In an entrepreneur's perfect world, money would be every bit as plentiful as great ideas; then no one would need bankers, venture capitalists, or rich uncles. Alas, the money tree has yet to be invented, leaving most entrepreneurs to bootstrap their way to success. No one likes being short of cash, but it certainly compels you to be disciplined and creative. Last week, at New York Entrepreneur Week, I heard several young entrepreneurs talk to panel moderator Scott Shuster about how they managed to grow successful ventures without boatloads of cash. Here are some tips from the panel:
Use Barter. Abhishek Sharma, president of Bergen Newspaper Group, recalled that before he purchased his company with his partners, he went to The Bergen News to buy a print ad. Noticing that the ad salesperson was somewhat frazzled with various marketing projects, he offered to help out in exchange for a free ad. Now that he owns the newspaper, he frequently barters ad space for a variety of goods and services. "I barter with everyone, from the water cooler guy to legal counsel," he says. "I leverage my platform. Everyone has money problems, so you have to get creative." Be careful, though. Barter transactions are taxable, so familiarize yourself with the rules that govern bartering.
Work Virtually. "You don't always need office space, says Amanda Freeman, co-founder of Vital Juice. "Prolong that as much as possible." Vital Juice is a daily free subscription email that delivers information on fitness, nutrition, beauty, and wellness. "All our editors work from home and it saves us a ton of money," says Freeman. Also consider that many of your younger employees, who tend to crave flexibility, may be thrilled to work outside a traditional office environment. Just make sure that you're clear about your expectations for productivity.
Consider Non-Monetary Incentives. Chris McMann co-founded Startup Digest to provide fellow entrepreneurs with an email digest of startup events worldwide. That's a big goal, and one that would be impossible without his trusty stable of "curators" who hunt down events in their home cities. "We have 32 of them, and we couldn't possibly pay them salaries," says McMann. But the curators, who span the globe, get their names and contact information on all local emails that are sent to Startup Digest subscribers. "They're all business people, so it helps them build out their networks," says McCann. Remember, though, that it's awfully tough to hold people accountable when you're not paying them, so make sure that whatever non-monetary incentive you're offering is attractive enough to keep folks on task.
Do you have some good bootstrapping tips for your fellow business owners? Bring 'em on!
Money tree image by Flickr User Pfala, CC 2.0