What I Wish I Knew Before Bootstrapping My Startup Here are some key strategies to focus on when bootstrapping a firm.

By Varun Sharma

Opinions expressed by Entrepreneur contributors are their own.

Bootstrapping your startup means growing your business with little or no venture capital or outside investment. It means relying on your own savings and business revenue to operate and grow. We started off Laumière Gourmet Fruits as a bootstrapped firm and it has been definitely difficult, but it's been worth it. Creating a bootstrapped business challenges you to focus extensively on business plans and get you to generate revenue as soon as possible. One common factor you will see is that successful bootstrapped companies have a business plan that generates cash as quickly as possible. With no cash inflow, a bootstrapped firm will burn the reserves before gaining any real traction. That's really important to focus on early on.

Here are some of the things I with I learned before bootstrapping my business:

Maintain a negative cash conversion cycle

I did not know this before I started, but as soon as I learned, we focused on it to avoid cash flow problems. To elaborate, a negative cash conversion cycle means it will take you longer to pay your suppliers than you take to sell your inventory and collect money from your sales. This means that your suppliers and sales finance your daily operations. As a result, you do not need external cash to grow. If you can collect the money from customers, maintain optimized inventory and vertically integrate to sell directly, your products you will end up sustaining as a bootstrapped company.

Related: 8 Bulletproof Ways to Bootstrap Your Business

Never spend beyond your means

When spending on anything, you should ask, "Do you really need to spend on this now? Does this positively affect your business?" Spend your money where it makes a big difference — on the customers and on the essentials. A startup grows by acquiring and retaining customers. Always spend on the aspect of the business where you know you have a return coming in due time and that translates directly to happy customers in the long term.

Watch with detail

With a bootstrapped business, you need to keep a close eye on the payments going out. There are a lot of tools and software that help track spending and calculate burn rate. Any specific area you can save on, do so at the earliest. This is really important because if not done, you will end up losing more than you make. And as a bootstrapped firm, it will get difficult.

Related: 3 Big Reasons to Bootstrap Your Business

Running a small business is a blessing in disguise

It's easy to give up and be disheartened by poor results, but there are several benefits that apply to a small business compared to large firms. Some of the key ones are that it's easier to build a relationship with customers because you can have an authentic conversion that is not based on transactions and documentations. Feedback can be heard early on and acted up even earlier. internal communication on the team is quicker too, with decisions being taken early on. Take advantage of the small size and grow at a reasonable and controlled pace.

Be relentless

Just because you're working on a bootstrapped startup, it does not mean it's going to be easy. Go out there and find the customers you've been aiming for. If your goal is to reach out to ten thousand customers, focus on a hundred, then a thousand, then five thousand and then ten thousand. Do what you can to get those customers in the most authentic manner. Build a relationship with any potential customer. Maybe in the future, you can land the potentials. Set goals. Work on them. Be relentless.

Related: 4 Compelling Reasons to Bootstrap Your Company Instead of Raising Venture Capital

Wavy Line
Varun Sharma

Co-Founder | Laumière Gourmet Fruits

Varun Sharma is the co-founder of Laumière Gourmet Fruits. He focuses on expanding Laumière through advancing its digital platform and growing its ecommerce presence. He has also been a TEDx speaker, a former co-founder of Inara, a youth-based non-profit organization and a home-grown DJ.

Editor's Pick

A Leader's Most Powerful Tool Is Executive Capital. Here's What It Is — and How to Earn It.
Lock
One Man's Casual Side Hustle Became an International Phenomenon — And It's on Track to See $15 Million in Revenue This Year
Lock
3 Reasons to Keep Posting on LinkedIn, Even If Nobody Is Engaging With You
Why a Strong Chief Financial Officer Is Crucial for Your Franchise — and What to Look for When Hiring One

Related Topics

Business Solutions

Use AI to Control Your Appearance in Virtual Meetings with This $50 App

You can easily customize your image to look how you want.

Business News

The Virgin Islands Want to Serve Elon Musk a Subpoena, But They Can't Find Him

Government officials would like to talk to Tesla's owner as part of an investigation into the Jeffrey Epstein case.

Growing a Business

Want to Break Bad Habits and Supercharge Your Business? Use This Technique.

Forget about breaking your bad habits. Automate your busy work and focus on growing your business instead.

Starting a Business

5 Tips For Launching a Business While Keeping Your Day Job

Launching a business while holding down a 9-to-5 is no small feat. It's a common path for aspiring entrepreneurs, but it's not without its challenges.

Diversity

A Woman Co-founder's Guide to Empowering Women in the Workplace and Advocating for Gender Equality

If you want to see more innovation and creativity from your employees, you need to make sure you've cultivated an inclusive and diverse workforce. Try these four strategies to support the women on your team and achieve your goals.

Growing a Business

This Stock Screener is on Sale for Memorial Day

invest while mitigating risk with this top-rated stock screening app.