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How To Bootstrap Your Business ?


wealthymattersHere’s a five-step process you can follow to give you the best chance of success while bootstrapping your business:

Step 1: Prove Your Concept

With limited funds, it’s more crucial than ever to prove your business concept before investing your valuable resources. If you’re reselling an existing product, this step is a bit easier given the existing demand. But make sure you’re very clear on how you’ll be adding value — and don’t say via low pricing! Will you be offering a unique branded experience or adding informational value?

If you’re creating a new product, make sure you’re able to validate that people want — and are willing to pay for — your product before you invest heavily in mass manufacturing. Get your prototypes in front of as many people as possible, take pre-orders or even launch a Kickstarter campaign. Nothing is worse than manufacturing 5,000 new items that nobody wants.

Step 2: Do/Learn as Much as Possible

Wait a minute … How am I going to build a real business if I’m doing everything? And are you really suggesting I do everything? As in, learn to code and even do my own accounting out of the gates?

In short, yes! I recommend doing as much as possible in the early days of your venture, especially if you don’t understand the underlying concepts. This often requires performing a task or learning a skill that you weren’t anticipating.

You’ll save money doing things yourself, of course. But more importantly, you’ll gain a deep understanding of your business that will be incredibly valuable as you grow.

It’s nearly impossible to manage people and/or outsource tasks if you don’t fundamentally understand them. In fact, it’s often a precursor to disaster. You won’t be able to do this for every aspect of your business, but the more areas you can understand well in-house, the better off you’ll be in the long run.

So teach yourself the basics of CSS and HTML and then go and outsource your layout and design work. Get a good grasp of the fundamentals of finance and get a few months of bookkeeping experience under your belt and then hire a bookkeeper to manage the books on a monthly basis.

I’m not advocating being a one-man or one-woman shop forever; that’s no way to build a business. In time,its necessary to have either an in-house team or contractors to manage most aspects of your business, from accounting to customer service. But at the beginning you need to do your own accounting so that you understand how the books work. You have to answer countless emails and phone calls so that you get that inside knowledge of your business that is crucial to helping you grow and scale it.

Step 3: Systemize Your Roles and Processes

Once you have a firm grasp on most aspects of your business, it’s time to start handing off tasks to others. Delegating responsibilities is one of the most crucial steps for successful growth. It’s also one of the areas most fraught with frustration and friction if you’re not intentional about how you do it.

The Wrong Way to Scale: Hire someone, give them a few general areas of responsibility and hope they do a good job

The Right Way to Scale: Document your critical business processes and hire people to execute (and improve) those processes

The books Work the System by Sam Carpenter and The E-Myth Revisited by Michael Gerber are go-to resources for how to best create a process-driven company that controls chaos, enables delegation and allows you to scale.

Step 4: Start Plugging In Key Team Members

Once you have systems and documentation in place, it’s much easier to start plugging team members into roles that are clearly defined and documented.

But growing a team with a bootstrapped company is a bit challenging. Unlike bigger companies, you probably can’t afford to have someone dedicated to HR and someone else focused solely on graphic design. Instead, you’ll likely have to pick a key team member or two who will be required to wear a lot of hats.

The most important thing to have early on is a trustworthy, reliable person who can act as the operating core of your business. Someone who really understands your customers and the different aspects of your business, and can serve as the go-to person for general operations.

It’s not too difficult to outsource graphic design or programming tasks. But it’s extremely difficult if you don’t have a person with a good high-level understanding of your business to manage customer service tasks, supplier issues, etc. Having someone in this operations and customer service role is often the best first hire you can make.

Step 5: Decide How Big You Want Your Business to Be

If the ultimate goal of owning your own business is to provide a full-time income and flexibility/time to do what you want, that’s easily accomplishable with a six-figure business, a small team and minimal stress. But if you’ve got your eyes set on something bigger — a multi-million dollar business, for example — you’ll need to take a different approach.

In the book No Man’s Land: Where Growing Companies Fail, Doug Tatum discusses how most founder-led companies stall out at the high six- and low seven-figure mark. He argues that growing a company past that revenue point, an area he calls “No Man’s Land,” requires a different strategy than what was originally used to scale the company.

Instead of using a small team to leverage the skills of the founder, getting to that next stage requires building out a full-fledged team of area specialists to legitimate scale. It requires taking a hard look at your business model to see if it’s viable when paying market rates for staff and leadership. And it usually requires a few years of significant investment (and often financial stress) to grow the team ahead of the normal business curve to support that growth.

 

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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