Regardless of how much money you're spending, the real trick is to conserve cash. Cash really is king, as they say, because companies have some expenses that simply can't be delayed and can't be put on a credit card. Payroll is the first that comes to mind. Rent and utilities are two other biggies. If there's no cash left to keep the lights on and the employees around, nothing else really matters.
In order to conserve cash, make a concerted effort to use it only when it's absolutely necessary. Barter is an excellent start. (There are several websites that help facilitate barter exchanges, and even large vendors are sometimes willing to arrange a swap.)
Snow advises disciplined use of credit cards. He credits plastic with helping to lay the foundation of his company, but also believes that the best use for a credit card is simply to help a company float expenses for awhile. "Floating your cash using an American Express card--where they give you 30 days to pay--is a great tool. It's not really debt because you're paying the full balance, but it helps smooth the cash flow."
Enjoy the Rewards
No matter what your industry, going it alone can be a huge challenge. But when the struggle is over and the business is running smoothly, you'll have the incomparable pleasure of knowing that you did it yourself. Those feelings of control, ownership and accomplishment are often worth more than all the VC dollars in the world.
For More Information
- Bootstrap: Lessons Learned Building a Successful Company from Scratch by Kenneth L. Hess details the author's journey through a self-funded business.
- Check out Financing Your New or Growing Business: How to Find and Raise Capital for Your Venture by Ralph Alterowitz and Jon Zonderman for the lowdown on startup financing techniques that really work.
- With information on more than 101 financing sources, Financing Your Small Business is a thorough guide to raising money. Inside you'll find the scoop on federal loans, business-friendly banks and more.
- These entrepreneurs bootstrapped their way to success, and you can, too. Click here to see what they did.
David Worrell has bootstrapped two businesses, and would do it all over again in an instant. You can reach him by phone at (704) 614-2701.