Many entrepreneurs dream that within a few years they can turn an idea into a successful business and then into a big check that will offer them a chance at an early retirement. But, to achieve this, most entrepreneurs will need significant capital investors and the problem is that banks, venture capitalists and angel investors only fund a small percentage of the most promising new businesses.
The typical start up is funded by money from the founder’s savings, severance checks or loans from relatives and friends. This is why start-up owners need to make sure that every dollar they spend stretches as far as possible. It’s known as bootstrapping, but that’s just a fancy word for building a company on a “shoe-string” budget. Although bootstrapping your business will take you longer to get it to where you want it to be, that doesn’t mean you won’t learn a lot and have a great time along the way.
Here are a few tips for making your start-up self-sufficient and successful.
- Keep a lid on costs
You might dream of having a fancy website and expensive marketing campaign, but they’re not essential. You can start with a website that’s clean and simple with just the bare essentials on it and do your own marketing and PR (see our post, Small Business DIY Guide to PR).
- Wear many hats
Plenty of people have a day job and develop their business in their spare time. They work a 9 to 5 job to raise the dough-ray-me for their start-up, but this is also a good way to learn invaluable skills and test their propositions before taking the plunge and going out on their own. Before hiring anyone ask: “Can I do it myself?” What’s wrong with being Chairman, CEO, CFO, COO and VP-Human Resources? Isn’t that what they call multi-tasking?
- Find a less expensive way
When you’re searching for IT solutions look up to the cloud. You can rent data storage and plenty of applications on a per-use basis, rather than shelling out for expensive servers or program licenses. Apple even offers business apps on its iPad. If there’s a service you really need but can’t easily afford then why not try to barter? For example, if you run a marketing consultancy, you could agree to do a few hours of work for free for an accounting firm in return for some bookkeeping help. Focus on building your business before you look for financial backers. They’re not the most important ingredient for a successful business – your clients are. After all, at the end of the day, it’s all about increasing your customer base, before increasing your capital base.
- Be prepared for the unexpected
As a small business owner you are so focused on making things go right for your business that it doesn’t leave you much time to focus on what could go wrong. Owning a small business, no matter what the industry, comes along with some risk. Regardless of how successful you are, if a lawsuit is brought against you, it could be financially crippling to defend your business. You want to be sure your business is properly protected. Having the right small business insurance including professional liability insurance (errors and omissions insurance), general liability insurance and business owner insurance customized to the risks your business faces will give you the peace of mind to focus on making your small business a success. Hear other entrepreneurs tips for starting a small business.