Bootstrapping Is a Business (and Not Just a Startup) Strategy
In the start-up stage, almost all entrepreneurs are in "bootstrapping" mode--trying to make every dollar go further and attempting to squeeze a financial return out of absolutely everything--from staffing needs, to office supplies, and more.
At my company Metal Mafia, however, bootstrapping is not just a budgeting tool, it's a business strategy I continue to employ nine years in. Bootstrapping is about both dollars as well as general approach, and being concerned with both doesn't stop as a business gets bigger.
Here are a few ways bootstrapping can continue to benefit your company, too:
Handle expensive tasks in-house, and with more creative control.
For instance, creating a product catalogue is costly--especially when you have a lot of products. Paying a photographer to shoot the product photos requires a big budget every time you do a new catalogue. A catalogue photo shoot usually ranges from $3,000 to $10,000, depending on the number of products. By doing the photography ourselves with a one-time $,1500 investment in a great camera, and a $600 lightbox, I not only saved a lot of money, but was able to retain absolute creative control, and reduce the time it took to make catalogues. Today, we still shoot every product ourselves, with the original equipment we purchased when we first got started.
Use accounting software for payroll, rather than outsource it.
An outside payroll company will cut your checks for you, but the reality is, you continue to do all the work, because you have to provide them with all the data to plug into the system--hours, vacation days, wages, among other things. With my accounting software, which (like most that are available) comes with a payroll module, I cut payroll myself and save the expense and the time of using a service. The software updates automatically with new tax rates and other important considerations for cutting the payroll accurately. It takes me about an hour to run payroll, which I do twice a month. My employees get paid the same day, and I get a quick financial snapshot of our labor productivity on a regular basis, which is invaluable.
Only take a small booth at trade shows.
Trade shows cost a lot of money--especially if you don't plan your booth right. I have always chosen to take only a small space at shows, even though competitors take much larger booths. By doing so, I reduce overhead and focus instead on the customer experience, making sure that the booth is laid out in the most efficient way for customers to be able to shop it easily. In addition, I purchased a very lightweight booth set-up so shipping expenses always stay low. I can set up with only show staff, and do so in half the time it takes competitors--giving us all time to visit local shops to get face-time with customers, and do market research without having to extend our travel budget.
Choose your office space wisely, and not just the location.
A lot of owners choose to grow their work spaces as they grow their product lines. But I have done the opposite with Metal Mafia, and instead always make products conform to the space. By doing this, my real-estate overhead stays under control--and I am also able to keep a tight watch on products and how well they are selling. Limited space means the team and I do not have the luxury of letting inventory languish if it is not selling, so I can carefully watch products and quickly cut off slow sellers. By the same token, anything new I want to bring in requires finding a home for it before it ever goes on order--meaning any new product or line has to be weighed carefully and welll-justified. This system of checks and balances makes sure I spend smart, and never get pulled down by out-of-date styles.
Bootstrapping has not only gotten my company further when times are tight, but it has made me and my employees focus on what really matters for the long haul.