Cash strapped entrepreneurs use bootstrapping to get a startup underway. Growing the business is far slower using this strategy so it’s not an entrepreneur’s first choice. Borrowing funds, from external providers like banks and investors to build the business quick smart is much faster and easier for example with funds staff can be hired. Bootstrapping a business usually relies solely on the skills and resources of the owner who needs to be ‘everything to everybody’ until revenue provides the funds to invest in staff and other resources. Until this happens; marketing, sales, operations, delivery, account management, financial control, you name it, the owner has to be a jack of all trades and do it all.
Bootstrapping a business edges it forward at a snails pace so it’s understandable this approach to starting a business doesn’t suit everyone, especially entrepreneurs, who want big success in as little time as possible. Their focus is firmly on finding ways to self fund quick growth to show strong sales revenue to external financiers like banks and investors who can inject funds to take the business to the next level.
Self Fund A Start Up
Self funding strategies for the keen entrepreneur may start with taking advantage of leveraged trading and then trade with more funds to significantly expand their profit margin. This strategy can also ameliorate the risk factor, which begs an investor to carefully assess the market. Easily tracking and speculating price changes of leading financial instruments, like compass share price, as well as having a broader understanding of the market can provide greater success and profit which the entrepreneur would feed into the business.
How To Manage Expenses
For those business owners happy with the bootstrapping approach, here’s a summary of what’s required to generate some funds for the business from an article on entrepreneur.com:
Be frugal and always spend within your means.
This action will take a lot of discipline. In fact all these tips require paradigm shift in mindset. No longer can you be focused on instant gratification. The goal now is firmly on building a foundation for future success.
Be a saver not a spender.
Saving does not come naturally to most of us. We spend more than we earn and most of us live from pay-packet to pay-packet without a second thought to how we’d cope for six weeks or more without a wage coming in.
Don’t get into debt.
Or more importantly don’t confuse good debt with bad debt and don’t get into bad debt especially with credit cards. An example of bad debt is borrowing to buy a TV, or car versus good debt which is getting a home loan for an investment property which when rented out provides rental income. Also when done well, leveraged trading is also an example of good debt when it provides a healthy return on the investment.
Hone Your Marketing Skills
Now you’ve good personal financial management skills, reduce business expenses by co-sharing office space, watching every expense barely and hone your marketing and sales skills. Use digital marketing strategies including blogging for SEO, and sales. Social media marketing can also broaden your reach, and aim to become a subject matter expert so you can secure free PR for your business.