from Entrepreneur.com 09 March 16 enhanced by Peter/CXO Wiz4biz
Funding is a very long shot. Most startups are started without capital from VCs or Angels. VCs fund only 1/2 % of startups while Angels are responsible for funding <1%. Take a moment to really think about those percentages in relation to the > 1/2 million Startups/month. You can see, the chances of receiving funding is extremely slim, so if you are serious about turning your idea into a reality you are going to have to dip into your own pockets (+Family, Friends & Fools) to bootstrap your way to the top. It isn’t easy, but it can be very rewarding – both personally & financially, as you retain 100 % of your equity. Here are 10 tips to help you bootstrap your way to success.
1. Fully Research your Market & Competition – 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?
2. Eliminate as many Personal Expenses as possible. When Boot-Strapping, you have to be prepared and willing to eliminate un-necessary expenses. Find ways to drastically cut expenses or eliminate them all together. (ie, take on a roommate or two to reduce living expenses, brew your own coffee instead of opting for a $4 cup) Look at your personal bank statements for the past few months to uncover areas to reduce or eliminate expenses.
3.Account for every Penny you spend – in 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 QuickBooks or free tools such as Mint, that will help keep track of your spending & gauge burn rate. Monitor your cash weekly or at least montly.
4. Do as many Jobs as you can yourself in the beginning. 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.
5. Handle your own Public Relations in the beginning. 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 public relations representative – 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.
6. Launch creative Marketing & Branding 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 its 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.
7. Provide ways for your initial Customers & early Adapters to create BUZZ !!! People 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. (ie, Allow them to unlock a Discount coupon by “sharing” your Website on Social media or create a branded Hash-tag, then randomly select winners for prizes. You can even share images of your customers using your product with a designated Hash-tag on the company Social media pages. By appealing to people’s narcissism you can create instant Brand “engagement”.
8. Create a Business Model that produces “quick” Revenue. If not, you will be dead in the water when you blow through your reserves. Constant Cash Flow is mandatory – if you look at successful Boot-Strapped startups you will see business models that generated revenue very quickly.
9. Grow your Website with you. I see it happen all the time – a startup will use lots of money on a great Website, then have none left for marketing. If you are operating on a shoestring budget, you can use a pre-made theme to get you off the ground, then use the majority of your funds to promote & grow your business. Once you have (+) Cash Flow and have “proven” your Business Model, do a Website update.
10. Be Persistent and never give up !!! When you are just starting out there will be many challenges & obstacles to overcome. Building consumer trust can be an early challenge. You have to be persistent. When I started my company, I was kicking down doors and dialing the phone non-stop to build relationships & make connections. Don’t take rejection personally – it is going to happen a lot. Boot-Strapping a Startup isn’t an easy task. It’s very challenging – and if you succeed – very rewarding !!!
Comments: Do you have any additional Boot-Strapping tips to share? Share them in the Comments section below.