III. Bootstrapping Your Way to Success
Business Growth Strategy #1: Reinvest back into your business.
If you want your business to grow quickly, then you need to invest in. Not only does this include investing in advertising, but it also includes investing in outsourcing or even hiring employees.
Think about it . . .
For every task you do, it may take you days, weeks or months to complete. For example, how long would it take you to write a decent sales letter? If you already have some copywriting chops, it might take you about a week. If you don’t know good copy from a piece of garlic toast, then it could take a whole lot longer.
The solution? Hire a professional copywriter. Not only is this person likely to do a better job than you, but it frees up your time to focus on some other important aspect. And that means you can grow your business more quickly than ever if you outsource.
Or take the example of advertising . . .
Search engine optimization is one decent way to bring traffic to your site, especially if you can dominate your competitors with regards to the top search terms in your market. But the problem is, good search engine optimization takes time. You need to create good content and you need to gather good backlinks. And then you need to sit around and twiddle your thumbs while you wait for Google to recognize and rank your site.
See, search engine optimization may be part of your overall marketing strategy, but you’ll grow your business more quickly if you can plunge some money in the venture. For example, if you invest in a Google AdWords campaign, you can literally start pulling traffic into your site in a matter of hours.
Point is, no matter what aspect of your business that we’re talking about, your business will grow more quickly if you can funnel some dollars into the right places. And that’s why you should reinvest your profits back into the business, to help build and maintain your momentum.
Now, this doesn’t mean you need to reinvest every single dollar of profit. Take the example of Simon Hodgkinson and Jeremy Gislason, who started out by reinvesting 90% of their profits right back into their business. This allowed the business to grow quickly. And even today, Simon and Jeremy still reinvest 50% of their profits right back into the business, which keeps the business thriving while others around them stagnate.
You might recall in the first module how I talked about one of Simon’s personal strategies for bootstrapping his first business. That brings us to our next point…
Business Growth Strategy #2: Retain your day job.
I know . . .
One of the reasons you’re starting your own business is because you want to kiss that day job goodbye and start working for yourself. You dream about it. You fantasize about that moment when you turn in your resignation. You can just picture yourself set up in your home office… getting up when you want… going to bed when you want… taking a break when you want… and doing everything else in a truly free way.
But hold up. Hang on. I hate to rain on your lovely parade, but one of the best things you can do for yourself is to retain your day job if you have one.
You know why?
Because then your day job pays your bills. And if your bills are already taken care of, then you can use the aforementioned growth strategy, which is to reinvest your profits back into your business.
Plus, retaining your day job means that you also don’t have to worry about becoming the guy with the Cheeto-stained shirt who lives in his mother’s basement. You can kind of see where this would be a good thing, right?
So hang on to that job. It’s not forever. It’s just until your business really takes off, and you can support yourself with the profits and still reinvest a healthy chunk of the profits right back into the business.
And that brings us to our last point . . .
Business Growth Strategy #3: Create a business budget.
Once you get through this course and start applying the bootstrapping strategies, you’re going to find that you do indeed have money to invest into your business. But just tossing money into your business isn’t going to magically make your business grow. Instead, the key is to invest wisely.
Remember the analogy you learned about earlier in the course with regards to preparing to give a speech? The person in that analogy could spend all his or her money investing in a new suit of clothes, but that isn’t going to make his speech any better.
Think about it . . .
Does anyone can on and on about what Martin Luther King Jr. was wearing the day he gave his “I Have a Dream” speech? Nope. Everyone focused on the speech itself. King’s clothing just added to a great presentation, but his speech was great because of his words and his passion, not because of the clothes he wore.
So, someone who’s writing a speech might prioritize like this:
#1: Write and polish the speech. If this requires hiring a speechwriter, so be it – it’s the best investment someone can make in creating a memorable and inspiring speech.
#2: Invest in the window dressing. If the person has money left over after getting the speech written, then he can invest in the presentation by buying new clothes to make a great impression.
This is the same thing you have to do with your business startup . . .
1. First, prioritize your business tasks. We already talked about this step in the previous module, where you focus on those tasks that put you closer to getting your first customer.
2. Secondly, create a budget so that you can invest in these tasks according to priority. This means that high-priority tasks such as product creation or advertising get more resources than lower-priority tasks.
Check the manual that accompanies this course, as you’ll find some planning sheets that will walk you through the process of setting up your business budget and investing in your high-priority tasks.
However, you might want to take it a step further. That’s because now is a good time to think about your household budget as well. If you’re like most people (me included), you can probably find places to trim the fat.
Do you have the premium cable or satellite TV package with the scores of channels that you don’t even watch? You may consider scaling back to a smaller package.
Do you feel rich at the beginning of the month and poor at the end, with no real solid idea of where your cash is going? In that case, you might want to spend a week or two tracking every expense. You might be surprised out how relatively small things like a daily cup of coffee add up to a big monthly or yearly expense. And once you become aware of these little expenditures, it’s easier to get them under control.
Are you paying high interest rates on certain loans? You may want to talk to your banker about refinancing at a lower rate.
If you have others in your household, then obviously you’re going to have to bring them into this discussion and make some compromises. Just remind everyone that your proposals are only temporary measures while you work to get your business off the ground.
So, hanging onto your day job, reinvesting into your business, and creating a business budget are the first steps in bootstrapping your way to success. But these strategies are just the tip of the iceberg. Listen in on the next video in the course as you discover seven solid bootstrapping strategies. See you there in a few moments . . .