How to grow your start-up without investors
If securing funds for your start-up is not your priority, then you are preparing yourself for vulnerable situations in the short-term. We understand the excitementthat new business owners have in controlling their business destiny.
Unlike big enterprises that are supported by outside capital, your start up may not have that much cash flow initially. However, you do have the freedom to determine each step in your entrepreneurship journey.
Bootstrapping a Start Up
There are usually two major reasons why businesses decide to fund themselves and not raise a capital.
The first major and most obvious reason is ownership. Every business founder starts their journey with a 100 per cent undiluted ownership. With outside funding, the possibility of chipping away both the ownership and emotional investment as you trade equity for investment is more. Most times, young entrepreneurs give up on their dream of running a business too fast. We have come across several young entrepreneurs who sold away their dreams too early.
The second reason most business owners decide to fund themselves is the freedom it allows (with all risks involved). As a business owner, when you have the freedom to determine your direction will allow your stand to your grounds and exit certain profitable industries. In most situations, closing one door will open new ones that would have otherwise remained closed if your business had been restricted by outside agreement and opinions.
Although, when you are responsible to solely manage your entire business (financially), the pressure is huge. Therefore, to succeed this pressure, you need to get creative about your cash flow.
Here are some ways you can self-fund your entire business:
Self-funding your business
Business owners should possess creativity while navigating through the tight budget of self funding. For this purpose, every minute company expenses are needed to be taken into consideration (from office space to the coffee).
Here are three ways to creatively and effectively grow your start up without having to rely on money from outside investors.
1: Do not ask friends and family
It is a lot of pressure to bet your own money and having it lose to strangers, but losing your friends’ and family’s money is the kind of pressure you don’t need. So instead of borrowing money from your close friends and family members, you can focus more making deals that make economic sense.
Given that you will be investing your own money in your business, it is obvious that you do not have the liberty to make deals that simply are not profitable at some level.
For example, if your business owner needs a percentage each moth which you cannot afford, you can simply negotiate with them. This way, you can settle for a lease that allows you to pay less in the early years and make increased payments towards the end. It frees up money today based on the predictions that your company will be making more money in the next five years.
2: Get creative to get what you need
One important principle to live by is: “It never hurts to ask.”
When you are self funding your business, the need for habitual frugality will boost you to ask creative questions that will help your business get what it needs.
There are several ways one can free up money. One way according to us that will work is, claiming for a mis-sold PPI policy. Since, millions of people across the UK were mis-sold a PPI policy by their trusted banks; we believe that if you search through your insurance, loan, mortgage or credit card application, you are bound to find one.
If at all you discover that you were mis-sold the PPI policy, you can move on and make a claim. The compensation amount thus received could be used as an investment for your business.
3: Be a good neighbour
Business owners should have the ability to think beyond the daily business tasks. We understand that it is not easy to find time, but community engagements not only help you build your network, but it also pays dividends.
In fact, self-funding a start-up business is not always the recommended option for all business owners, but it’s certainly worth giving it a thought.