Pick up a paper, flick on the TV, tune in your DAB…what you’re likely to be greeted with a myriad of bad news, especially with regards to the economy. The tumultuous economic times we’re in have shown no mercy, taking huge brands, investment banks and even entire countries to the brink of financial ruin. You can be left feeling that getting your hands on the external capital required for your start up is nigh on impossible.
Don’t let the investment banks scupper your dreams though. Using personal finances or your business’s own revenue streams, it’s possible to start up, survive and thrive, without calling upon banks or venture capitalists. Here’s some tips that should help you and your business perfect the fine art of bootstrapping…
Keep a keen eye on cash flow
As a bootstrapped business, it’s vital to keep track of cash-flow. Ultimately, this is something that’s integral to the success of any business but if you’re a bootstrapped, even more so. Unless you’ve got a lot of personal wealth to call on, you’ll be heavily reliant upon revenue to pay the bills and fuel expansion.
This can prove a daunting task, as you’ll not only need to be on top of your the finances in the here and now, but you’ll also need to plan for the future. Cash-flow forecasting helping to avert financial disaster later down the road. Online accountancy has made the process easier, ease of access to balance sheets and the like made possible via cloud software. In many cases you’ll see that it’s a cheaper option than a traditional accountant, too.
Establish a stringent payment system
This is interlinked to cash flow and can go a long way to ensuring your business is in a healthy cash flow position. It’s worthwhile establishing a routine for invoicing and collections, issuing payment reminders when they’re due. These late payers can ruin your cash flow projections and damage your capability to meet your liabilities, therefore you’ll need to keep on top of them.
Creating and enforcing a credit policy that’s clear about when you are willing to give credit, with information on how much and who to, as well as when exactly you will consider a payment to be overdue, may limit those pesky overdue payments.
Frugality is important as a bootstrapped business and it pays to be wise with what capital you have. Technology can help assist in you in your penny pinching, cloud software and the wealth of apps on offer by iTunes and its rivals, providing some great value for money.
With Google Drive, users can take care of all their word processing, spreadsheet and presentation needs for free, whilst the Skype app offers free device-to-device calling and low-cost device-to-number calling anywhere in the world. Extra features are multi-person video chats and screen sharing, creating a comprehensive package for all your telecommunication needs.
Take some time to shop around, and you can cut costs in a range of areas.
Embrace the net
With the internet becoming more and more omnipresent both in our business and personal lives, it makes sense to have an online presence as a small business. This can be done in a number of ways, an online shopfront, Facebook, Twitter or your own blog amongst the ways you can market yourself on the net.
Used in combination, these four can prove powerful assets for the promotion of your business, eliciting trade whilst simultaneously working to establish and develop brand identity. With WordPress you’re given a free way to create an online shop front, whilst with social media heavyweights such as Facebook and Twitter, you’re provided with a free way to market your business.
Establishing an online presence could prove enormously cost-effective, in that the relative outlays are small, compared to the potential financial rewards.
Lastly, look after your friends
As small businesses and start-ups, you’re all ultimately in this together. You’ll find amongst the wealth of small businesses that they’ll likely need your service just as much as you need theirs.
With this in mind, consider doing them a favour, offering them a discounted rate here or there and ask them to return it. You may take an initial hit on your finances, but it may save you money in the long run. It’s important to have friends if things get tough.