Bootstrapping Your Business – Starting From Nothing
Guy Kawasaki has written an excellent article entitled “The Art of Bootstrapping“, which gives tips for small businesses who are starting up without funding or venture capital. These aren’t just another set of ‘frugalifying’ tips, there are various methods of cost saving and doing business which are beneficial to low-cash businesses.
Some key points from the article include focussing on cash flow not profitability, being conservative (or realistic!) in your sales forecast expectations, and not wasting or employing resources which your business doesn’t really need. One of my favourite tips from the article is to forecast from the bottom-up and not top-down. What this basically means is that you shouldn’t base your sales forecasts on figures such as ‘percent of market’, but from your actual capacity. For example if you have production facilities for say 20 units per week, then calculate how many per year you can create based on this, rather than by estimating that you will secure 1% of a 10 million total market demand.
Written by Chris Pangburn.
