How bootstrapping your business can increase your potential success
By Esther Karanja
| July 20th 2020
There are numerous funding options available to get seed money for your business. They range from angel investors to loans, all the way to financial support from family and friends.
Still, securing an investment can no longer guarantee you business success. Even with a good idea and the right amount of start-up capital, your business can end up failing.
However, when you bootstrap your business you are more driven to succeed. Therefore, you minimize the risk of failure. Here’s how:
Become knowledgeable in all areas of your business
Being a ‘jack of all trades’ is not always recommended in building your career but it can be the saving grace in growing your business. When starting your business you need to know all aspects of your operations.
From this you can easily identify the areas that are non performing areas and do something about it. With employees from the get-go, it becomes a bit more difficult to manage and grow your business without spending a lot of money.
Fortunately, nowadays anyone with a passion for creating and running a business can do so without a degree. There are online courses available, as well as books and professional mentorship from successful business people. Alternatively, technology has automated some of these operations. Apps in marketing, inventory and administration have reduced the cost of doing business effectively.
Learn negotiating skills that build relationships
Starting your business with the bare-bones can help to establish your business relationships. Ideally, money plays a big role in securing the best suppliers who are crucial to the growth of your business. However, you need to be creative in maneuvering these connections within your budget.
Negotiating a trade credit short term with suppliers can relieve you from paying the initial expense. Most suppliers don’t generally extend credit to new clients. Still, negotiating with a financial plan and payment milestones can sway them in your favour. That coupled with a well-documented market research can help strengthen your case.
Create and manage a practical financial plan
For business to survive money needs to flow into it. Even with a substantial investment, the daily operations of the business are dependent on a positive cash flow. But limited resources increases your awareness of any disparity between the revenue and expenses.
Any purchases made to the business must be justified as needs to start running the business rather than wants for the business. While things like equipment and nice office space gives clients direct access to you, they also eat heavily into the cash flow. Forecasting your cash flow gives you a clear picture of planning ahead for long term success and financial health.
With good planning and the right skills you can ensure your personal investment becomes a driving force to your success.
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