Bootstrapping your business is at the heart of avoiding the VC trap. Every business needs money: Employees need to be paid, you need computers and supplies, raw materials need to be purchased, or maybe you just need an income while you are getting things started.
As you grow your company the financial demands don’t go away, in fact they increase. You can see potential growth, there are multiple opportunities you could pursue…but these require more employees or more raw material. The lure of raising money becomes stronger, and with the hours you are potentially working to grow your business while maintaining positive cash flow, all of a sudden selling some ownership of your business to get some relief doesn’t sound so bad.
That’s when it’s time to buckle up and remember that this is YOUR company. Don’t sell a piece of it unless you absolutely have to. Remember how VC Math works? Keep that in mind when you are feeling the pain.
When it comes to bootstrapping we are going to cover three different areas:
- Finding Alternative Sources of Cash For Yourself
- Finding Alternative Sources of Cash For Your Business
- Running a Lean and Efficient Organization
All three of these are important but early stage business without employees may be more focused on finding alternative sources of cash for a founder or co-founders, while more mature organizations will need to be focused on staying lean and finding alternative revenue streams for the organization. To start with, let’s consider alternative sources of cash for a founder or co-founder.
The primary source of side-gig revenue for most founders is consulting revenue. You are starting a business so you likely have some expertise. Figure out how you can sell that expertise to customers at an hourly rate. Some tips on finding potential clients and getting the cash flowing:
- Leverage Your Network: Start with your existing contacts. Reach out to former colleagues, friends, and acquaintances. Let them know about your consulting services and ask if they know anyone who might need your expertise.
- Tap into Online Platforms: Sites like Upwork, Freelancer, and LinkedIn can be goldmines for finding consulting opportunities. Craft a killer profile that showcases your skills and experience. Don’t hesitate to apply for relevant projects or reach out to potential clients directly.
- Be Proactive with Cold Outreach: Sometimes, you’ve got to hustle. Identify businesses or individuals who could benefit from what you offer. Craft personalized pitches that highlight how you can solve their problems or add value to their projects. It’s a numbers game, so don’t get discouraged by rejection.
- Attend Industry Events: Networking at industry events can open doors to consulting gigs. Whether it’s conferences, workshops, or meetups, be there. Strike up conversations, exchange business cards, and follow up afterward. You never know where a casual chat might lead.
- Offer Your Expertise for Free (Initially): Hosting free workshops, webinars, or even writing guest blog posts can help showcase your expertise. It’s a way to build credibility and attract potential clients. Once you’ve demonstrated your value, converting those leads into paying clients becomes easier.
- Collaborate and Partner Up: Look for opportunities to collaborate with other professionals or businesses. Partnering up with someone in a complementary field can open up new avenues for consulting work. It’s a win-win situation that can lead to bigger projects and more clients.
- Ask for Referrals and Testimonials: Satisfied clients can be your best marketers. Don’t be shy about asking them for referrals or testimonials. Word-of-mouth recommendations are incredibly powerful in the consulting world.
- Create Valuable Content: Establish yourself as an authority in your niche by creating valuable content. Whether it’s blog posts, videos, or case studies, share your knowledge freely. It not only helps attract potential clients but also sets you apart from the competition.
- Experiment with Targeted Ads: Consider running targeted ads on platforms like Google Ads or social media. Experiment with different targeting options to reach potential clients who are actively looking for consulting services in your niche.
- Stay Persistent and Adapt: Finding consulting opportunities can be challenging, but persistence pays off. Keep refining your approach, learning from failures, and adapting to changes in the market. Success doesn’t happen overnight, but with determination and flexibility, you’ll get there.
Best case scenario: Your consulting work helps you build a better business. Clients could potentially provide feedback that helps you build a better product, or maybe you discover a better way to market your product. Consulting like this while building your primary business can be an absolute grind, but it’s possibly the best way to get past the early building stage when your business isn’t producing any revenue.