Home Entrepreneurs 5 sustainable best practices for bootstrapped startups • TechCrunch

5 sustainable best practices for bootstrapped startups • TechCrunch

by Ozva Admin

Does not matter how If your startup is successful, you will always have bills to pay and ensure healthy cash flows going forward. Times of abundance may make you think that funds will always flow into your bank account, because that has been your reality until now, but the cruel reality is that sources of capital can dry up overnight without warning.

To weather uncertainty and maintain emotional balance, it’s good to temper your exuberance and confidence with a dose of realism. One way to do this is through bootstrapping.

Bootstrapping is a double-edged sword: because you have little or no reliance on investors or stakeholders, you won’t be giving up much of your company for money, but the downside is that you have less money to invest in growth .

There is also a hybrid model that gets less attention and is worth mentioning.

A colleague of mine investing in the life sciences genomics space received $150,000 in angel funding. He later sold his business for hundreds of millions of dollars. She was able to pull off this extraordinarily successful exit because after the initial angel round, sales of her unique DNA sequencing and genomics services funded the business. With the success of her technology, she was able to rapidly scale the business within the US.

If you decide that startup is the best option for your situation, you first need to figure out if you will be self-funding or looking for small amounts of angels.

Don’t be tempted to jump on a plane at any moment to meet potential clients in glamorous locations or for meetings in remote locations.

These five key business strategies and principles will set you up for success:

  • Choose your team members wisely
  • Establish your business model and go-to-market strategy to generate cash fast
  • Adopt a frugal mindset: always keep an eye on expenses and negotiate costs
  • Be prepared to take on many roles, including those you consider menial.
  • Outsource only what is absolutely essential, such as legal and accounting.

Choose your team wisely

Your early employees are among the most important stakeholders in your business. It is essential to select people who are committed to the mission and success of your business. They should want to work for a self-employed business, as not everyone will. Look for people who want to be a part of the business rather than someone for whom it’s just another job. The right hires will indicate that they want to be part of a sustainable business model.

You should offer the acquisition of shares over time as a key financial incentive. Because your team will earn this incentive during their tenure with the company, each individual is likely to invest even more in the success of your business.

Select employees who can wear many hats and seek out talent from diverse backgrounds to bring varied perspectives. Created and ran a startup in food safety diagnostics that I sold to a multi-billion dollar S&P 500 company. We had people of all ages, genders, ethnicities, educations, and geographies. This diversity was fundamental to our success, because we did business in 100 countries. It required us to have a deep understanding of the market and the cultural dynamics of each country.

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