This economy is a gift. It's perhaps the best thing that could happen to small businesses in a long time. Now, before you spit at the screen, read on for just another sentence or two.
Having too much easy money makes for rash and stupid decisions.
You know what I'm talking about. Admit it. You've probably done something similar to this: When I started my business I blew all my hard earned and saved money on designs, logos, business cards, phone systems and a few other things I can't really remember. NONE of these expenditures moved me closer to the primary goal of any business: making money. If you're going to spend money, it needs to be invested in anything that's going to get and keep customers and/or get you chosen over any other alternative. That's it.
Less money = More focus.
Having less access to streams of cash gets you very focused on what really matters (see above paragraph: getting and keeping customers = making money).
Less money means that your Unique Selling Proposition has to be clear and emotionally compelling because you can't hide behind pretty designs and nice paper or a flashy web site. The value you bring to your target customer has to be so strong that the experience is memorable, sticky and generates word of mouth. And in all honesty low-budget marketing campaigns based on solid positioning that have great value are fun, authentic and generate viral interest.
Bootstrapping builds character, culture, market share and profitability.
Remember the Wax on-Wax Off scene in Karate Kid where Mr. Miyagi had Danny paint the fence and wax the car so that he could do the Karate moves naturally? Bootstrapping is your Wax on-Wax off exercise. Getting into the nitty-gritty of your business will uncover customer needs you may not have noticed before. Another bootstrapping movie reference is the scene from Gone With the Wind where Scarlet O'Hara uses her curtains to make a dress so that she can get $300. The lesson? Desperate times lead to desperate measures but a good bootstrapping measure can lead to cash.
How to Bootstrap Your Way Through Bad Times
Since we've been living high for a while, the whole bootstrapping thing is a little foreign to many of us. If your idea of roughing it is reducing the minutes on your cell phone then this little bootstrapping primer should get your creative juices flowing.
1. Get clear on who your customer is, what's important to them and why they should choose you. Answer these three questions clearly and your marketing decisions will be easier and cost less money. If you're struggling with this, do this exercise with one of your favorite stores, companies or services. YOU be the customer and pretend that they are asking you. If you're a Starbuck's fan, describe yourself, write down what's important to you when you're buying coffee and write down why you choose Starbuck's over any other shop. After you've done a couple, do one for your own company. If you're still stuck ask a couple customers.
2. How much money do you need each month? When you're bootstrapping, it really helps to know what you're aiming for. If you don't know, you won't get there. Simply sit down, and start listing your expenses until you've collected everything. Don't forget to pay yourself. If you don't write that down it won't happen.
3. Attach offerings to dollars and customers. Now that you know how much you want to make, start matching up customers with your offerings. It's always easier to sell something new to an existing customer, so make a list of customers and what they bought, then see if there are other offerings they might benefit from, that you may not have offered.
4. Start a referral System. Stop treating referrals as if they were some gift! People who refer you are FREE salespeople who are fans of what you offer. You wouldn't send sales people out there without a selling sheet â€“ so make up a sales sheet for your business. Include the following categories: What Sets (Your company) Apart, Our Ideal Customer, Referral Triggers (things prospects might say to make you think of me), How to Refer Me (tell your referrers what to say to potential clients).
5. Update your web presence and social media. Think of Social media tools like your blog, LinkedIn and Twitter as digital billboards. They are free ways for you to communicate with your ideal customer (that is if they are active on the web). Even customers who are not active web visitors will use the web for research. You don't want them to find a blank space when it comes to what you offer.
Companies who bootstrap their business are a lot like families who grew up without much money. They are closer to each other and their customers. They know what matters most, and they can survive the ups and downs of any economy.
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About the Author: Ivana Taylor has spent over 20 years helping industrial organizations and small business owners get and keep their ideal customers. Her company is Third Force and she writes a blog called Strategy Stew. She is co-author of the book "Excel for Marketing Managers."
Ivana is a member of the Small Business Trends Expert Network.