5 Ways To Bootstrap Your Start-Up
Most start-ups start small with very little to no funding from a third party. Getting angel investors interested in your start-up is tough and the competition immense. This, however, should not deter young and creative entrepreneurs. Sure finding funding for your company is hard, but this is where bootstrapping can help extensively. It’s important to understand that while bootstrapping is a good option it is also a hard one and requires constant effort and dedication from the employees in the start-up. Here are some tips we recommend to bootstrap your start-up.
1. Business partners
When you head a company, having a second perspective can sometimes make or break an important decision. Having a co-founder who encourages as well as moderates and complements your skills is very important during bootstrapping. Looking for a partner with skills you lack helps as you can help each other and keep most problems in-house.
2. A business that generates fast cash is wise
Most start-ups lack the capital to test out the waters and waste money on frivolous activities. As such, it’s imperative to start a market-ready business. This guarantee returns and it will help grow the business. You can reinvest your profits into the company. Fast cash is an important bootstrapping method when your start-up fails to acquire an angel investor.
3. Keep track of your money
In the first few growing years of a start-up, you must keep track of the money you spend. It’s beneficial for the company if you create a separate bank account for it rather than operate out of your account. This separate account will help you map out and track where and how you may be gaining or losing money. Checking your expenses daily is of extreme importance and extremely pivotal in the growth of the company.
4. Cut your expenses
When you start a new business, you must save wherever you can. This primarily starts in your personal life. Cutting expenses wherever you see fit is extremely important. For example, you can reduce your expenses on eating out. You can work from home for the first year or so of your start-up. This is one of the simplest ways to bootstrap, however, putting it into practice is hard and takes getting used to.
5. Business Plan
Having an appropriate business plan is imperative to keep your start-up moving in the right direction. All aspects of the business must be thought out in advance. The strategies in looking for angel investors, Start-up-Business-Advisor, other employees, finances etc. all must be thought about and noted down. The overall vision of the company should be included in the plan as well as how you plan on achieving it.
I have developed a one-page business plan for all start-up founders and entrepreneurs. This business plan helps you ideate what you would like to achieve the following year as well as the activities you are willing to give up. It helps you to understand the shortcomings of the previous year as well.
To Sum Up
Bootstrapping is an important aspect of growing your business. It is hard, however, with the right team by your side, you will be able to make it through. By the end of it, you are answerable to no one, because you have put in all the effort without help. For that silver lining, all the hard work would be worth it.
About Devansh Lakhani
Director of Lakhani Financial Services, and a Chartered Accountant, he helps start-ups raise funds from his network of investors. He guides and advises start-ups to scale up by providing efficient sales, marketing, team building, and business management strategies. He has executed fundraising by block deals on the stock exchange and conducted IPOs and right issues on the SME platform to the tune of over Rs. 50 Crore. He is currently working with start-ups from various sectors to help them channelize their business models and investments.