Wikipedia defines bootstrapping as, “a self-sustaining process that proceeds without external help” A simple concept, but expert advice on how to do it proved a bird’s nest of conflicting suggestions. Here’s an unraveled version of Top 10 Ways to Bootstrap a Business:
- Barter. Exchange your offerings or assets–like your wife’s shoe collection–for the products or services you need–just kidding ladies… NOT.
- Get Customers to Pay in Advance. Remember Rod Tidwell’s motto in Jerry Maguire, “Show me the Money”? Yeah, learn from Rod: when in startup mode, get the money first, deliver later. For example, gift certificates, coupon books, memberships and subscriptions are all vehicles that generate cash flow before you have to deliver the goods.
- Be a Money Mercenary. If you wanna survive, concentrate on immediate profits. Take no prisoners, show no mercy. Don’t spend time on products/services or doing things that don’t generate immediate cash and of course ration payments like you’re gonna be dug in for a while.
- Get Inexpensive Help. There’s lots of inexpensive labor you can tap such as seniors, laid-off professionals, part-timers, volunteers, interns and foreign language students.
- Start With a Service. Service-based businesses generally require less startup capital and generate income faster than product-based businesses.
- Start at Home / Share an Office. Do with less and save on rent. And in the case of home offices, save on commuting costs and deduct some of your home costs as business expenses (if you intend to take tax deductions, make sure to consult a tax expert).
- Lease/Rent or Buy Used Equipment. Leasing and renting serve to push payments into the future. Used equipment is normally cheaper than new and often can be paid for over time.
- Offer Sweat Equity. Exchange profit shares or stock with employees and/or consultants instead of paying full salaries or fees. If you intend to go this route, be sure to consult tax and legal experts on how to structure such deals.
- Do a Side Job / Save. Supplement your staying power by selling your time to generate your own investment funding.
- Form Partnerships. Find related businesses that you can work with in co-selling or bundling products. You also might consider sharing advertising space and costs.
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