If you have a definite vision about the direction you want your startup to take it’s sometimes a good idea to minimize investor influence. Nothing against investors but they’re investing to see a return. If they think they see a better, faster way to realize that return they may insist you abandon your vision and take it. To avoid that, you’ll likely need to bootstrap your startup. But bootstrapping is no walk in the park either. What you need are proven ways to extend your cash runway to ensure your startup is able to soar.
10 Great Ways to Bootstrap Your Business
Working multiple jobs is one way to bootstrap a business but it’s not the only way. Especially today. Consider these 10 ways to extend your cash runway.
1) Rent Your Car on HyreCar.com – If your primary or secondary car isn’t used for much more than weekend excursions you should seriously consider registering it with HyreCar.com. HyreCar connects Uber drivers who don’t own their own vehicles with owners that want to make some extra income from their cars. It’s possible to make more than $1,000 per month renting your car out this way and what’s even better is that it’s almost entirely passive income. While your car is out earning money you can be focusing on other things like product development. Find out more about the rental process on their rental guide page.
2) Swap Equity for Expertise – If there is one area of your new business you’re really going to need help with consider offering someone with the requisite knowledge a piece of the company in return for them coming on board. This type of ‘sweat equity’ often pays off handsomely in the long run if you are careful and considerate about who you offer such deals to. Just make sure not to give away the farm in the process.
3) Update Your Office – Whether you work from a leased office or from home there are probably ways you can cut back on expenses that will both save you money and make you more efficient. You might have a landline on your desk but do you actually need it? Are you sending paper invoices when you could send digital ones? Do you have 2 mobile phones when 1 will do? Would it save you a lot of time and trouble if you learned how to type?
4) Don’t Even Think About Buying Software – Virtually everything you need to do on a computer today can be done using a free cloud service. If you’re trying to find a way to extend your cash runway, and you have software purchases scheduled for the near future, find out if there are free, online versions of the software you need. This could free up thousands of dollars for you to use on other things.
5) Don’t Hire an IT Person – Hiring a full or even part-time IT person to handle your technology needs can be an enormous expense. While in the past your options were limited, today you can hire virtual IT support for a fraction of what an IT employee will cost you. You only call on your virtual IT department when you actually need them so you’re not paying for them to sit around the rest of the time reading Newsweek magazine while you go broke.
6) Don’t Buy More Website than you Need – Business owners often get talked into way more website than they need. Instead of going for the bells and whistles, start small. Use a free website from Wordpress. You’ll get a professional looking site that works the way it’s supposed to and provides you the basics. If your company needs something more involved as it begins to grow then you can consider the expensive hosting plan and all the extras.
7) Do Your Own Market Research – Time was when you really needed to hire someone to do your market research for you. But in the new era of big data is that still the case? There are likely free apps you can download to your smartphone that will conduct the kind of analysis you may have paid big money for 10 years ago.
8) Forego Leasing Space – You may be able to save a significant amount of money if you’re willing to swallow your pride and work from home instead of leasing a nice office space somewhere. Even if you can’t work from home perhaps you can lease a smaller space by having staff work from home.
9) Ask Your Customers to Give you Some Promotional Love – Ever hear of Yelp? People use Yelp to both find products and services they need and to write reviews about the products and services they’ve used. If you can identify some particularly happy customers ask them to write a nice review of your business on Yelp or Foursquare. Yelp alone receives 135 million visitors a month so having some positive reviews posted on the site won’t hurt you and is a lot cheaper than paying for advertising.
10) Consider Alternatives to Investors – Over the past decade lots of people have watched their 401k straddle the heights and plumb the depths as we’ve moved from boom to bust and back to something like prosperity. If you’re one of those folks and you’ve been staying up late wondering where you’re going to get the money you need to extend the cash runway for your startup, think about dipping into that up-again, down-again 401k. It’s actually possible to do this without incurring the wrath of the tax authorities. But it’s not to be done on a whim.
There truly is nothing more rewarding in business and no better feeling than that moment in time where you know that you are through the start-up phase and out the other end with a profitable business. The tips above should provide you with some new ideas to keep costs under control and increase your likelihood of success by having a little extra breathing room in the budget. If you have any ideas for extending the financial runway I’d love to hear of them in the comments below.