No matter what, it's difficult to quickly grow a company. But it's even more difficult to grow a company without investment dollars.
I've been fortunate enough to have investors for my latest company, Likeable Local. But as the Series A crunch continues, and it becomes more difficult for entrepreneurs to raise capital, I wanted to reflect on my first company, Likeable Media, which has grown by over 6,000% in the last six years, and which has made the Inc. 500 for the past two years, without any capital from outside investors.
Here are the three most important lessons my co-founder wife and I learned about how to grow fast while bootstapping:
1. Sell your way to success.
In the early days of Likeable Media, my wife and I competed on the phones for leads and sales, just as we'd done years earlier when we both worked in sales at Disney. We called up contacts, and pitched them ideas. We asked people who trusted us already to take a chance on us. We sold services that didn't even exist yet.
When there's no cash in the bank to start, your only option is to sell. Work your network, hit the phones, set up lunch meetings. Do whatever it takes to get revenue in the door so you can hire people and begin to grow. Then hire salespeople to do the same thing.
In 2007, when we first started working with 1-800-Flowers.com, the company wanted to do a barter deal instead of paying us cash because our offering--social media--was still untested. Many advisors told us not to do a barter deal. With no investor money, we needed cash. But we decided to do our first deal with 1-800-Flowers.com--for flowers--anyway. So we got $48,000 in flowers and gifts that year, and we "bought" flowers for prospects, clients, staff, anyone who uttered our name on Twitter that year. And while we didn't get any cash from 1-800-Flowers.com, the return on investment was tremendous.
When there's no cash in the bank, consider providing your products or services in return for whatever else you need. You'll create a win-win situation, and build value for others until you can afford to pay for those things yourself--or are tested enough to demand cash.
3. Finance your cash flow.
When we first started Likeable Media, we didn't know a thing about commercial banking or financing. It turns out, it's a pretty important part of leading a new company. You can't grow without cash and yet, in the beginning, a bootstrapped company doesn't have any. That's where banks come in. Get a loan, get a credit line, get access to capital, one way or another. If you can't, explore options such as factoring, in which you finance your accounts receivable. We ended up getting a credit line and later, a loan, which really helped us hire faster and, therefore, grow faster--all without ever giving up any equity.
How have you grown without investment money? Tell us in the comments below.