Why Bootstrap Financing

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In our experience, entrepreneurs who know bootstrap financing succeed much more. As you're running your business, you'll receive numerous offers from different retailers & service providers claiming their products will boost your company's sales. Truth is, if they don't have guarantees in place, 99% of them are either hyping, or - most likely - lying. You can boost your sales - and most importantly, your profits - by keeping a smart eye on your finances.

The Basics of Bootstrap Financing

Have a goal: Where do you want your company to be in 5-10-15 years? Then, start small, think before you buy, and learn to barter. Most importantly, keep a tight fist on all your expenses by buying only what will help you reach your goal. Even if your grandmother just granted you a huge chunk of cash, or you received something from the SBA, or millions from a Silicon Valley venture capitalist, bootstrap as much as you can.

Manage Cashflow Well

You'll improve your bootstrap financing dramatically if you keep your inflows high, and your outflows low. Constantly find ways to widen this gap. Cashflows is the lifeblood of your company. To do this, improve your accounts receivable by collecting quicker. If you have accounts payable on hand, delay it for as long as possible without penalty. Rid excess inventory. Most importantly again, manage expenses wisely by spending only on what fits your goal.

Things You Can Do To Save

For non-commodities, we recommend quality over price. For commodities, however, here's what you can do: Trade your services for other services or products. Buy a budget notebook that fits your requirements from Dell. Make and print your own letterhead. Steal a ballpoint pen and other essentials from your home. Use a small office for now; even your home office might work if you're still working on your own. Buy generic-commodity products. Most of the time, brand names are repackaged generics. Save up! You'll need it in the future. Simple, quick conclusion: Companies that bootstrap well, succeed.

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Posted on March 11

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