I came across this article in one of the local business papers and wanted to share the tips.

If you are starting a business or have a great idea you want to bring to the market you can use a strategy called bootstrapping – a strategy that focuses on cutting costs to free up operating cash.

The term bootstrapping comes from the concept of “pulling yourself up by the bootstraps” – getting things done without outside help. From a business perspective it means getting things up and running with the help of personal savings, cash flow management, and penny pinching.

During start-up your focus needs to be on generating cash flow. This means sales however it also includes keeping your expenses down. Do you need a beautiful desk right now or can that purchase wait? It can be tempting to go on a spending spree when the money starts rolling in, but reinvesting profits will set the stage for long-term success.

5 tips to help you succeed on a shoestring budget:

1. Look for free publicity – Approach local media with your story and look into the benefits of social media marketing.

2. Barter with other businesses – offer your products or services in exchange for something you need. For example, you can cater an event in exchange for bookkeeping services.

3. Pay your suppliers on time – Develop a good relationship with suppliers can help you extend payment terms, free up cash, and build good credit rating.

4. Work from home or share an office – Can’t afford high rent? Reduce your overhead until you can afford to expand and even then evaluate the benefit of doing so.

5. Weigh the pros and cons of leasing instead of buying – It may cost more in the long run, but leasing can free up cash during start-up.

Growing a business takes time. First build a solid customer base and create a positive cash flow as this will set the stage for future success!

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