I chatted with Erin Halper, Founder & CEO of The Upside, about how to successfully bootstrap your business.The Upside launches and grows independent consultancies for ambitious professionals redefining success beyond the 9–5. The Upside is a source for community and support as a contractor in a rapidly increasing remote world.
When I started Squared Away, I was completely clueless in a lot of ways.
I knew what I wanted it to become but the road to do so was uncertain at best.
Truth be told, a lot of it was flying by the seat of my pants. MRR, ARR, and every other acronym you can imagine was like a foreign language to me — and I’m a military spouse!
Erin breaks it down so that you’re less likely to come away with a crazed case of anxiety.
What are your top 5 tips?
Keep your blinders on and your eye on the prize. It’s easy to get sidetracked or even envious of other companies and leaders in your space who may have better funding, better publicity, or a slicker Instagram feed. But remember: there’s room for everyone. Heck, Burger King did just fine! Stay focused on your end-goal and why you launched the business in the first place. Don’t get sidetracked by shiny opportunities or what your competitors are doing, especially if those opportunities are not 100% aligned with your business mission.
Outsource efficiently. When I was first launching The Upside, I received so much advice about outsourcing. Eventually when I had enough revenue, I outsourced two functions: one that was always a headache for me (tech) and one that was a cost-effective no-brainer (a virtual executive assistant) who gave me back 25 hours of time per month that I could then use to grow my business. When weighing what an hour of my time was worth vs. what it cost to outsource tasks that were cannibalizing my bandwidth, the decision was easy. Sometimes, even when bootstrapping, you have to spend money to make money.
Keep your focus on quality above all else. Since you’re probably not scaling big and fast as a bootstrapped company, focus on what you do have control over: quality. Stay focused on making your business the best it can be with the funds you have. Remember that when you decide to get outside funding, you enter into a completely different type of business dynamic. Investors want scale and they want returns. As a bootstrapped entrepreneur, you have the advantage of being able to focus on quality above all else.
Diversify your revenue streams. As a bootstrapped business, you don’t have the resources or steam to keep pivoting your business. Set yourself up with more than one revenue stream to offset lanes of your business model that may not be working out as well as you had hoped.
Design a budget and timeline for your first 2 years. The last thing you want to do as a bootstrapped business owner is pay-as-you-go-and-as-you-need. You’re going to need services. You’re going to want to attend conferences. You’re going to want to be in networking groups. Have a financial plan in place and know exactly how much you’re willing to invest in your business upfront, so that you can budget accordingly without stressing out over the constant need to spend. And there will be constant need to spend!
Setting up a business for success is extremely tedious. What do you recommend doing first? What is the most important?
More important than anything is understanding the mission of your business, and falling in love with that mission.
When something doesn’t work out as planned, or you’re having an awful day, reminding yourself of why you started this business in the first place will often get you back on the horse. Persistence and perseverance are what set apart the winners from the quitters.
Which brings me to the second most important recommendation: giving yourself a reasonable timeline to build your business before you’ll even entertain the idea of quitting.
Typically 2–3 years is best, so make sure you have the mental and financial runway to achieve that 2–3 year goal.
Success does not happen overnight, no matter what the glorified business stories like to make us think! There will be moments when you’ll be glad you gave yourself a long timeline to keep pushing and not give up.
Best advice you ever received?
“What’s the worst thing that will happen?” Not quite advice per se, but I ask myself this question constantly, and it helps keep everything in perspective and pushes me to take risks that may be out of my comfort zone, but great for business.
What do you think the biggest challenges are for new entrepreneurs?
I think that a huge challenge for new entrepreneurs is understanding the problem that they are solving. I see so many startups come on the scene, but they aren’t really tackling a big need. This makes achieving success a thousand times harder. I mean, do we really need another baby clothing line? All businesses should solve a problem. The bigger the problem, the more likely you are to succeed.
Read the full article on Medium.