Bootstrapping. It’s not just a good idea, it’s the surest path to start-up success. Sure, OPM is more fun to spend, but there’s nothing like putting your own skin in the game to kick your drive for success into a higher gear.
Few people are as well-acquainted with this fact than Jim Beach, David Beasley, and Chris Hanks, authors of School for Startups: The Breakthrough Course for Guaranteeing Small Business Success in 90 Days or Less. And over at Entrepreneur.com they share a “blueprint for getting your dream business off the ground without seeking outside investors”: Five Rules for Bootstrapping Success.
Here are a few of the habits and best-practices that make self-funding work not just a viable option, but possibly the best one:
1) Get Operational Quickly–find a product or service that will sell immediately to a large number of customers. Start generating revenue from day one to finance your startup by using the receivables as collateral.
2) Understaff–seriously! Support teams cost money, so you’ve got to wear many hats: CMO, CFO, “sanitation engineer,” etc.
3) Keep Growth in Check–this one may seem counter-intuitive, but slow, steady growth is a better path to building a sustainable, debt-free business. Explosive growth is nice, but it often comes at a higher cost.
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