this is the second part to Bootstrapping – Part 1
Time to Cash – When do I get my money?
More important than “time to market” (when can I offer my product on the market) is “time to cash”: when do I get the money for my service?
For a successful bootstrapping, it makes no sense to sell and sell and to only bill once a year.
This inevitably leads to liquidity bottlenecks, because your suppliers / landlords / insurance companies want their money on time.
At the beginning, ask for cash payment; only then you are able to re-invest your income directly, without straining your credit score.
If you have to write bills, your administrative burden increases significantly. Paper is known to be patient.
Form strategic alliances – partners for the start
Of course, right at the beginning, customers do not run the door for you. It takes weeks or months to get to new customers through advertising and recommendations. What you need from the first minute are partners who help you:
Can you work freelance for someone who is already active in the industry?
Our wedding photographer came with a colleague in tow, who is only on board with larger stories, but otherwise works independently.
A make-up artist can ask the hairdresser around the corner if she can rent a chair for a day of the week. A modeler can use the workshop of a carpentry nearby for a small Euro at the weekend.
Strategic alliances save costs, time and nerves.
Enforce upselling – sell more to loyal customers
It is easier to sell more to existing customers than to acquire new customers. You have to think outside the box, so to speak, to be one step ahead of the customer’s need. Veterinarians sell special pet food, hairdressers have shampoo on offer and you?
Better than “more to sell”, of course, there is something better to sell: higher quality products and services that are even better tailored to customer needs.
If you give tutoring and your student will finish school soon, you can offer help with finding a job / application. So a customer will remain your customer later.
It is also important to ask the customer directly how you can improve your service.