It is possible to start and do business with little money or without it or with the help of external investors. Before you try to borrow or raise capital, you should try a financial butstrup. Chances are you’re thinking about creative ways to avoid capital donations or paying high interest rates while having more money to grow your business.
Financial bootstrap is the least risky way to start a business while maintaining freedom of movement. There are many ways to keep working capital in the fund. If you read the following, you can come up with a lot more.
Sales – the number one task to get cash flow
Before you dive into the initial download toolkit, make the sale the most necessary task. Make sure you supply too many items and don’t resell. Satisfied customers will come back for the extras and tell their friends about it, so you can achieve sales with much less effort than the first time. Of course, you should have long-term goals, but you have to make “next week” your time horizon.
If you put sales at the top of your priority list, marketing is in second place. Do marketing every day and you’ll be surprised to see the growth of promotions. Make a marketing plan. It doesn’t have to be a big budget. You can do it a little bit, for example, by getting media coverage; It requires your time and careful preparation. You can start with local press or industry magazines and further develop. You can design and print your own stationery (first business cards).
Get paid on time to save money
The invoice is on time or even in advance. When you’re compiling an invoice, make sure you know who to send it to (this is best with payables). But be careful, the client’s company may have special bill approval procedures, so follow their rules.
Make sure your customers pay within 30 days. In your new business, it makes no sense to play the role of a banker for an existing business.
Here’s an example: The working capital required to finance a monthly sale of $10,000 with an average payout time of 45 days is $15,000. If the estimated period is 60 days, you will need an additional $5,000. From this simple illustration, you can see how much easier it is to have $10,000 in business by getting a contract within 30 days than going to the bank for a $10,000 loan to pay interest. Imagine that you got a loan of $20,000 at 15% per annum. Your monthly payments will be more than $1,800.
You can not only raise the deck for resale, but also reduce water consumption by buying euros. There are some good options that will affect your money and therefore your initial money. Look closely at the relative cost of renting compared to buying or buying used or refurbished equipment. Barter or bilateral trade in equipment and services may be possible or between them.
Notice the difference in cost between cash discounts and extended loan rates. Your cash flow can be a determining factor; If you don’t have the money right now, you need to get a loan or find another solution. You may not need to own the hardware at all, and you can transfer the work to third parties at a lower price, or you can purchase the equipment from another user if you don’t have to use it full-time.
Outsourcing can save money
Many companies are reluctant to turn to outsourcing, especially because foreign call centers often receive poor reviews in the press. This is not necessarily the case, and, for example, 400,000 U.S. tax returns were filed in India in 2005. Companies are increasingly resorting to outsourcing services for payroll and accounting.
You can always return to work in the company when the business grows, and money or time will become cheaper. In fact, so-called back-office tasks can often be effectively outsourced.
Late payment of rent
Of course, it’s good to have a beautiful property at the best address, but if you don’t work in retail, where location can be part of what makes or destroys the business, don’t be tempted by the pawn in your league. Your startup can be the one you can create at home, or you can share your workspace with others. Perhaps there is an abandoned building where you can rent an apartment for a short or cheap period while you are at work.
It’s even better not to have a fixed workplace if you work online. Try a free wireless cafe, if you have one near you, the owner of which loves you, but be sure to buy more coffee and Danish pastries!
Weak or free copies
First of all, your business depends on the quality of the people who work there. This does not necessarily mean that you should have them on the payroll.
You are unlikely to heed the advice when you start your business, but you can create an advisory board with good contacts whose advice and support is important to you. If you make a wise choice, such a group will enjoy working with you and occasionally meeting, perhaps at lunch. You can also create a support group from colleagues, such as other business owners, with whom you can share experiences for mutual benefit.
Students can be a great source of motivated contractors. You may have a business school near you, and its students, especially graduate students, may be highly motivated to work on real projects. It is not necessary to exploit these young people; you’ll probably be able to make a mutually beneficial deal, and later they can become great recruits. You will be able to measure their value in a work situation.
Public money – don’t count on it, take what you can
If a business cannot be supported without subsidies or cheap money from government sources, it is unlikely to be viable in the long run, with the possible exception of social enterprise.