If you are starting your own business, looking for funding from VCs and angel investors is a way to do it. But not the only one.
To launch your firm, you don’t need to raise a sizable amount of money. In truth, many great entrepreneurs have achieved success solely through their own efforts, without relying on venture or angel investment. Such is the case of Lazo 🤓. Let us give you a few pointers to get you started.
Bootstrapping is the process of turning an idea into a business using savings, and concentrating on sustainable growth by reinvesting the earnings rather than seeking outside capital.
The main benefit of taking this path is that you’ll maintain total control over your startup from day one.
Founders often rush their first rounds and get diluted too quickly. So, when they reach a Series A or B, investors don’t find these companies attractive. Most of their value has been captured by early-stage investors and the founders don’t have a reasonable amount of control, which can be dangerous for the company’s future.
It can be crucial for the organization to have two leaders. Since most of the labor is done internally when bootstrapping, the co-founders’ skill sets must complement one another. You have a better chance of being able to do everything between the two of you and keeping costs down if you are each good at different things.
Not every business is suitable for bootstrapping. Successful businesses take decisions that will allow them to produce cash as quickly as possible.
If it’s a SaaS, begin delivery with a minimum amount of clients as soon as possible. If it’s a free app, start looking for sponsors and advertising immediately. Don’t exhaust your reserves without incoming money or you won’t be able to recover.
Spending from a personal bank account is dangerous; instead, fund a bank account just for your company. This way, you’ll be able to daily monitor and understand what increases and what decreases the cash flow from the firm.
Tracking expenses and determining burn rate requires patience and perseverance. It will genuinely distract you from your focus, which should be product development and finding product-market fit. But it is critical for your survival.
Your two key metrics to look out for weekly? Burn Rate and Runway. (Read about how to manage Burn Rate and Runway here 👈).
Finally, as soon as possible consider hiring a specialist to do this painful but essential task. If you want to talk to us to consider your options, you can get a free consultation call here.
Make a list of all the things you have to pay for after giving your financial situation some thought. Ask yourself honestly how much money you need each month. How long until going without money becomes a problem?
Focusing on developing an MVP is crucial while building a bootstrapped company since it is a way to start producing cash quickly (as mentioned in section 2). Focus on the fundamentals. Create a value proposition that engages users in the most direct form. That will enable you to test your concept and begin making money fast.
Avoid trying to create the ideal product from the start; it will only lead to failure. Founders always say that if your MVP doesn’t embarrass you a little when you launch it, you’ve launched it late.
You should know there is usually no silver bullet when you are bootstrapping; it’s all about perseverance and hard work. You must be willing to put in a lot of work and make sacrifices. Prepare yourself mentally for obstacles and failures along the journey.
Finally, an obvious statement: starting a business on one’s own funds is not a short-term plan. Don’t expect immediate results because it will take time to make a profit and bring in revenue. A less obvious statement? Unfortunately, not all businesses make sense, and not all businesses are meant to be bootstrapped.
Of course, taking a rational decision is not always easy. Not because we are too emotional, but because we rarely have all the information in hand. The advice here is quite simple: this will be really hard. Think it over before making the decision to start your own venture.
That being said, as fellow bootstrappers, allow us to add one more piece of advice: dream big and ENJOY THE RIDE! Sure, take the rational approach, but don’t underestimate the entrepreneur’s journey either.
And remember, Lazo is here to help. Schedule a free consultation call if you want to consider subscribing to any of our products. You’ll need all the help you can get, that much we can promise!
The Lazo Team 💜.