Bootstrapping brings out the best in companies
Photo courtesy of iStockphoto, Donald Erickson
Michael McKay, MJM Consulting, in Ontario insists lack of outside funding hasn't done much to slow Canadian entrepreneurship.
In a recent post on his blog, Mike says many of them are simply bootstrapping their way instead, a technique he says comes down to careful money management:
• Sell early, sell often.Nothing new here. Bootstrappers need to figure out how to bring in the cash because the cash flow will be key to operating a business without investment capital. Focus should be on sales that bring in money fast (in advanced if possible.)
• Put off the bills. No don't be a deadbeat, but put off payments as long as possible. With no investment dollars and thus probably few reserves, the key to your company's success may be orchestrating revenue and bill payment to ensure your limited resources don't run out
• Sell what you're owed. Mike suggests companies like Acorn Partners may purchase tax credits, future credit card receipts, future invoices, existing accounts receivable for cash up front even if you don't get every penny you think its worth.
• Tighten your belt. Don't buy anything you don't need and try to barter or scrounge something cheaper even then. Buy on credit and avoid payting out as long as possible.
Sometimes you'll also need to hold on to that full time job to keep money coming in. For example, blogger Alan Baybridge observed that the co-founder of the social cruise network SoCruise also may be:
the online marketing / affiliate manager at the leading ferry (& cruise) company in the North Sea, Northern Europe, region.
July 6th, 2008 at 5:41 pm
“Tighten your belt. Don’t buy anything you don’t need and try to barter or scrounge something cheaper even then. Buy on credit and avoid paying out as long as possible.” – Words to live by no matter how the economy is doing. Bartering is the way to go and is becoming more and more available, you just got to ask the right questions!
Shiny Up,
Poet Horton
July 6th, 2008 at 6:19 pm
Agreed, Poet Horton. Agreed. Anything you don’t have to pay for puts you ahead of the game. It’s something to remember in business and life.