For many small businesses, getting funded is the biggest barrier. There are lots of methods to choose from for small businesses without seeking venture funding.
Small Business Trends spoke with Nevin Shetty, Co-Founder and CEO of Blueprint Registry on their successful fundraising approach. They’ve done $25 million in sales without any venture capital. Shetty supplied 10 tips for bootstrapping a start up with no venture capital funding.
How to Bootstrap a Startup
Bring New Skills Onboard Through Co Founders and Partners
“Find a cofounder or partner that has complimentary skillsets,” he says. Look to have someone in each of the three key roles of creative visionary, administrator and technician and try to find the partner so these don’t overlap.
Having more than one perspective is essential and a great way to get everything done while keeping costs low.
Find Mentors That Know Your Business Path
Finding mentors and advisors that can help lead you on the journey is helpful. Shetty says you shouldn’t limit where you look.
“They can be friends and family or even co workers, but you’ll need to look for somebody that has more expertise in starting a business than you do.”
Find A Model That Makes Money
Sounds like a no brainer but it needs to be said. The business that use the bootstrapping model the best generate money quickly. Party and event planning and website design are just two good examples. Taking advantage of technology and sending electronic invoices speeds the process up too.
Create A Business Plan — Really!
“Far too many times people just jump into a business without thinking through things,” Shetty says, adding a good business plan will also have a model and competitive analysis.
“Creating a business plan also helps you to form your own idea.”
Keep an Eye on Personal Expenses
Staying frugal when you first start out is a great way to learn the financial ropes for the times when you start to make money. Don’t think about the salary you can draw when you’re a startup-think about reinvesting the cash to grow the business.
Focus on Operations
Bootstrapping is about focusing on the nuts and bolts, about putting all the pieces in place so you can get to where you need to be, eventually.
Shetty suggests focusing on the fundamentals like marketing, accounting, human resources and the rest to build your business scaffolding.
Do What You Can Yourself
There will be a time to hire people on and even outsource, but that’s not in the early days of your company when you’re bootstrapping. Beyond saving cash, doing for yourself is a great way to learn how you want to organize the job when you hire someone later on.
Look at Alternate Funding Sources
You can even get funded through alternate sources like small business loans and merchant cash advances. There are Small Business Administration Loans and even B2B loans to consider.
Get a Great Team
Finding great employees that share your vision is important when you’re bootstrapping. Find people who believe in your mission and understand they will need to be multitasking. In short, you’re looking for people who have an “all in” approach.
“You need people who are dynamic and hungry,” Shetty says.
Know Your Target Market
You might think you’ve already done the work to define those people likely to buy what you’ve got to sell. However, early sales numbers should be the jumping off point you use to make necessary adjustments.
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