Top 3 Keys to Bootstrapping Your Startup

Today’s guest blog is by Adam Hoeksema, Founder and CEO of ExecutivePlan. Adam is the author of a blog which assists entrepreneurs in the process of writing powerful business plan executive summaries, preparing stand-out elevator pitches, and hurdling the many obstacles encountered during the bootstrap startup phase of a business. Make sure to visit his blog and learn more about How to Bootstrap Your Startup.

In my last post, “Bootstrapping 101:  Why Your Startup Doesn’t Need Outside Funding” I suggested that angel investors and venture capitalists typically invest in companies that don’t need the investment.  The reason that these companies don’t need investment is because they have already built a profitable and cash flow positive business.  So if you can’t get investment without building a profitable business, then you need to bootstrap your startup to profitability.  There are 3 keys to bootstrapping your startup:

1.  Minimum Viable Product ASAP – When you start a new business you typically have a period of time where you won’t be bringing in any revenue.  Your goal is to minimize this time.  How?  You need to get your minimum viable product or service to market as soon as possible.  Your minimum viable product is the product with just the necessary features to get money and feedback from your first customers.  You will learn more from your first customers than you could by reading 100 books or conducting a dozen surveys.

2.  Be Cheap – When you are bootstrapping you can’t afford luxury, especially when you have not made that first sale yet, you can’t afford to pay $5,000 for a custom website, instead install your own WordPress website for free.  You don’t need Quickbooks for accounting if you don’t have any sales yet.  Most web-based business owners don’t need a box of 2,000 business cards either.  You get the idea.

3.  All Consulting Was Not Created Equal – Most bootstrapping entrepreneurs fund the development of their product or service through consulting gigs, but not all consulting is created equal.  Your goal should be to provide consulting services that move you toward an ultimate goal of creating a scalable business model.  There are only so many hours in a day, so consulting is inherently a non-scalable business.  In a service business you can’t report billable hours while you sleep, but you can sell a product while you are on the beach in Tahiti or sound asleep.  For instance, a consulting job where a customer pays you to write a custom computer program for their business is great, but if this custom code can be re-used and sold to other clients in the same industry now your consulting job is your product development.

That wraps up my guest blog post series on how to bootstrap your startup.  Good luck!

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