Everyone seems to be wanting in on the action regarding fund-raising – it’s the new buzzword. The overnight star status has everyone wanting to turn to ecommerce and get funded. Many founders and entrepreneurs think that the only way they can create a successful business is by getting funded right from day one.
They forget that somewhere in the middle of all of that is the need to create a business – which is sustainable and long lasting and not dependent on funding. Studies show that the vast majority of these businesses are self-funded – which is usually known as bootstrapped.
Simply put – bootstrapping is where you start your company with your own finances. This could include help from friends and family but is basically your own money and where the risks are huge. If you do not have the right financial management skills and the knowledge, you could end up failing with serious debt issues. On the other hand, if you can pull it off, the rewards are huge.
To be successful, there are some things that an entrepreneur must do:
Fast Revenue Generating Business Model
A business model which will generate real cash and profits as much as possible is what you should aim at. The faster you generate cash, the higher probability of your business surviving and growing. For customer acquisition, focus on certain markets. It could be acquisition through social media, emails, affiliates, online ads, radio and so on.
TV advertising is not only going to be very expensive but you are probably not prepared enough to handle the traffic which would impact your brand and end up being more damaging. Develop the ability to choose a good revenue source over one which is not. Also, avoid trying to get into inventory as much as possible.
Focus On Cash Discipline
Personal and professional expenses should be kept separated. Also, incorporate the company right from day one – it’s a small expense but a crucial one. It helps you maintain a clean record from both a business management as well as a regulatory environment.
Your business account needs to be monitored daily – what is coming in and what is going out and slated to go out. Once you do this, you would realize you have an amazing power to control the growth of your company. You would know exactly how much you can spend on what sector to grow your business and allocate funds accordingly.
Learn as much as you can to run your own business and hire only those that you really need. Have a comfortable working space that makes you productive and not an expensive place that bleeds you financially.
Bootstrapping is a mindset which teaches you discipline and forces you to constantly sharpen and hone your business model and product offering. This leads to the creation of very strong foundations in the long term would help you meet your financial metrics and actually give you more negotiating power while raising funds. You would have all the control and leverage to take your company in the direction that you want to.
That’s why a little patience in the beginning and financial discipline would allow you to focus on creating your successful business.