Top Tips for Bootstrapping Your Startup
Launching a startup is one of the most challenging steps you’re going to take in your professional life. But it will be worth it if you play your cards right. Without a doubt, the COVID-19 pandemic has had a major impact on the way SMBs operate, but as a startup you need to consider many other challenges that lie between you and long-term success.
By now, you have probably considered your financing options and understand that you need to leverage angels and crowdfunding to get your business off the ground. What you might not have known, though, is that bootstrapping your startup involves more than securing the investment capital. Your goal right now should be to ensure cash flow and minimal financial waste with the right tech, accounting tactics, cost reduction methods, payment diversification, and more.
Let’s take a closer look at how all of that ties together and talk about the top tips you should use to successfully bootstrap your startup in 2022.
Think in projects and project accounting
First things first, taking a more granular approach to managing your startup can prove beneficial in terms of efficiency, productivity, and output. It will also allow you to better manage your cash flow and allocate financial resources to the right departments and towards the right goals. In other words, you need to start thinking in terms of projects and project accounting.
Every department in your startup should have different projects, which will allow you to manage your money more efficiently with project accounting and achieve concrete micro-goals and objectives. Instead of spending money on content marketing as a whole, for example, you can create projects for every type of content you’re going to put out and allocate the right amount of financial resources.
You can use the project management method to better manage all areas of your new business, and to stay in control of your finances. This is a big problem for startups, which tend to overextend their budget capabilities in the first year, which leads to low survivability in years two through five.
Diversify your payment methods
As a startup, your goal is to maximise cash flow as much as possible within the first year, and to do that, you need to diversify your payment options as a part of your business plan. No matter if you are in the B2B or B2C field, or the industry you serve, it’s important to capitalise on every customer touchpoint and allow your customers to pay on their terms.
Payment diversification is a big driver of cash flow stability and revenue growth nowadays, as new payment methods become available to the modern consumer. For example, direct carrier billing is extremely popular nowadays, and according to the new direct carrier billing index, the industry is currently worth more than 30 million US dollars.
What does this mean for you as a startup? It means that you need to allow people to purchase your products or services by charging them to their mobile phone carrier bill. But that’s just a single piece of the diversification puzzle.
Your customers should be able to pay in almost any way that suits their needs. Cash, credit and debit cards, 3rd party payment platforms, even cryptocurrency and direct carrier billing - make sure you open all doors to accepting as much money as possible. You will need it in the coming years.
Implement CX software early on
Automation is a big part of smart financial management nowadays, especially in the startup field where you need to “manage” every dollar and make it work for you. Luckily, there’s a piece of automation software for every department nowadays, and your goal should be to automate as much as possible early on in order to avoid cumbersome financial expenses down the road.
However, it’s not just about automation, it’s also about choosing the right quality-of-life software to empower your employees and ensure customer success. You can minimise payroll expenses and avoid hiring new support staff, for example, by implementing free help desk software and a robust ticketing system that will save you time and money.
Complemented by a comprehensive CRM, a help desk system can help your startup manage that initial influx of customers quickly and capitalise on every new lead. You can then use the software to maximise the potential of every new customer and convert them into lifelong brand advocates. This is how you use software to minimize resource waste and create an efficient operation.
Cut your marketing expenses from the start
Speaking of reducing financial waste as much as possible, it’s important to note that marketing alone can put a big dent in a startup’s budget if you’re not careful. Before, during, and after rollout, you will be spending considerable resources on digital marketing and building an online presence.
Your goal should be to minimise these expenses without compromising on quality or output. One of the ways you can do that is to save money on visual content creation. Instead of hiring graphic designers, for example, you can use a free online graphic design tool to create beautiful visual content for your site and social media without breaking the bank.
Another way to minimise marketing expenses would be to focus on SEO, email, and other low-cost tactics instead of heading straight to paid advertising.
Build cash flow during rollout with demand generation
Finally, it’s important to focus on demand generation before and during rollout, and to use the right demand generation tips to build hype and brand authority. This will help you ensure sales even before rollout, and it will allow you to generate leads organically when you launch.
Demand generation is all about using the right inbound marketing methods, such as creating quality blog content, engaging videos and visuals, teasing the audience on social media, offering free incentives and sneak peeks, and even launching a brand podcast. You can use all of these before and during rollout to maximise your marketing dollars and build your cash flow early.
Bootstrapping your startup goes beyond securing your financing. It means reducing financial expenses as much as possible until you break even while maximising cash flow and revenue. To achieve that, you need to use the right software and make the right managerial decisions and investments from the start.
Consider using these tips to ensure your startup’s growth within the first year and to build long-term success safely and efficiently.