Bootstrapping for Beginners
Below are 7 practical ways to start-up a business with just a few resources and a great idea. Here are a few things that I’ve discovered to keep the business moving forward. I hope you find them useful.
What is Bootstrapping?
Bootstrapping is the term used for self-starters who struggle to get funding. It is all about getting the most out of every penny spent and only spending where necessary. According to Prof. John Mullins at London Business School, companies that bootstrap and rely entirely on customer-funding have a higher chance of success. And I can see why. You keep the finances at the heart of the business and surely, that is the key to a successful business, it needs to support itself.
It goes without saying that you should be prepared to learn a whole host of skills you never had before.
1) Look for free money – locally.
True bootstrapping excellence is to find free money. A low, or no interest loan is good, but the ultimate hardcore bootstrapper needs a grant. Your local or regional government authority can point you in the direction of larger funds. There are loads of great incentives and funds to re-generate local economies.
2) Government Strategy
We are lucky, as the UK Government is always looking to support innovative ideas. Innovate UK is a Government funded Innovation agency that has £561m of funding for 2016/17. I applied for an Innovation Voucher, there are new rounds every 6 months with specific areas for investment. The application was straight forward. You have 6 months to spend the voucher money, great for fast paced start-ups. They also post requests for applications for areas of tech they require, so you may even find your idea meets their needs. Check if you are aligned with any of your Government strategies and maximize on it.
3) Staffing for less
Ok, lets be clear, I’m not talking about paying staff less than they deserve. I’ve always been believer that ‘you are paid for your knowledge and experience’. So, is the way forward to employ the unknowledgeable and inexperienced? Well, sort of. Be prepared to put in the effort to train people on the job. We approached universities for 2nd year students. Our first Summer placement student has been a huge success, its like having a 3-month interview. Just as the graduation ceremony finishes, he’ll be back at his desk hitting the ground running, getting his ducks in a row and other eighties style business talk.
It can’t be stressed enough how important networking can be. I was at a playdate, when a lady with a newborn swept in. It turned out she was a sales professional in the IT industry with many years of product AND services sales under her belt. I was in the right place at the right time to pick myself up a new team member. Patiently waiting and ensuring her return to work was as stress-free as possible.
As for networking events – BEWARE. Make sure you are attending the appropriate ones. Although they are often free (and offer free food and drinks), make sure you aren’t attending them too frequently, as you may find you are talking to the same businesses over and over and neither of you are doing any actual work.
5) Pay Structures
Never over-commit your finances to paying a salary, a new employee is a huge risk for start-ups. It is a commitment to another human being that you are going to fund their lifestyle, with an assumption that its for the long-term.
Do you REALLY need someone full-time to answer the phone, would a virtual PA service work out cheaper? Hiring on a contract basis is not only cost effective, but also entirely performance related. Being from a corporate background, unexpectedly (truly shockingly) I have become a huge fan of performance related contracts. If you set clear goals you can get huge focus for what you are trying to achieve. Most importantly, each role should make make a return on your investment.
If you have suppliers, treat them well, they are your best business buddies. They have probably been talking to your customers for many years and have a great knowledge base. It is important that you choose good suppliers and talk to them regularly. It is in their interest to send leads your way, so being front and centre of their thoughts when the opportunity arises is the aim.
7) Free Courses
It is still true that knowledge is power, but knowledge is usually expensive. However, you will not believe how many free courses there are available to you on the web from World renowned institutions. This year I have attended courses at Harvard and Stanford and the London Business School, all from home. It is like having a 1-to-1 with some of the World’s greatest business minds AND ITS FREEEEEE.
Bootstrapping your way to a successful business is challenging, frustrating at times, but on the whole rewarding. If you are in the market for cloud infrastructure, we have the ultimate bootstrapping cloud appliance for you. Get in touch.
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