“No more unrealistic expectations about how cool it is to be an entrepreneur. It’s a continual struggle to start & grow your company’s on a boot-strapping budget.” – Spencer Fry, CarbonMade co-founder
Topics: Research your Market & Competition, Launch, Quick Revenue, create Buzz, DIY, Website, Accounting, Don’t give up.!!!
The Odds. The majority of startups are started without capital injection from Venture Capitalists or Angel investors [Bootstrapping]. The real numbers are eye-opening – VCs fund only 5/100s of 1 % of startups while Angel investors are responsible for funding < 1%. Take a moment to really think about those percentages in relation to the approximate 540,000 businesses are started each month & that’s growing each month.
Slim to None? Since the chances of finding funding is very slim, so if you are serious about turning your idea into a reality you are going to have to dip into your own pockets and use Bootstrapping for your journey. It isn’t easy, but it can be very rewarding – both personally & financially, as you retain 100 % of your equity. In no particular order, here are 10 tips to help you bootstrap your way to success.
1. Fully Research your Market & Competition. Before you do anything, you need to make sure you have a viable business opportunity. Is your proposed product or service already available on the market? If there is competition, how will consumers differentiate between you and them? What makes you better? What is your unique selling point? I know of several highly successful software-as-a-service (SAAS) companies that sold their products before they even had it developed. They did this to be completely certain there was a market for it. This isn’t the conventional way to do it, but it’s an example of entrepreneurs going to extreme measures to be 100 % certain they had a winner before going all in.
2. Plan & Launch “creative” Branding & Marketing campaigns. You don’t always have to have the deepest pockets to get brand exposure. You just need a creative approach. A great example is Newcastle Brown Ale and Video about almost making a Super Bowl commercial with Anna Kendrick. They didn’t purchase airtime for the actual Super Bowl but they did release a video about how they almost did. It went viral on social media and was an instant hit.
3. Create a Business Model that produces Quick Revenue. If not, you will be dead in the water – when you blow through your boot-strapped Cash Reserves. Constant Cash Flow is mandatory. If you look at successful Boot-Strapped startups, you will see all their business models generated revenue very quickly.
4. Provide ways for your Initial Customers & Early Adapters to create Buzz !!! Early Adapters love new startups & technologies. They love to show the world that they are cool, hip & 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 & 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 ego, you can create instant brand engagement.
5. Do as many Jobs as you can yourself, in the beginning. There is a big difference between jobs you can’t do and jobs you just simply don’t want to do. If a task requires specific technical knowledge that you don’t possess, then of course, out-source that job. But if it is something that you are fully capable of doing – but just don’t feel like doing – you are creating an unnecessary expense.
6. Handle your own Public Relations at first. Startups can benefit greatly from major media exposure in the beginning. Journalists & editors receive press kits from PR firms around the clock. They don’t want to talk to a PR Rep. They want to talk to you! They are much more interested in speaking with Founders than a PR firm, because they want to hear your story just as much as they want to hear about your actual startup.
7. Grow your Website with you. I see it happen all the time — a startup will have a custom website designed and by the time all of the features are built out they are left with no marketing dollars. They use their entire pile of seed money on a great website but then have no way of marketing. They turn into a statistic, joining the 80% that fail within first 18 mo. If you are operating on a shoe-string budget, you can use a pre-made theme to get you off the ground and then use the majority of your funds to promote & grow your business. Once you have positive Cash Flow and have proven your business model, do a Website upgrade.
8. Eliminate as many Personal Expenses as possible. When boot-strapping a startup, there isn’t a nice comfortable salary that comes with it. You have to be prepared and willing to clip unnecessary and lavish expenses. Find ways to drastically cut expenses or eliminate them all together – substitute a huge car payment for a smaller car, take on a roommate or two to reduce living expenses. Look at your personal bank statements for the each month to uncover areas to reduce or eliminate expenses.
9. Account for every “penny” you Spend. Keeping track of every penny that leaves your business account is crucial. Money goes out quickly when you are starting a business. Sloppy accounting can lead to a rude awakening. Using accounting SW such as Quick Books & Mint, that will help keep track of your spending & gauge burn rate. Monitor your cash frequently. There’s no excuse for lazy accounting.
10. Be Persistent – Don’t give up. When you are just starting out, there will be many challenges & obstacles to overcome. Suppliers & vendors aren’t always overly excited to work with brand new companies. Building consumer trust can be an early challenge. Don’t take rejection personally. I’ts going to happen if you stick to it.
Comments: Do you have any other ideas on Boot-Strapping?
from Entrepreneur.com 04 May 15 enhanced by Peter/CXO Wiz4biz
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