The biggest problem that start-ups and their creators face is the lack of financial capital. The problem of entrepreneurship is that before you even think what you need for your business to operate, you already spend money. In this case, there are only two solutions. You either borrow money or you bootstrap.
The first solution (borrowing) is the first that comes tin mind of a young entrepreneur and the worst to chose. This solution requires a lot of research and accurate planning and cash-flow strategy, in order not to hit the young entrepreneur as a boomerang of financial destruction, in case that the expenses are larger than company’s income.
The second solution is known as bootstrapping and refers to the action of using a really small amount of money and finding creative low or no cost ways to get your business going. Here are some tips on how to effectively bootstrap your business.
1. Choose your cofounders carefully. When you look for innovative ways a lot of brainstorming and internal cooperation is required. For this reason you need people with who you can cooperate effectively.
2. Design a business model. You need to shape your business’s functions and work on their smooth operation. If you face lack of plan, the a lot of cash will be wasted.
3. Separate your bank accounts. You need to create a bank account only for company reasons, where you will be able to effectively track incoming and outgoing cash, check the flow and have a clear image of transactions.
4. Forget personal expenses. While you will be setting your business, you will not earn a salary. For this reason you need to forget personal expenses and focus only on what your company needs. Remember, you are an entrepreneur, not an employee.
5. Do not outsource jobs you can do yourself. Do the work and save money from useless company expenses.
6. Nothing is impossible when it comes to saving money. If you want to make a website for your business, learn how to code. It can be done.
7. Buy the domain. Don’ think you can do it afterwards, if your traffic day by day increases. You domain is your contemporary ID.
8. Do not accept NO as an answer. Nobody will want to cooperate with you while you are small. Create personal connections and persuade them to do so.