As a saavy bootstrapper your goal is to minimize costs while maximizing opportunities. This extends into each of the areas of your business including bookkeeping and accounting services. In fact, by outsourcing your accounting needs you can help your business grow organically. Here are some concrete tips to help you hammer out financial situations with the help of an outsourced accounting professional.
Understand the Market
Before you make your first buck in business you need to understand your overall market. This market includes the industry or niche that you are involved in, such as trucking, magazine publication, or floral design. Conduct your own market analysis using data pulled from the US Census and state commerce websites.
You should also know your competitors’ history inside and out. Look at how well other businesses in this market managed financially and in terms of growth over the course of the past 10 years at a minimum. Determine what kind of financial growth you can expect to see, and identify attributes of failing and successful competitors to see what you should, and should not, do with your own products or services and marketing.
Hire a Money Expert
Now that you have an idea of a projected financial goal, it is time to bring in the experts. Outsource your bookkeeping and accounting tasks to industry professionals. Yes, this is an expense, but it is also an investment that you cannot overlook. Unless you have a background in economics and finance, you simply do not have the tools to properly and responsibly manage your finances.
Instead of spending time studying how to be an accountant or a bootstrap controller, invest that time elsewhere. As the owner of your business, use that time more efficiently by sourcing new contracts, brainstorming the next product or service, or providing excellent customer service. Don’t get bogged down in the dollar count. More importantly, by outsourcing your financial needs to a certified accountant, you minimize any risk involving regulatory practices and taxes that you could incur by trying to handle all of this yourself.
Save First, Borrow Never
Once you have someone ready to manage your finances, your next goal is to create some money for them to manage. As a bootstrap business owner your goal is to avoid owing others at the earliest stages in the game. Yet sometimes you need a bit of capital to help pay for big ticket items and get your business growing. Ideally, you will have saved money before starting this venture. That money saved can serve as your nest egg to support you from the onset.
For those business owners unable to save prior to starting up, there is another way. Evaluate your personal savings and revenue sources. This might mean maxing out your credit cards or cashing in your retirement account. Here is the deal. You want to do whatever you can to get your business started so you have more money in the future, right? That means sacrificing whatever it takes now to make that happen. Just avoid borrowing, at any cost, and this includes taking personal loans from friends and family.
Reinvest in Business
After you have spent your life savings and kick started your company, it is time to start seeing some financial results. This is where investing in an outsource accounting service will be of the most benefit. A smart and savvy accountant will know where and how to make your dividends multiply. They will assist you in creating and maintaining a solid financial base so you can pay off your credit card debt and restart your retirement savings.
At the same time, as a bootstrapping business owner, you want to remain frugal with your finances. Stay away from volatile investments or those that tie your money up for the long term. Remain conservative so your cash can continue to finance your business through the ups and downs. That brings up the final tip.
There will never be a time when you can just kick your feet up and throw your hands in the air and let others do all of the work. For starters, that simply does not correspond with the mindset of a true bootstrapper. Your goal should be to get your business up and running, after which you will remain the driving force behind every business deal you complete.
Along the way, you will want to acquire other outsourced professionals in addition to your accountant. These experts will form your brain trust that will back you up and support your ventures with industry research and market data analysis. But ultimately you will always remain at the helm because this is your life’s work, your bootstrapped business.