Launching a new business can seem nearly impossible.
If you pay attention to the major online publications and social media it can seem like a ton of money is necessary to launch a business.
But it seems that most successful companies actually bootstrap their launch. They get by with little or no money when they’re starting out.
Even if they have funding the ones that last a long time seem to be pretty frugal in the beginning.
Let’s say you have a great idea for a new business. You don’t want to take on investors. You want to keep control and ownership. You want to bootstrap the company and build slowly over time.
Here are a few tips for making sure the launch gets you off in the right direction…
#4. Get Revenue Flowing
Cash flow is what matters the most in a bootstrap business. It really matters for any business or even any individual. No matter the size or perceived success.
There are a lot of businesses you can start that will get cash coming in right away. Even before you provide the product and service.
Many businesses in fact began by providing services in order to get cash coming in that they could then invest into the products that they wanted to build.
Whatever it takes to bring in early revenue, do it. As you bring in more money and build you reserves, you can begin to do more of what you want and less of what you need.
#3. Analyze Costs Constantly
The other side of cash flow is costs. It’s really easy, even for a startup, to spend a lot of money. There is almost always an expense or ten that you can’t plan for.
And when you’re in the heat of things a few months in it’s easy to start spending money. Especially if you get a few clients and it starts to feel like you have money.
Some costs are good. If they lead to more money, do it. But things like offices or desks or things like that, you can probably get by without them.
#2. Have Cash Flow Options
It’s good to have emergency cash flow options. Times will likely get tough at some point and it’s good to have cash to handle it. Lines of credit are good to have. You don’t have to use them and in fact you probably shouldn’t. But it’s good to have them and to keep as much as a bank will give you. Especially at launch when you may need a little extra from unforeseen expenses.
#1. Slow The Top Line Growth
At launch, you may have more opportunities than you know what to do with. It does happen to some businesses. Imagine the first day of a retail store when the curiosity is high. It can seem like a good thing to let all those paying customers inside.
But it’s actually one of the worst things that can happen. The store probably isn’t ready for that many people. It will lead to unhappy customers. Customers that probably won’t come back for a second visit.
At launch or shortly after launch, many companies have too much demand. Southwest Airlines experienced this in the 1980s and 1990s. They slowed their top line growth on purpose, only going into about 2 new airports a year until they could handle more growth.
Slow and steady often wins the race.
Conclusion
Launching a business is tough. You’re not entirely sure what’s going on. There are always things that come up that you could never plan for. If you’re bootstrapping you’ll likely need more cash than you need. So heed these tips if you’re looking at launching your new business soon.
