How to bootstrap your business
Bootstrapping has become one of the new buzzwords in business. Bootstrapping (or to bootstrap your company), means using your own resources, and effectively managing your cash flow, to internally generate the funds, that you need to operate your startup, or relatively new business. This has become the new motto of many small business owners. There is another major benefit is you can successfully bootstrap your company. Bootstrapping keeps you from having to seek out venture capitalists or angel investors for your business. This means a lot for many business owners, because when you let them on board, you lose control of a part of your company. If you are a business owner here is what you need to know about how to bootstrap your business-
- Control your costs-In order words you need to watch your cash flows and make every penny count. It is crucial to ask yourself the hard questions:Do you really need that fancy new computer? Can you get by for awhile with your old computer? If you can, do. If you can't, make do. In addition be careful of how you purchase. Sometimes the "big box" store with the large packages is not the best way to buy.
- Carefully manage your inventory-If you sell products and not services, you should reduce the amount of inventory you have in stock. While you need enough in stock, it is important to remember that having too much inventory in stock, means your cash is tied up in those products. Remember that it is also taking up valuable space that you're paying for. You need to keep your inventory to a bare minimum, while not taking the chance of stocking out.
- Hire carefully-Remember that you can always hire part-time or use volunteer help. If you are in a university or college town, you should check with their business college or department. Many have an internship program where they place students, for free, with local businesses just for the experience. You may be able to get free help for your business, using this method. If you can't get free help, then look for part-time help. There are lots of people who are out of work, and would be glad to take a part-time job. You might even be able to find someone to work part-time from home, which would be even cheaper. It is important to keep in mind that you don't have to hire full-time workers, where things like benefits will be an issue.
- Publicize your business-Sometimes in the day to day running of a business, small business owners overlook the need to market their business. Those business owners, who are bootstrapping their business, do just the opposite. They tell everyone about their business. There are many ways that you can do for little or no money.There are a number of ways to do this that include but are not limited to:
- Asking your family and friends to refer customers and clients to you
- Write a press release and send it to the local newspaper
- Put up a website, even if you have a storefront or plant
- Offer to appear for free at a public event
- Always control your accounts receivables-It is crucial that if you extend credit to customers, you need to manage your credit accounts. You will need to make sure that they are collected on time. You can do things like give a cash discount if customers pay their bills within ten days, or some period you set. You can shorten your billing cycles, and customers will hardly notice.