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Fremont: For entrepreneurs, getting funds for their venture is like striking gold, but not all would have enough money to pool into their dream project. They borrow money from their family or friends, take loans, raise money from Venture capitalists, to give shape to their desired ventures, but this might be an expensive affair as the money as to be returned soon. Few entrepreneurs who are able to empty out their piggy banks and pockets to bootstrap their venture find themselves in a better position, as whatever they earn from day one goes to their pocket. So in such a situation, how can entrepreneurs gain more?
Though cutting down on costs sounds like a middle class family under crisis, but the reality is that the unnecessary expenses actually weigh down the possibility of profits for a startup. These expenses may include fancy office setups, huge rents, expensive outings for clients, which may be cut down. Companies are seeing the benefits of cloud, not just because they cut down on the hardware costs, but also allow in working flexibly. These companies are not just cost effective in terms of managing their IT, but also allow freedom to the employees to work from remote destinations. Having a paperless office, allowing employees to telecommute, would not only keep the employees happy, as they get to work from their homes, but also helps to reduce the costs incurred while setting up a full-fledged office. Also, in case of client meets, companies can do a plug and play at a prime location, which would be easily accessible by all.
When bootstrapping, the entrepreneur should make sure that the operating costs are kept to the minimum, so the number of employees should be the barest. A receptionist, a doorman, a gardener, these people would be of use in a bigger office, not when your business is running n a shoestring budget. There have even been cases of people operating from their garages, and moving to prime locations after they start minting profits.
Entrepreneurs should ensure that their products sell like hot cakes, as a slow moving product would just mean blocking the money. Many a successful entrepreneurs started off with small businesses, with products which sold instantly. Also, the product must be offering high value to the customer; else they would not come to you.
Right now, your priority is to break even, to earn so as to cover your costs--profits will surely follow, but only after your costs are covered. You should not worry about why you are not able to generate money, just try to remain afloat, and only then will you be able to survive. Since you know the worth of each and every of your hard earned penny that has gone into your dream project, make sure that you put every dime to good use. Bargain if you should to get a better deal for the raw materials; ask for discounts from dealers; look for a cheaper location; do whatever you can to make sure that you are not just spending the money on just something, but on something, which will pay you back.
Since, you are on a major cost cutting spree, you will not be able to invest in a major marketing campaign, thus focus more on word-of-mouth promotions, use the social media to its best, try guerilla marketing, or any technique, which pays you back without much of investment.
Whatever the situation right now, don't worry, your profits won't stay away from you for long. They will come following you soon. This is just a passing phase, and you will soon be able to surge whatever expenses you want and make your dream venture a fleeting success.
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