The Do’s and Don’ts of Bootstrapping a startup

The Do’s and Don’ts of Bootstrapping a startup

Akinpelu Babatola
Guest Writer

Bootstrapping a startup means launching the startup yourself without any sort of external funding. Usually, you would have to dip your hands into your savings and personal income to do this. This is a challenging thing to do, but an entrepreneur who succeeds at bootstrapping can expect to reap incredible benefits from it.

So how do you ensure you and your startup succeed at bootstrapping? Well, there is no way ensuring 100% success, but here are the Xpress Train’s dos and don’ts of bootstrapping to raise your chances.

DOs

  1. Do choose a worthy cofounder: Pick a cofounder that complements you. While they don’t need to have skills similar to yours, they should have something they can add to your startup. This will allow the easy assignment of tasks and responsibilities.
  2. Do cut your overhead expenses: Overhead expenses are the biggest drainers of funds for any business or startup. While bootstrapping, your funds are severely limited, so you should try as much as possible to reduce your overhead costs.
  3. Do limit things to just your team: Outsourcing can be an expensive venture if not adequately managed. As such, you should try to keep tasks within the team as much as possible. This will allow you to save on costs while also building on your team members’ existing skillsets.
  4. Do cut your personal expenses: While you should keep your business and personal lives separate most times, this doesn’t apply when you bootstrap a startup. Your personal funds are what is going into the business. So, you try as much as possible to reduce your personal spending, so you have more money to invest in your startup.
  5. Do sell your services: Angel investors are not the only ways to raise money for a startup. If you have a handy skill and some free time, sell that skill as a service to others. By doing this, you will raise additional funds that you can invest in your startup. No matter how little you make, remember that every cent counts.

Don’ts

  1. Don’t get a loan: Startups fail almost every day. Rather than racking up debt while launching, wait until you start to earn profit from the startup before even considering a loan.
  2. Don’t chase funds with just an idea: Angel investors and venture capitalists are more likely to open up their wallets if you already have something up and running. If you are still at the idea stage, try to build, launch and grow your startup alone, and the investors will come running later on.
  3. Don’t expect instant results: Startups are difficult work. They take years before they break even, and even more time before they begin to yield profits. So take your time, get your hands dirty, and the profits you want to see will undoubtedly come your way.
  4. Don’t give up: As we already mentioned, startups are difficult work. They are not meant for the faint of heart. So prepare yourself for the long journey and don’t give up along the way.

References

https://fi.co/insight/bootstrapping-a-startup-the-essential-tips

https://www.fastcompany.com/3038208/10-tips-for-bootstrapping-your-startup

https://neilpatel.com/blog/bootstrap-startup/

https://www.quora.com/What-are-the-dos-and-donts-when-bootstrapping-for-a-tech-startup

Virtual Hiring: What you should know

Virtual Hiring: What you should know

Josephine O. Edwards
Guest Writer

Many businesses have been forced to take their operations online thanks to the pandemic. For larger corporations with a prior online presence, this transition was relatively easy. But for smaller businesses or new startups, things haven’t exactly been easy.

Most entrepreneurs and business owners were initially focused on how to drive their products online. But as they soon discovered, existing in a digital space didn’t remove the need to hire or recruit new staff. Instead, it only changed the process into a virtual one, birthing what is now known as virtual hiring or virtual recruiting.

Together, we will take a look at what the virtual hiring process is all about. Let’s get started.

What is Virtual Hiring?

As the name implies, it is a hiring process that takes place virtually. It involves remotely interviewing potential candidates without any face-to-face or physical interaction. The entire process is possible, thanks to current technology trends.

Thanks to recent technological innovations like video conferencing and other chat solutions, businesses can now hire, train, or onboard staff anywhere in the world.

Virtual hiring sets itself apart from the normal recruitment process in many ways. However, the most distinct difference lies in the fact that it can be an automated process. Recruiters can choose to administer the interviews themselves or have chatbots conduct the process on their behalf.  

It should also be noted that virtual events such as seminars, webinars and career fairs can be considered forms of virtual hiring.

So what are the pros and cons of this new hiring process? Let’s take a look.

 Pros of Virtual Hiring

Currently, the most significant advantage of virtual hiring is that it makes it safe to meet, albeit virtually. Businesses can still hold interviews and meetings while keeping their employees and candidates safe from the pandemic.

 Other advantages of virtual hiring include

  • It reduces the cost of the recruitment process. Rather than having to do things manually, virtual hiring allows for automation. Through this, the expenses a business might incur from hosting an interview are significantly reduced.
  • It saves time and protects the schedules of all involved. By taking advantage of the digital process, recruiters can conduct more interviews in a shorter time. Chatbots, online assessments, and one-way video interviews are tools that can help with this.  
  • It reduces bias and opens doors to the global labour market. Virtual hiring can take place remotely. As such, recruiters can interview and hire candidates from all over the world. Thanks to this, they can also avoid some hiring biases and pick candidates who are most suited for the job.

Cons of Virtual Hiring

Virtual hiring isn’t a perfect process. While it has its benefits, it also has drawbacks that limit its impact. These drawbacks aren’t necessarily absolute limitations, but they are challenges that must be navigated with care.

The limitations of virtual hiring are

  • It is difficult to determine if a candidate is a right fit for your business. Physical interviews allow recruiters to gauge how well a candidate will match your business culture. Virtual interviews do not offer this benefit; you may hire a candidate only to discover they don’t fit in with your team.  
  • The experience of the candidate could suffer. Doing things virtually may cause a communication gap between you and your new employees. As such, they may end up feeling undervalued and removed from the other team members. If care is not taken, this might cause a drop in performance or even lead to them leaving the business.

Virtual hiring does bring change to the recruitment process. But it is up to you as an entrepreneur or business owner to fine-tune the process. That is the only way to ensure your efforts aren’t wasted.

References

https://www.macslist.org/for-employers/virtual-recruitment-how-to-hire-train-and-onboard-in-a-remote-world

https://www.icims.com/glossary/virtual-recruiting/

https://harver.com/blog/virtual-recruiting/#Limitations

Does your startup really need venture capitalists?

Does your startup really need venture capitalists?

Akinpelu Babatola
Guest Writer

Launching a startup is no easy feat. You will need not just a feasible idea but a whole lot of money too. Usually, most small scale startups are funded from the personal pockets of the owner(s). In order situations, they tend to source money from others.

One of such sources is venture capital.  

A startup can quickly raise most of its necessary funds and start operations pretty quickly by choosing this option. But the question remains, is it really worth it?

To answer that, we must go about learning what venture capital is, and the pros and cons of venture capital.

Let’s begin

What is venture capital?

Simply put, venture capital is funds provided by an investor in exchange for equity shares in your company. Investors are usually classified as venture capital funds or angel investors.

Venture capital funds are known for investing in several companies; usually referred to as a portfolio. While not all of these investments earn returns, most do and end up paying back their investments.

Angel investors, on the other hand, are individuals with funds to spare for investments. Typically, they choose one company or industry that they are familiar with to invest in.

Regardless of which type of investor you find, they have specific characteristics in common. Some of which are,

  • They usually vet your startup or business before investing in it
  • They are willing to be patient and earn their returns over a long period.
  • They exchange their funds as investments to have a say in how your startup operates.

The Pros and Cons

The Pros:

  • It is a source of funds: Venture capitalists usually provide all the necessary funds you need to get your startup up and running. If you are also trying to grow your business beyond what it currently is, consider finding such an investor.
  • It is a source of necessary resources: Venture capitalists are not just sources of funds. They are also willing to shoulder the burden of providing some resources and connections that you might need. This eliminates the need to start from point zero in any market.

The Cons

  • Your goals might differ: the main point of any investment is to earn returns on it. While venture capitalists may be patient to play the long game, they also want to earn profits. This may lead to them selling their stocks or exiting the company at a later point if your goals start to differ.
  • You lose your independence: Once you bring a venture capitalist on board, they end up having a say in how you operate. You have to run your decisions by them, and depending on how much stock you gave away in exchange for funds, you may end up having to do things their own way.  

Before bringing on a venture capitalist, you should weigh the projected benefits against the potential demerits. If you are unsure, then it’s best to turn to other sources for your required funds. If you can handle having them on board, then, by all means, go for it.

References

https://www.investopedia.com/articles/personal-finance/102815/does-your-startup-need-venture-capital-money.asp#:~:text=If%20you%20are%20an%20entrepreneur,you%20build%20up%20your%20business.

https://thenextweb.com/growth-quarters/2020/02/14/what-is-venture-capital-why-does-it-matter-for-startups/

https://hbr.org/1998/11/how-venture-capital-works

https://www.entrepreneur.com/article/353526

How to grow your business

How to grow your business

Josephine O. Edwards
Guest Writer

Build, launch, and grow; these three words define the journey of any startup or business. Building and launching might be daunting, but they aren’t as difficult as they appear. Growing is another issue entirely.

Ask any established business owner; they will tell you the same.

Growing a business is an uphill task. It takes a lot of effort, time, dedication and sometimes, even risks. The change you want to see won’t happen overnight, or even during the coming week.

Instead it will be a gradual change that will require you to keep moving forward in other to achieve it.

If you are serious about growing your business and think you have what it takes to keep going, here are some of our tips on how to grow your business.

  1. Improve customer loyalty: Most startups choose to focus more on getting new customers. While this is not a bad idea, your efforts could become wasted if your customers are not loyal. You have to make sure that your customers keep buying from you and not your rivals. To achieve this, you can reward them for their loyalty and remind them that you appreciate their business.
  2. Take advantage of social media: Without a doubt, social media is one of the most popular technology trends currently. New platforms keep popping up one after the other every day. It would be best if you took advantage of as many social media platforms as possible to grow your business. This will improve your business reach and readily provide information about any of your business’ promo events.
  3. Network as much as possible: A business does not grow by staying in the same place. Make sure to attend as many networking events that are related to your startup as possible. You will come across people who are willing to help or provide insight into improving operations. So take your time to network and build connections for your business.
  4. Improve your customer service: if you manage to impress your customers with your customer service skills, then chances are they will come back to buy from you or use your service. If you provide discounts to your customers on some particular goods, they are bound to spread the word about your business to others too. This will yield more customers for you as well as loyal customers too.
  5. Source for more funds: Growth is impossible without extra funds. You can acquire these funds in several ways. Investors may be asked to invest more, banks may provide you with loans, or you can use personal funds. As long as you can raise the necessary funds, then your business is bound to grow if managed correctly.

References

https://www.thebalancesmb.com/top-ways-of-growing-your-business-2948140

https://www.businessnewsdaily.com/7690-rapid-business-growth-tips.html

https://smallbiztrends.com/2018/04/how-to-grow-your-small-business.html

https://www.smallbusiness.wa.gov.au/business-advice/marketing/8-ways-to-grow-your-business

What is a Business Plan, and why do I need one?

What is a Business Plan, and why do I need one?

Akinpelu Babatola
Guest Writer

As an aspiring business owner or potential startup partner, you have probably come across the term “business plan.” If you have not, well, now you have. 

So what is a business plan? And what’s the big deal about it?

Well, let’s find out together, shall we?

What is a business plan?

Simply put, a business plan is a guide for your business. It outlines all the aims and objectives you have for your business and how you intend to achieve those aims and objectives. 

You can also think of it as a roadmap for how your business will operate. 

You might be worried about business plans being technical and super formal. But that’s not the case. If you have plans for your business written down anywhere, you have a written a business plan.

Those jottings on the napkins, scraps of paper or the corner of your journal all qualify as a basic business plan.

If you are going to present your plans to others though, these won’t do. You will need a much more detailed or formal business plan. Investors, banks and any other person interested in your business will be expecting a formal business plan and not just a napkin.

What goes in a formal business plan?

As already mentioned, a formal business plan is a more detailed plan than usual. It is usually filled with several subsections that discuss different areas of operations of your business. The most common elements of a formal business plan are

An Executive Summary: this is a brief description of why you are writing the business plan; whether to seek a loan for remodelling or funds to launch your business.

Overview of the business: this is where you talk about what your business is all about, what industry you operate in and what things will look like going forward. You can also talk about your products under this section or choose to create an entirely new section just for that.

Marketing plans: how do you intend to break into the market? Who are your competitors? What edge do you have over them? You will answer all these and more marketing questions in this section. Some business plans choose to do competitor analysis separately from their marketing plans. Choose whichever option is more convenient.

Overview of operations: You will need to discuss your business’s operation and management in this section. It will cover anything and everything from logistics to team member responsibilities. 

Financial analysis: this is perhaps the section most investors pay attention to the most. After all, it is where you tell them how your funds will be used, how much income they should expect, and any other finance-related sections of your business or startup. 

Based on your unique circumstances, you may be required to write more in your business plan. But these are the essential elements of any detailed business plan. Learning about business plans can be daunting. But there are reasons for it. 

You and your business need at least one business plan, and here are some reasons why:

  1. To better understand your business goals
  2. To show others, particularly investors, that you are serious about your business
  3. To plan for uncertain events
  4. To better understand your market, competitors and your consumers
  5. To present the feasibility of your business idea 
  6. To better estimate your costs and budgeting. 

Now you understand why you need a business plan, so why not let us at the Xpress Train help you get started. 

References

https://articles.bplans.com/what-is-a-business-plan/

https://www.investopedia.com/terms/b/business-plan.asp

https://www.entrepreneur.com/encyclopedia/business-plan

https://www.growthink.com/content/20-reasons-why-you-need-business-plan