4 Ways to Make Things Happen on a Tight Budget
Depending which source you consult, between 50 percent and 90 percent of all startups eventually fail. The numbers are daunting, to be sure. But it's more important to understand the "why" than it is to dwell on the "how many."
According to research from CBInsights, access to funds is the second-most-common reason startups fail. The problem becomes especially pronounced when entrepreneurs are putting their own dollars on the line because investors aren't exactly lining up to give them money. This is the bootstrapped startup's dilemma.
If this sounds like your business model, don't fear: All hope is not lost. Here are four ways you can make things happen for you and your company on a tight budget.
1. Get started.
Getting up and running is the most critical phase of a bootstrapped startup. It’s easy to be tempted by wanting to make a big splash as you launch your company. Ask yourself how much of a difference that a flashy intro really will make for your business in the long run.
When you’re just getting started, it's essential to keep costs as low as possible.
Don’t outsource things you can do (or easily learn to do) on your own. For example, a selection of free and paid software can help meet your design needs. You probably don’t need to hire someone to create content just yet. Identify time-consuming tasks that won't affect other key areas of your startup and examine which you can do by yourself at least during this lean period.
Reduce all personal expenses. Big salaries? Not now -- the goal is to get to that later. You literally can't afford to live the same lifestyle as founders of multimillion-dollar startups who are flush with others' funding. You don’t need luxurious cars and fancy parties right now. Reduce all personal expenses so you can direct 100 percent of your resources toward growing your startup.
Focus on revenue-generating activities. No matter how brilliant your startup or how grand your long-term strategy, you're poised to fail if you can’t sustain your business with cash in the early stage. The most important thing you can do now is generate revenue and profit to put back into your company. If you're hoping to attract backing from investors down the road, you'll find it much easier to secure the deal if you're able to show your business is a profitable one.
2. Court the press.
New players -- particularly underdogs -- typically struggle to garner media attention. It's unlikely you have the budget to hire a public-relations specialist. And you might not even have the cash to outsource your PR needs to an agency. Here's the really frustrating part: You know that without any attention for your stellar product or service, the early going will be slow.
Focus on podcasts. Look for top and relevant podcasts in your industry as well as podcasts in related or crossover industries. Contact these hosts and offer yourself as an interview source for upcoming podcast features. Each interview will produce a mention and at least one link to your startup's web page.
Find out who's doing founder interviews. Sites such as IdeaMensch specialize in founder interviews, and they don’t discriminate based on a startup's size. Reach out to these sites and publications. Not only will you get some extra attention, but you could get noticed by the mainstream press or investors. You never know -- something big might come out of it.
Become a contributor. While you work to get feature treatment from top-of-market publications, very little stops you from being a contributing expert to these same information sources. Most major publications happily will accept contributed content if your perspective adds value to the field. It's typical for each post or article to run with a small photo and brief bio that links to your startup's home page. Contributing regularly and over time increases your odds of being noticed by a journalist on the site itself or from a competing news source. Guest posts, videos and other content serve double duty as your "clips file" -- social proof you can offer to boost your credibility as you seek press for your company. Blogs in countless niches provide numerous entry points.
Related: How to Start Your Own Video Blog
Target new journalists. New startup founders often make the major mistake of targeting big-shot journalists and well-established influencers. These folks get a lot of pitches -- way more than they can handle. By contrast, new journalists keep looking for stories and exciting startups they can feature, and they'll often go out of their way to dig up the story waiting to be told.
Write or curate your own blog. Research reveals that businesses with blogs get more links, leads and traffic. If you can't get press from external sources, be your own press. Blog. Many of today's top startups have built their followings this way and now get millions of blog views every year. That makes it easy to amplify their messaging. Coverage from any other group is just icing on the cake.
3. Scale slowly.
Of all the factors that contribute to startup failure, research shows premature scaling is the most likely culprit. When you’re running your startup on a budget, you're under pressure and conditioned to make things happen very fast. That stress increases if you’re seeking funding, as you rush to be seen as more impressive and thus more worthy of interest from larger investors.
Don’t make this mistake.
Slow and steady wins the raise, as they say. Carefully analyze every decision you make when it comes to growing your startup. Yes, it will take longer -- but you’ll still have your startup.
4. Bring on a a co-founder.
Two heads (and two bank accounts) are better than one. Bringing on a co-founder is one of the most effective yet still-underestimated ways to bootstrap your startup.
New companies with two co-founders are more likely to succeed. They raise 30 percent more money than startups with a single founder, and they experience three times the user growth.
A co-founder who shares your dream and is willing to put in the effort can be your company's greatest asset. During Buffer's early stages, Joel Gascoigne was the founder and idea man. He was mainly behind the scenes, excelling at execution. Then he brought aboard marketing genius Leo Widrich. The site reached its first 100,000 users a short time later. Today, Buffer counts millions of users and generates eight figures in annual revenue.