A common problem among starting entrepreneurs is the lack of big capital to mobilize resources for a business. However, with the knowledge of bootstrapping, or using minimal capital, a business can still get going. In bootstrapping, costs are reduced to a minimum by scrimping on equipment and other materials yet delivering quality products. Here are some ways to bootstrap and get your business going:
- Look at the essentials. Limited resources might discourage one to buy expensive equipment on all aspects of production. Hence, focus your resources on the most important items. In a cake business, you can use inexpensive cake pans but insist on using the best ingredients and mixer.
- Remember your value proposition. Some entrepreneurs unwittingly sacrifice product quality in the interest of saving resources. Do not forget the reason why you want to be in business: to provide best quality products. Forget that, and you would fail.
- Innovate as you go. Copycatting is a good way for starting entrepreneurs. Follow as the leaders do, but don’t forget to innovate. In time, your business would find its unique niche.
- Get the money. For a starting business, it is important to get income as soon as possible. Market your products to your family, friends, acquaintances, etc. Never pass up the opportunity for a sale. Try selling to them in the hope that word gets around, and more people would buy your products.
- Don’t forget the cashflow. No matter how profitable your business is, if you’re perennially out of cash, your business would go kaput. Manage the cashflow well. Try asking for credit terms from your suppliers. Offer discounts to your cash-paying customers. This would keep the cash in.
- Work with what you have. In bootstrapping, you cannot afford to have superstars in your staff. Try working around that by asking people to do work and reserving special talent in needed areas. Ask your neighbors to bake while hire that cake decorator for special orders. This also means you have to do a lot of things yourself.
- Manage your growth. Accept that your limitations in resources would lead in slow growth. When sales are good, try expanding with caution. This doesn’t mean you lose sight of your long-term goals, you only realize that you shouldn’t bite more than you can chew.
- Don’t forget to stop bootstrapping as soon as you’re able. A big mistake for entrepreneurs is perpetually getting into bootstrapping mode. As soon as you’re able, try expanding your capabilities and fully implement your plans. Try having a good relationship with banks early in order to borrow from them once you get out of bootstrapping mode. This would make your food business grow into its full potential and bring you the bucks.