Posted by SCOTT GRIEST
9 September, 2016
Now that you have worked tirelessly, night and day, to get your business off the ground, the reality confronting you is the hardest part yet, finding financing, especially from traditional lenders such as banks. Well, there is good news. Rapid Capital Funding's small business financing products are in greater demand than ever (which means we're on to something). Often our client's requests are for much more capital than which they qualify. But our merchants are fearless when it comes to business, most use the financing for mission critical needs then bootstrap for the rest, because failure is not an option.
There are five successful keys to bootstrapping:
1. Focus on cash flow! Most small business owners focus on profitability, and that's a good theory. Realistically, theories don't pay the bills, but cash does. Focus on clients and products that pay promptly or even prepay, stretch your supplier's terms to the limit and conserve every cash expenditure.
2. Forecast from the grass roots, but not from the top-down. For example, add a work shift to install 15 more units a week; versus focusing on the need to gain 10% points of market share in your local market. The first is much more tangible and easy to focus on, measurable and thus attainable.
3. Hold off on recruiting "big league" players to staff your team that require a big payroll. Hire eager, talented candidates that will not only strive to prove themselves but also foster creativity and new solutions. The key for the business owner is directing all that energy towards the goal of generating cash!
4. It doesn't need to perfect! Your product or service will never be perfect, and once you think you have it perfect, clients will most likely have moved on. It's a constant revision to deliver a great product or service that provides value. Just get your product, offering or service out there and refine from there.
5. Understaff initially and add staff only when the breaking point is near. The growth your forecasted may not happen for another three, four, five or six months, so why pay for extra staff until you need them.
We know there are many are other ways to save your cash and build your business. The ones we mentioned are the top ways to avoid trifling away all your cash. Don't focus on the pennies of profits and let the dollars of cash slip through your fingers!