Bootstrap your startup

Stop building your business to raise capital and just build a business

I encounter hundreds of entrepreneurs who are looking to raise capital each week. Most of the time, these entrepreneurs are looking to raise capital far too early in the life of their startup.  I have watched as a couple of entrepreneurs have literally lost their opportunity to build a successful startup because instead of working on building a customer base, they are out looking to raise capital.  I believe that growth capital would come easy if they would just find the customers first, and if you bootstrap with customer capital, you may just find that you don't need to raise outside investment.  I think there are 3 basic steps to bootstrap a business.

1.  Minimum viable product ASAP -  Your product or service does not need to have 150 features or add ons on day No. 1.  When you are bootstrapping your startup you can't last long without bringing in revenue, so you need to build the minimum viable product or service that you can sell, and then sell it.  Your customers will then help you determine which features to add, and they will probably even pay for the development of the feature.

2.  Earn expert recognition - If you want to bootstrap your startup, then you are going to need to do your own marketing, PR, website development etc.  I suggest that you find a niche where you can establish expertise.  For instance, if your startup is marketing company, don't just claim to be a marketing expert.  Be the marketing expert in the ebook industry, or the salon industry, or the apartment industry.  To put it simply, choose a niche and then dominate it.

3.  Stay focused on the goal - It is easy to get distracted when you are bootstrapping your startup.  All of a sudden someone offers you a $10,000 consulting gig, you are tight on cash, do you take it?  That is a decision you will need to make personally, but if you really want to build your startup you need to make sure that you keep focused on building the company that you want to build, not taking odd jobs that distract you from your goal.

There you have it entrepreneurs.  Forget raising capital and build a profitable business.  Once you build a viable business you will be able to raise capital, or you just won't need it anymore.  Good luck! 

(Image source: americanloansandfunding.org)