8 ways to bootstrap your company
“Bootstrap, bootstrap, bootstrap,” says Ira Weiss at the University of Chicago’s Booth School of Business. “Create an advisory board and use the advisory for contacts. Try to get people interested in what you are doing and ask them for guidance. Pitch your idea to industry experts. Favour business models that generate cash sooner. Get external validation for your idea. The best way is through creating a product or service and securing customers that can be references,” she added when discussing prospects with Fox Business.
The aim of many entrepreneurs is to take a business idea and convert it into a professional and functioning business on a low budget. This is typically called “bootstrapping” and it is fraught with potential pitfalls and dangers.
Bootstrap your company by following these 8 fundamentals:
Build your idea into a documented strategy, detail down the market you want to serve, what is wrong with how it is currently being served and how you are going to take the gap. Also think pointedly about how you are going to market, where your users are online and how you will get their attention them. Test that your idea makes sense.
Get a spec or build a mock-up of the system you want; ensure the screen contains information and navigation that you want the final system to hold. Its not as simple as it may sound, so it may take a few rounds till you get this right.
3. Advisory board
Despite a competitive market and the phrase that it’s a dog-eat-dog world, you will find a number of older professionals keen to assist you. A number of individuals count it as an honour to be approached by younger entrepreneurs and are a great source of contacts. In a nutshell, with a bit of flattery, they will be “chuffed” and more receptive to helping.
4. Non-diluted capital
“Angel investors love non-diluted capital. We want to see entrepreneurs who have searched for funding like economic development funds or federal money,” says Thomas Keannear at the University of Michigan. By federal money, that means government departments like our own Department of Trade Industry. Unfortunately the process is often hampered by inefficiency and long waiting periods, but if you begin the process well in advance and long before you actually need the money, you may find yourself lucky. Continue to network. There are success stories.
5. Exit Strategy.
“If you can’t talk about your exit strategy, the more professional angels will be turned off. A good entrepreneur does not get surprised by questions about exit valuations. Speak from inception to positive exit,” adds Kinnear.
“I really think that the incubator model is proving to be very attractive,” says Bill Cesare of www.AngelRI.com. It allows investors like me to vet out ideas using the incubator process as the filter. Those that graduate out of these incubators have been tested and hardened by the process of being challenged.”
7. Leverage the media
Decide on an interesting topic the media is covering and present yourself as an expert. If you can comment on the day’s issues – or host an event that draws attention with a press release, you’re making the job of journalists easier and are more likely
8. If you can trade your skills instead of paying cash, do it
Young Entrepreneur.com gives a simple example. If you’re an internet programmer, for example, and need business cards, can you design a website for a printer in return for the design and cards that you need? It’s always worth asking. Use the service you offer to get things you would otherwise pay cash for at better value for money.