3 Rules of Bootstrapping

Bootstrapping takes guts.  It’s often easier to assume a check is going to come in, and roll out most of the risk to an investor.

But what alot of us don’t take into consideration, is investors don’t invest until the majority of the risk has been eliminated.  So every Entrepreneur will have to plan on bootstrapping at some point in the game.  Whether you’re bootstrapping to elminate risk, or you’re just bootstrapping the whole damn thing, there’s alot of pain and suffering that comes along with startup bootstrapping.

Rule #1 of Bootstrapping: Prioritize, Prioritize, Prioritize.

During the bootstrapping phase, time is limited.  Cash is limited.  Startup credit cards are limited.  Everything is limited!  That’s why prioritizing is the most important rule.

Prioritizing when bootstrapping doesn’t just mean as cheap you can, as fast as you can.

It means:

  • Quality, with a conscious eye on price.
  • Following the 80/20 rule.
  • Investing your time and money for profit.

You see, normal people don’t think of their time as profit.  After all, we go to work we get paid for our time.  We come home, we don’t get paid for our time.  But, your time is always an investment to someone.  As an employee, you have an ROI to your employer.  As a parent, you invest your time into your children.

Also keep in mind, it may be fun to sit around & brainstorm ideas all day, but at the end of the day…if nothing gets executed, you have nothing.

Rule #2 of Bootstrapping: Delegate, Delegate, Delegate.

Delegating goes hand in hand with prioritizing.  Again, so important for startup bootstrapping.  The DIY approach may be cheap, but in the overall scheme of things, it’s really not.  Let’s look at this scenario:

  • I can’t count how many times I’ve seen an Entrepreneur try to do accounting.
  • It takes them weeks to do what an accountant could’ve done in a day.
  • Nothing wrong with that, but had the Entrepreneur put those weeks into doing what he’s good at, he would’ve made a much larger profit on outsourcing the accounting.
  • So look beyond the immediate payout.
  • You may be writing a check to that accountant, but look at the extra sales that were produced that month with your delegating and freeing up of your time.

When you’re bootstrapping, remember, your world revolves around profit.  Just keep in mind, the profit may not always be as obvious.

Most of us Entrepreneurs get used to this mindset after a while.  I can’t even buy toilet paper now without trying to figure out where the profit is.

Rule #3 of Bootstrapping: Synergize, Synergize, Synergize.

Always be on the look out to synergize anything and everything in your startup bootstrapping.  The concept of synergy is:

  • 1+1+1= 111
  • That means the sum is greater than what could be produced by the individual parts alone.
  • Synergize complimentary products & services.

What are some ideas a startup can synergize?

  • A hair salon can synergize with a nail salon, for example, by sharing customers, rental space, equipment.  They target the same profile customer, yet have complimentary products/services.
  • Synergize your own skills.  Extrovert?  Find yourself an Introvert.  Sales driven?  Find a partner who is consumer driven.

Synergy has basics that come first though:

  • Seek to understand.
  • Then seek to be understood.
  • That underlying understanding is what establishes the trust and bond necessary to synergize.

There’s definetley a lot more rules & details of bootstrapping, but the goal of this was to keep your eyes on the big picture.

 

 

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