Suppose you take the road less traveled by. You’re an eager entrepreneur infiltrating the startup world, yet raising capital is implausible and the resourcefulness of bootstrapping a company is the better option for you.
Kudos to you as you reap the various benefits of bootstrapping as opposed to raising capital. Much of it includes the freedom from obligation, added pressure and risk of an investor hanging over your shoulder influencing your every move.
Not only may this save you time and energy, it also trains you to be strategic with small-scale investments you make out-of-pocket, which serves you well as you scale. Here are a few characteristics that will help make your bootstrap story a reality:
GENERATE CASH QUICK BUSINESS MODEL
It’d be incredibly difficult to bootstrap a business model like Uber. Founded in 2009, recent reports show they have just begun to be profitable in the United States in 2016. Yet, they still recorded over $1B in losses on their balance sheet due to losses overseas. Needless to say, their business model needs more time and money than most to become cash positive.
So if you are looking to bootstrap, be sure to set a reasonable timeline towards monetization so that you understand how your funds will be budgeted over the course of the business’s pre-revenue stages. Once you have that timeline, add 3-months to it to be sure your funds are modestly distributed.
INCENTIVIZE THROUGH NON-CASH ASSETS
There are many creative ways to incentivize great talent to work with you on your startup other than big-time salaries and signing bonuses. Consider looking towards non-cash assets such as equity, formidable titles, housing and mentorship opportunities to get people to buy into your startup.
Most importantly, the millennial generation is admittedly unenthused with jobs that provide financial stability but don’t align with their passion. According to a recent study conducted by Bentley University’s Center for Women & Business, 84 percent of millennials view making a positive difference in the world as more important than professional recognition. Passion plays a huge role in whether millennials take a new gig. Talk in terms of your shared passion!
Unless you’re a hermit turned entrepreneur, you know people. Starting your own business is an admirable path and your network of business professionals, friends and family will be open to help you in various ways. Relationships are extremely valuable while building your business, so be sure to use them strategically.
LEARN IT YOURSELF
It’s not that hard. There are endless resources available for you to develop the skills you need to build the basics for your company. Photoshop? Canva. WordPress? Wix. Excel? Google it. To find how much these easy-to-learn skills will save you, take the time to find price quotes on graphic designers, website developers or business development specialists (whatever that means).
One of the most valuable parts of building your own business is learning, developing and managing all the skills you need to make it work. Not only will this help you in the short-term, but it will also allow you to be proficient with your future employees who specialize in these technical areas.
ALWAYS BE SELLING
After 4-steps of how to save money, here is an extremely important 5th step on how to make money. Always be selling. Y-Combinator emphasizes that any entrepreneur should always be either coding, exercising or talking to customers. And while you’re talking to customers, be aware of their feedback and level of interest. Your first sale could come from a conversation on an airplane for all you know.
Granted, please avoid acting like a used car-salesman 24/7. Rather, be aware that every conversation and opinion adds value to your business and product. Perhaps the person has a few people in their network who could become part of your Board of Directors in time.
With these points in mind, bootstrapping your business will be marginally less difficult. Starting a business with the potential to scale exponentially is a marathon-sprint. Not one or the other. You are sprinting for 26.2 miles. Be patient. Be positive. And there’s nothing better when it all comes to fruition.