Show Me The Money Part II
Below is a MRR and PLR article in category Internet Business -> subcategory Web Hosting.
Show Me the Money: Part II
Title:
Show Me the Money: Part II
Summary:
This article explores how to economically fund your business through customers, consulting, and cost control, before turning to external financing.
---
Introduction
Before seeking external financing, consider bootstrapping your business. This means growing your company by leveraging customer funds, offering consulting services, and controlling costs. These strategies empower you to retain control and create a financially sound foundation.
Funding Through Customers
One effective traditional method of funding is using customer revenue. During the high-tech boom, this approach was often overlooked, but it remains powerful. By selling products and reinvesting the earnings, you can maintain control and promote cash flow.
For example, a startup I worked with developed a sales-force compensation product. A client needed enhancements that we weren't funded to deliver. We negotiated with the client to finance the development, allowing us to eventually offer the improved product to more companies. The client agreed to a $200,000 investment and a short exclusivity period before we could sell to their competitors.
It's crucial to have a few initial customers to build credibility, and experienced advisors to help negotiate terms. Start with brief exclusivity periods and ensure a substantial guaranteed order. Consulting legal experts can safeguard product ownership and patent rights.
Leveraging Consulting
If you possess valuable expertise, consider offering consulting services to cover operational costs and product development. The previously mentioned startup provided advice on sales force management, resulting in satisfied clients and robust finances. This strategy helps you maintain control over your company and increases its value if you later seek external investment.
Effective Cost Control
Reducing costs without compromising your company’s products or services is vital. Understand your "burn rate"?"the rate at which you spend money monthly. This helps assess your financial needs.
High infrastructure or manufacturing expenses need justification. Every spending decision should be scrutinized. Consider employing part-timers or contractors over full-time staff. Many companies successfully use actors as contract salespeople to generate leads.
Utilizing commission-based contractors can offer flexibility. You may find talented individuals on platforms like Elance, Craigslist, or Team Double Click. Networking can also lead you to cost-effective outsourcing solutions.
Conclusion
Relying on customer funding, consulting, and cost control empowers you to bootstrap effectively and retain control. Should you later seek external financing, you'll be in a stronger negotiating position, knowing you can self-fund under your own terms.
You can find the original non-AI version of this article here: Show Me The Money Part II.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.