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Bootstrap Tactics for Entrepreneurs: Financing and Success Strategies

Learn about bootstrap financing sources, success keys, and essential measures for entrepreneurial growth. Explore unique strategies to achieve financial stability and flourish in your business endeavors.

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Bootstrap Tactics for Entrepreneurs: Financing and Success Strategies

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  1. WEEK 6 : FEB. 23 MBAX 6860 : Bootstrap Tactics for Entrepreneurs • BOOTSTRAP FINANCE BOOTSTRAP

  2. OVERVIEW • Sources of bootstrap financing • Keys to successful bootstrap finance • My take on it… • Comments from Tasks • Week 7 BOOTSTRAP

  3. SOURCES OF BOOTSTRAP FINANCING • Friends & family • Credit cards • Home equity loans, mortgage • SBA loans • Customers • Vendors • Angels • Strategic partner BOOTSTRAP

  4. KEYS TO SUCCESSFUL BOOTSTRAP FINANCING • “Cash is king!” • PROCESSES • Accounting (cash flow statement, balance sheet, income statement…do them!) • General infrastructure – merchant account, PO system, QuickBooks, etc. • Prepare contingency plans • Credit cards, factoring, 90 days with suppliers BOOTSTRAP

  5. KEYS TO SUCCESSFUL BOOTSTRAP FINANCING • Keep your eye on the ball • Sign all checks • Review A/R, cash flow, payroll and other reports WEEKLY • Take global view of financial position at least every quarter • Plan ahead – cultivate bank & angel relationships, set-up factoring if needed, etc BOOTSTRAP

  6. MY TAKE ON IT… • Have 2x burn rate in cash or equivalent liquid asset • Insurance!! Protect your hard-earned money • Grow organically unless you have injection of cash from Angel, VC, strategic partner, etc. • Grow too quickly, without planning = cash trouble! BOOTSTRAP

  7. MY TAKE ON IT… • Sources of funding • CUSTOMERS!! • Pre-sell, pay ½ up front • Vendors – ask for longer terms • Credit cards – as a safety net • Bank line of credit after established • Angels – ones passionate about your industry • Strategic partners BOOTSTRAP

  8. MY TAKE ON IT… • Sources of funding • GET CREATIVE! • Sell assets on ebay • Sell another product to self-fund • Factoring • Use equipment from “partner company” • Barter! BOOTSTRAP

  9. WORKING AGREEMENT TOPICS • Government resources • FEDERAL • SBIR grants • SBA guaranteed loans (LowDoc Loan Program) • SCORE – low-cost/free advice from “retired executives” • STATE • Colorado Enterprise Fund • CAPCO • CITY • Office of Economic Development • Enterprise Zones BOOTSTRAP

  10. TASKS COMMENTS • Surveys • Past behavior is a strong indicator of future behavior • “what do you like about your current solution ?” • “What don’t you like….” • Partnerships • Adds credibility • Ready access to resources • CUSTOMERS! • Information • Best practices BOOTSTRAP

  11. TASKS COMMENTS • Research/intelligence • Have a supportable story! • Sources! • If can’t get specific, 100% relevant data, ASK EXPERTS! Much better than “I dunno” • Shows and associations • NETWORKING! BOOTSTRAP

  12. TASKS COMMENTS • Segmentation • KNOW your customer…so you can market to them • Age, sex, income, where they hang out, what they like, what they read, etc • Competition • Don’t just ID them – analyze how you plan to compete against them – how are you DIFFERENT in your customer’s eyes BOOTSTRAP

  13. WEEK 7 • Next Week : Bootstrap HR • Speaker : Cinda Daggett • Readings • Midterm Study Guide Posted • Tasks • Financing sources • Term sheet BOOTSTRAP

  14. “We make a living by what we get, but we make a life by what we give” • --Norman MacEwan BOOTSTRAP

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