7 Tips for BootStrapping your Startup on a tight Budget
BS’g (the other BS) your Startup can be a rewarding & beneficial experience. It demos how you can accomplish a lot with a small amount of $$$.
Boot-Strapping Topics: Check-out the Market, Low-cost Interns, Keep your Team Small, Efficiency, Out-Sourcing, Marketing, Social Networks.
Most entrepreneurs dream of taking an idea and turning it into a successful company, but that takes time & capital. Most startups don’t get funded by VCs or Angel Investors. The money often comes from your savings, credit cards, family or friends. Because initial Cash Flow may be slow, you need to keep your budget realistic in order to stretch every dollar. That’s where BootStrapping comes in.
BootStrapping means starting a company with little or no money, but utilizing the resources readily available to you. This means keeping your Budget low, not taking a salary, working with your team to develop your product for sweat equity or out-sourcing some functions altogether. It may take you longer to get your product to market – because you are relying on yourself for everything – and often learning as you go. It is, however, the leanest way to develop your Startup. There are plenty of startups that have been successful without taking outside capital.
37Signals has 37 hundred Profiles on a few of them.
Campaign Monitor was able to bootstrap because the founders had the background necessary to build & design the product. They also used the profits from their consulting business to fund the project. Admoda set out to bootstrap from the start, avoid the need for investment, make a lot of money & have fun. The Founders put up the original investment and then re-invested the profits to avoid taking outside capital. How can you learn from those examples and get your BootStrapped startup on the right path? These strategies can get you started.
1. Check-out the Market.
Before you spend money on anything, you should talk to potential customers about their level of interest in your product. Ask them how they would use it, what features they might like to see and how much they would consider paying for it. This will help “validate” your idea and justify spending the time & money to start your company. It will also help determine which functionality you need immediately, vs what can wait until you gain more traction.
2. Low-cost Interns
Using Interns at your startup is a Win\Win for both parties. The Intern gains valuable experience working at a startup and you get support at little to no cost – that leads to quicker profitability. Since the team is small, the intern will have more influence than they would at a larger company, becoming involved in many aspects of the business.
3. Keep your Team Small.
A large team could drain your cash more quickly than any other expense in your budget. Until you have a positive cash flow, only hire people you absolutely need. If necessary, give current team members multiple job functions, and offer stock option incentives instead of cash.
To bootstrap, you need to be as efficient as possible. That could mean doing small, inexpensive marketing tests until you find the best results. When designing your Website, first add the most important functionality – in order to get a product to market – but to minimize your later work, make sure to consider additional features.
If you don’t have the capital to hire an employee on a short-term project, consider out-sourcing the work. You can easily out-source your Web design & programming, but you will need to weigh the pros & cons of not having that person on-site. Some websites that can help in your search for off-site talent include . . .
Elance & Freelancer. On these sites you can either post your project and have people bid on it, or you can search through the talent and contact potential candidates directly.
Hiring a Marketing firm can be very expensive, and there is no guarantee that they are going to get you featured in a Magazine or Blog. Try out-sourcing your own Press Releases, by contacting Reporters on your own. Find stories & outlets that are related to your project and come up with a simple pitch for a story idea. Use the free service . . .
MediaSync to get a reporter’s Email address and contact him/her directly. Reporters are interested in hearing from the CEO of a company, and if you have a good story idea, they will respond.
Help a Reporter is another site worth mentioning — reporters search for experts like you to quote in their stories. It never hurts to make yourself available.
7. Social Networks.
Use Facebook & Twitter to connect with your customers. Both are free networks that you can use to promote your business to a broad audience. Become the expert in your field and Blog on your Website or guest write on other sites related to your industry. This will keep customers coming back often, meaning higher potential for sales.
Conclusion: BootStrapping your company can be a rewarding and beneficial experience. It demonstrates how you can accomplish a lot with a small amount of capital. Once you have proven your product in the market, you may need to take on outside capital to help with the growth period. But continue to manage your growing budget as if you’re still BootStrapping. It will help you keep costs down and stretch your money toward success.
Quotes on Startup Bootstrapping
“Chase the vision, not the money. The money will end up following you.”–Tony Hsieh, CEO of Zappos
“BootStrapping helps you accept the facts much faster when you make mistakes and resolve them quicker.
“If you’re passionate about something and you work very hard, then you will be successful.” –Pierre Omidyar, CEO, eBay
“Crowdfunding is a break-through for the SME/early-stage startups, especially the BootStrapped ones, to source funds from the market.
Comments: Do you have any other Tips on low cost BootStrapping ideas?
from Mashable.com 01/17 enhanced by Peter/CXO Wiz4biz
For more Info, click on BootStrapping, Starting a Business.