By Prince Akpah To commemorate the UN International SME Day…
Not all startups have the luxury of getting investors from the very beginning. So, you have to fund your business out of your own pocket. This is what is called bootstrapping.
While this is a good way to start a business, bootstrapping is more difficult than it might seem especially for first-time entrepreneurs. Accordingly, Jumia Travel, the leading online travel agency shares bootstrapping tricks to make funding your own business easier.
Carefully pick your co-founder
When bootstrapping, the majority of the work is done internally, so co-founders need to complement each other’s skill sets. If you’re good at different things, you have a better shot at being able to do everything between the two of you thus keeping expenses low.
Have a business model that generates cash ASAP
The most successful bootstrapped companies have a business model that generates cash as quickly as possible. Without any cash inflow, you will exhaust your cash pool before gaining any serious traction.
Reduce personal expenses
Without a salary, you won’t have money to spend–so don’t expect to live a luxury life when first starting your company. Consider every purchase and only spend what’s necessary.
Do not outsource jobs you can do yourself
When bootstrapping, hiring someone for a job you could do yourself is a foolhardy expense. So, whether you are very busy or not, you should never outsource jobs you can do yourself.
Watch out for intending investors
Bootstrapping does not mean you should not watch out for prospective investors. So, keep an eye out for people who may be willing and able to invest in your business. Build relationships with them, but don’t ask for money until the time is right.
Start marketing before you think you’re ready
Many entrepreneurs wait until their product is ready before they start marketing. This is not advisable especially if you are offering a product that people are interested in. Therefore, find good, cheap, effective ways to reach your potential customer in the early stages of your business. And whatever profits you do make, put as much back into marketing as you can.
Invest instead of spending
Don’t spend money on anything that doesn’t have the ability to put money directly back into your business. View the expense of these items as an investment, but be sure the investment has the ability to provide you with a positive Return On Investment.