Cash Shy? Try Bootstrapping Try these tips for building a successful business with little capital.
By Bob Reiss
Opinions expressed by Entrepreneur contributors are their own.
I define bootstrapping as "pursuing success with limited resources and with the help of others." By limited resources I mean a shortage of money or knowledge. Here are some tips and ideas to help solve these shortfalls for small and wannabe entrepreneurial business owners. These ideas are particularly apropos in today's environment.
Barter
Barter, one of the world's oldest forms of commerce, is thriving today because it allows companies to trade their products or services for other needed products or services with little or no cash involved. You can utilize your excess goods, manufacturing capacity or time to obtain needed things of every imaginable variety. Bartering can also help you reach and acquire new customers through satisfied trading partners that, if pleased, will buy again with cash and provide good word of mouth to others.
Most barter today is done through exchanges that match up the traders for a fee. You can learn more about the details and find a barter exchange near you by doing a simple online search or visiting the International Reciprocal Trade Association .
Free Consulting
SCORE is a government agency with the mission to provide resources and expertise to maximize the success of existing and emerging small businesses. All SCORE counselors are volunteers, mostly retired executives who want to give back. There is no charge, and everyone who calls gets an appointment. There are more than 370 chapters in the U.S. SCORE does not loan money, but it will advise you on how to get it. Visit the website to find your local office.
The Small Business Development Center is another government agency that basically does the same thing as SCORE but with paid employees and even more educational classes. There are more than 1,000 centers in the U.S. Like SCORE counseling, SBDC counseling is also free.
Mentors
Mentors are experienced, successful businesspeople who are willing to help entrepreneurs get started and grow at no charge. A good one can be the key to success for an emerging company. Mentors can be found in myriad places: family, former teachers, suppliers, the local Chamber of Commerce, people you admire, etc. If you find a good one, be sure always to keep him or her in the loop and say thank you.
Special Offers to Key Customers
It is difficult for small companies to sell to large customers in any environment. An effective way to overcome this challenge is to offer your target an exclusive: your product, a package, a design, a channel of distribution--something special and different from the competition. The exclusive can also be time-sensitive. In return, you can ask for distribution in all of the company's outlets, free ads, better payment terms or any other goody important to you.
Suppliers
Almost every company needs reliable suppliers. They can contribute to the quality of your business with on-time delivery or innovation and solve some of your financial problems by giving you extended terms. Some suppliers may even be willing to invest in your company. The best suppliers can help make you more competitive and reliable. To gain supplier cooperation, treat suppliers fairly and pay all of their bills on time.
Publicity
Getting coverage about you, your company or your product in print, on TV, on radio or on the web can be more credible than a paid ad. You need not be an expert to get such media coverage. Remember that the writer's job is to write, and they all need stories. Why not yours? Start by approaching your local media with interesting facts or anecdotes about yourself, your product or service and how you started the company. Writers usually prefer the passion of the company founder to a pitch from a professional publicist.
Outsourcing
Outsourcing can convert the fixed costs of full-time employees to the variable costs incurred only when you need them. This is a major cash-saving strategy that also can yield better quality and know-how as well as access in the case of sales reps. The myth about outsourcing is that you lose control. You may actually have more control because if a vendor doesn't do a good job, you can just find another. You need not sacrifice control by outsourcing. Another myth is that outsourcing means sending work overseas. This does not have to be true. Anything not done in house is outsourced, whether you get it done down the street, in another state or in another country.
Building Trust
If you are trusted, customers will want to do business with you, employees will be motivated, and lenders and investors are more apt to give you money. You build trust by refusing to compromise on doing the right thing and conducting business ethically. Trust relentlessly pursued can pay great dividends.
Selling
Selling is "persuading someone to take an action favorable to all parties." There is no selling gene. Selling is an acquired skill best honed with experience. Everyone in the company should be selling with the CEO being the most important seller. There is no cash outlay for selling except for travel. You can do it.
Your attitude is a crucial success factor, so keep your passion high. Don't let fear of failure hold you back. Keep your ego under control, take care of yourself, rebound quickly from setbacks and always watch the cash.
