Bootstrapping your startup – 8 Fundamental rules – Magbe Savane (2024)

Bootstrapping your startup – 8 Fundamental rules

Bootstrapping your business is definitely NOT a cake walk. But it does save you a lot of stress in terms of the pressure of debt and investors. Having to reinvest every penny back into the business instead of taking some home can produce extremely difficult times and everyone who has the courage to go through with it needs some good advice. In fact, you’re relying on very little money and if you don’t make informed decisions there is every chance that the business could fail.

So, based on my personal experience of growing my business through self-generated funds, here are 8 tips to get you through it.

1. Watch the cash

Start by having a separate business account so that you can keep a close eye on what’s happening to your cash. Utilizing your scarce resources in the best way possible is very important to succeed when funds are low. Be innovative to help you last long. Spend only if you think it will give returns or will help you find and/or keep a customer. It is easy to lose sight of where the cash is going so a solid business plan to prioritize expenses is very important even before you start functioning. Figure out what are the essential expenses and then stick to them no matter what.

2. Don’t get into credit card debt

Accumulating debt on your credit cards is one of the easiest and the most dangerous things you can do. Unless you can pay them off on a regular basis they really can get you into deep trouble. Your personal finances could be jeopardized and so one rule that I have followed from the beginning is never to build a credit card debt. I have used them to the minimum when I was building my business. I realized early on that the ownership of the company was entirely mine and that piling up debt would get me into a hole that would be difficult to get out of. Not having debt helps you perform better too.

3. Make that mistake only once

Mistakes are always allowed. Provided you don’t make the same mistake twice. At times you may think that trying something again and again may increase the chances of succeeding. However, it usually means you are repeating your mistake and wasting valuable resources instead of changing your strategy. Trials to check out different markets or hiring people who you’re not sure will deliver are very expensive mistakes when you’re starting off on a small budget. Spending on improvements and enhancements to your product when you still have no idea how much you’re going to be able to sell can be a foolhardy way of growing your business. Remember to sell first and then expand. Identify when you need to stop doing things that aren’t working and focus on those that are.

4. Your team needs to be in the know

If your team doesn’t have all the information they need to achieve goals you’re not going to get this plane off the ground. Be open with them and let them know exactly how and what you are planning to grow the business. Worrying about whether someone will feel bad if you say it to their face is also another way to ensure confusion. Honest feedback and vocal appreciation are both important in their own ways. Your team is your biggest asset when you are bootstrapping your business and working with them efficiently as a team can help your business grow in the direction you want it to.

5. Don’t ignore your prospects

Never lose sight of the fact that every prospective customer is important no matter how big or small. Take care to see that you touch base and contact every single potential buyer that you can. Stay in constant communication, don’t miss any opportunity to interact and reach out to them. This is the only way you’re going to get leads and close deals. Even if some of them may not convert to customers in the present there is always the possibility of it happening in the future.

6. Publicize your way up

Learn to publicize everything you do and achieve. Broadcast launching of products, new developments, getting new buyers, feedback from customers, discounts, offers, useful tips, blog posts, almost anything and everything that you can promote. Frequently share pictures and news online, repost blog posts that are relevant, upload videos and updates as many times as you feel will influence people to think about your products and your company. Get as much advantage out of every event that you can. Generate press by sending out press releases to whoever is ready to print, publish or post. Publicity will get you places the way nothing else will.

7. Do It Yourself

As much as possible when you’re starting out on a shoestring budget you need to avoid outsourcing. Especially things you and your team can manage shouldn’t invite an additional expense. The benefit is that you get to learn the micro-dynamics of managing a business in the process. It gives you the opportunity to learn things you don’t know and enhance your experience and capabilities in the process. Don’t trivialize this learning; it is something that will give you better insight to manage your team and get results from them in the future.

8. Don’t accept a “No”

It’s tough because lots of people won’t want to supply to you just because you’re small. If you want to get things done you’ll need all the grit and determination you can muster. Your networking will come in handy here and don’t be afraid to use personal contacts to help you. Share your troubles and get people on your side. Don’t just give up if someone doesn’t respond the first time; keep at it until you get what you need to keep moving. Above all, don’t take no for an answer, that’s the only way to climb to the top and to achieve your goals.

Lastly, you need to know that you’re not in this alone. Every entrepreneur who starts on his own mettle is in it with you. We’ve all either done it or are doing it right now, trying to self-fund our businesses to gain success.

Yes, it’s scary and yes it takes a lot of willpower, but in the end if you persevere, I promise you’re going to get there.