terms and conditions, designing your first contract etc. These are the services that you really need, so don’t try to be a cheapskate when it comes to the important stuff. Always consult it with a professional. These are services that you need once or twice in the entire life of your company, so don’t try to handle stuff on your own by googling it. The thing is, information on the internet is too fragmented and you would have to rely on yourself to piece it back together and you would never know if you’re doing it right. So, it’s advisable that you hire a professional.
Although you’re bootstrapping and cutting the cost wherever possible, you must never compromise on the things that are important. If you don’t have the money to pay them in cash, try to offer them a service that might be useful for them. Bartering is an age-old method of dealing stuff with stuff. Don’t hesitate to ask for it.
When to spend?
If you wanna know when you should be paying for something, here are a few things you can do. Always remember that you want to control the money flowing out of the system. If you’re not sure about something, ask yourself “Will it generate business to pay for itself?” If you see a direct link of potential business return for it, then go for it. There are not very indirect ways to make money and in the early life of your company, even more so. Focus on the direct ways only.
Linearize your expenditures, the later you pay for something, the more time you have to make money to afford it. Bootstrapping your business is efficient but as mentioned above, don’t cut down on the essential business needs. There are a few things that you do need. Pay today for what you need now. Don’t compromise on
- Necessary Business Needs
- A Website
- Business Cards
A website is important in today’s economy because most of the things can now be done online and it’s always wise to grow your audience base online too. If your business is not online, it’ll soon go out of business.
Business cards are one of the older tricks in the book, but they really are effective to this day. Don’t go fancy, keep it as simple as you can. Get that professional vibe going with your venture. People are more comfortable working with you when they think you know what you’re doing.
Customer Aquisition And Retention
This is the part where the real money is made. Acquiring customers and retaining them so you can offer them services or products that they can buy and you can make money. A few things you can do to ensure that is
- Never compromise on the quality of your product. You want to make something that people value more than the money in their pockets and you must always deliver what you promise.
- If you’re product or service is good, people would automatically recommend you to the people they know, that’s what you want to opt for. Provide as much value as you possibly can.
- When you’re losing customers, think of why that’s happening. Is there anything you can do and solve the problem?
- Don’t come off as a cheapskate in an attempt to bootstrap your business. Always keep your customers happy.
- Use paid tools to widen your reach, online advertising is a great way to bring in more leads which will generate business for you if you nurture them right. Be smart about it and don’t force yourself on people. People love to buy, they hate to be sold.
- Always follow up and keep reaching out. You want your customers to keep coming back to you.
Getting old customers back
You can get old customers back by reaching out to them and telling them about the changes that have happened. What you’ve done differently. Give them a special offer, something like,
“Hey, you were a great customer in the past and we’d love to have you back, so, we’re gonna offer you something that we don’t offer to anyone else.” But do it from a standpoint of, ‘Hey, we want you back’ Work on brand loyalty and develop trust. Rebuild trust with earlier customers with the vibe of, ‘Hey, come back to us and be our family‘
If you’ve broken their trust, don’t hide it. Admit it and try to make it right, respond with something like, ‘Oh, we’re so sorry you had to go through that, that’s not acceptable, here, contact us at this platform (phone or email) Let us make it right for you.’
It’s an opportunity, people notice it. It creates a culture and how people view you. Then go the extra mile, show them that you actually care. Take the negative experience and turn it into an immensely positive one.
One of the most important aspects of a thriving business is to ensure that it’s being maintained well. It can be tricky. The goal of business management is to ensure that you’re on the right path. The problem is, we wait far too long before knowing if we’re going in the right or wrong direction. If you’re giving your all and working super hard walking in the wrong direction, it’s gonna cost you a lot of money, time and effort. So, every once in a while you should take the time to reflect back and ensure that you’re going down the right rabbit hole.
A good strategy to use while you’re bootstrapping your business is to try your product or service and get feedback in short circles. It helps you analyze what works and what doesn’t. You’re making the product or your commodity for the people, no one can give you better feedback than the masses. Never test the depth of the river with both feet, take calculated risks and experiment.
Another thing to do is, to give your business space the right kind of environment. Keep it highly positive and upbeat. Look out for each other and make sure that everyone is having fun. It’ll increase your progress and it’ll help you scale faster as a business.
What makes a business great are the people who contribute their time and effort into making it so. Human beings are the greatest resource a business can acquire. When you’re bootstrapping, or otherwise, you want to look for people who are highly motivated for your cause along with the needed skillset.
Right people are super important for you to be able to scale your business right. If you can’t pay them in salary, pay them in equity. If people are motivated and have the same goal as you do, there’s no reason why you won’t succeed. It all boils down to hiring the right talent and acquiring the right assets.
Another thing to keep in mind is, it’s okay to be wrong. It’s okay to make mistakes. But one thing that you want to do is, to make your mistakes early on to limit the impact of mistakes on your business. To state it more simply, if you’re going to make mistakes, make them early on so your business doesn’t suffer. Don’t work inside of a bubble. Explore and experiment to see what works for you and what does not.
As an entrepreneur, it can be hard for you to manage that as you would want to overwork yourself. Bootstrapping your business can be hard. A good trick to go about this is to conserve your energy instead of your time. A few things that you can do are,
- Never work in your bedroom. confine some places for certain things only. Keep your work out of your bedroom, so when you get into your bedroom, your brain automatically triggers the response that ‘We don’t work here.’ So, it doesn’t trigger your subconscious mind into thinking that you’re still in the work zone.
- Don’t work after a certain hour at the day. Decide whatever time suits you for working and once that time runs out, you need to understand that you’re done for the day.
- Have a workstation and make sure it doesn’t have any distractions. It’ll increase your productivity at work and tune your mind into working in a specific work setting.
Bootstrapping your business is a great way to set up and get things going with your business. Everyone should bootstrap initially for sometime before approaching and VCs as you would have to give away heavy equity and you would have minimal to no control over your own business. It’s a good strategy to approach VCs for funding, but it works better if you’ve taken the time to establish it yourself first. If you’ve done that, it makes the VCs realize that you really are serious about it and it may end up giving you better deals than before.
Bootstrapping is a great all-time strategy anyway and if you want to use it as an initial boost for your business, that works too. The above-mentioned methods can help you get things in motion. If you have something you believe is missing, mention them in the comments below. If you wanna talk or would want us to know something, feel free to write to us. Thanks for the visit.