Transcript Bootstrapping - Belmont University

Bootstrapping
ETP 3700
Bootstrapping
Techniques and tools that can help achieve
the same outcomes while greatly reducing
costs.
Why Bootstrap?
• Start-up: Often necessary for small
businesses to get started
• Growth: Difficulty in raising money for
growth due to cash flow strains
• Exit: Preserves the value and wealth of a
business (EBITDA)
– The Problem of Sharing Equity
– The Problem of Using Debt
Ethics of Bootstrapping
• Don’t pass along your cash flow problems to
someone else
• Don’t embellish financial position
• Don’t create false impressions (Take Chris
Cornell’s advise!)
• Promises, promises, promises
• Ham and egging
• “Giving you my best price”
• Don’t pirate media space (e.g., SPAM to web
sites)
Administrative Overhead Bootstrapping
• “A Rolex doesn’t really keep any better
time than a Timex”
• “Luxury is waste”
• “We decided to skip the cell phones and
hire another production worker”
• “Why buy new when used will do?”
Administrative Overhead Bootstrapping
Space
• Bedrooms, basements, garages, dining
rooms, kitchens & barns
• Virtual space (Kinko’s, Bongo Java, etc.)
• Mooch space
• Look for weak real estate markets
Administrative Overhead Bootstrapping
Space: The Virtual Company
• Have face-to-face orientations
• Train on effective e-mail, voice mail, instant
messaging
• Stamp out rumor wildfires
• Steady flow of information (even daily briefings
via e-mail) ties virtual employees together
• Meet face-to-face once a week
Administrative Overhead Bootstrapping
Furnishings and equipment
• Auctions
• Scrounge
• “Haul it and its yours” Opportunities
• Business Closings
Administrative Overhead Bootstrapping
Computers, Phones & Equipment
•
Virtual Equipment (Kinko’s)
•
Know what you REALLY need
•
Install yourself
•
Carefully monitor # phone lines needed
Administrative Overhead Bootstrapping
•
•
•
•
Administrative salaries (often includes
part or all of you!)
Every dollar spent on administration takes
a dollar away from producing sales
Don’t Over-hire (in terms of qualifications
or numbers)
Overhead or profits: Your Choice
Operations & Inventory Bootstrapping
• Outsourcing
• Effective cost accounting to assess
operations and inventory effectiveness
Operations & Inventory
Bootstrapping
•
Just-in-time inventory techniques
–
–
–
–
•
Establish continuous inventory update
Set high standards for on-time shipping
Track time to fill back orders
Track customer complaints as a % of orders
shipped
Use KISS Principle for your Inventory
(why stock 15 shades of blue when two
will due)
Bootstrap Marketing
• Know your customer
• Impact of message more important than
“volume”
• Remember your niche and the benefits you
bring
• Spend your marketing dollars carefully
• Marketing is a process, not an event
• Integrate into Business Plan
Tools and Techniques:
Mini-media
The Power of the Business Card
• Never Cut Corners
• Design, paper, color, embossing
• Include all critical data, but none that’s
useless
• Include description or slogan
Tools and Techniques:
Mini-media
The Power of the Business Card
• Remember, it has two sides
–
–
–
–
–
Pricing
Map
Useful trivia
Photo of Product
Quotes
Tools and Techniques:
Mini-media
The Power of the Business Card
Exercise: In groups of two, interview each
other about your businesses. Make a
layout of a business card for the other
person’s business.
Tools and Techniques:
Mini-media
Brochures
• Provides a visual presentation
• Increases credibility
• Decreases immediate pressure on
customer
• Captures your pitch
Tools and Techniques:
Mini-media
Brochure Design:
• Tailor to your market’s expectations
• Include clear headline
• Make visually appealing (graphics, white space)
• Tell your story
• Testimonials
• Make it worth hanging on to
• Include useful contact info
• Ask for action (order form, more info form)
Tools and Techniques:
Mini-media
Brochures
In groups of 2-3, evaluate the effectiveness of
the sample brochure provided in class.
Tools and Techniques:
Mini-media
Video/DVD Brochures
• Production is key
• $1000-$5000 per minute
• Use your Belmont Network!
Tools and Techniques:
Mini-media
Video/DVD Brochures
Evaluate the effectiveness of the sample video
brochure. What would you change?
Tools and Techniques:
Mini-media
Banners & signs
• Proofread!!!
• Make it good, make it last
• Short message
• Use lights
Tools and Techniques:
Mini-media
Newsletters
• Make it interesting, informative, educational
• Proofread!!!
• Keep it tight
• Use design
• Highlight your customers when you can
• Keep consistent look, feel, theme, focus
• Once you start….
• Print, electronic newsletters
Tools and Techniques:
Mini-media
Newsletters
In groups of 2-3, evaluate the effectiveness of
the sample newsletter provided in class.
Tools and Techniques:
Targeted Media
Customer Contact Data Bases
•
Send discount coupon to get ‘em in the door
•
Send greeting cards
•
Send “gifts” (trinkets)
•
Send articles
•
Send e-mail blasts
•
Send thank you notes
•
Newsletter
•
Secret sale or special celebration postcard
•
Special contest postcard
•
Special announcement (new hire, new product)
Tools and Techniques:
Targeted Media
Creating a Customer Contact Data Base
• Track everyone that deals with your business and put
them in your database – easiest if done from the start
• Fishbowl Contests
• Suggestions box
• Offer free newsletter or catalogue for anyone who
gives you their address
• Create an offer that requires people to fill out form
• Phone books or other free lists
Tools and Techniques:
Targeted Media
Direct Mail
• Buying lists
• Keep it focused
• Invite an action
• Be creative and be visual
• Test your effectiveness
Tools and Techniques:
Advertising
Rules of bootstrap advertising:
• One-shot ads (almost) never work
• Quality counts: production is surprisingly cheap
• Ethics matter
–
–
–
–
–
–
Be honest
Disparagement is unacceptable
Be clear on your intent
Be clear on who you are
Do not use “invoices” for solicitation
Call it free, only if it really is
Tools and Techniques:
Advertising
Tips for effective newspaper ads
•
Strong headline
•
Use pictures
•
Include testimonials
•
Make an offer to get them to act
•
Include a border
•
Use color
•
Test, test, test
•
Placement matters
•
Copy is good – it’s a newspaper after all
•
Include easy contact info
Tools and Techniques:
Advertising
Tips for Magazine Ads
• Bigger ads get more attention
• Color ads get more attention
• Position does not matter, except if on cover
• Rerunning ad is OK
• Photos are more effective than drawings
• Showing product in use is better than showing
static product
• Ads with people in them get more attention than
ads without
Tools and Techniques:
Advertising
Yellow Pages
•
Jam in copy
•
As big as budget allows (compare to competition)
•
Color
•
Stress your reliability, integrity and trustworthiness
•
Stress your scope
•
Illustrations/logos are effective
•
Give easy directions to your location
•
Know the timing for ad purchases
Tools and Techniques:
Advertising
Radio Advertising
•
Highly targeted
•
Reinforces other media used
•
Humor works, but be sincere
•
Shorter is better – you have 5 seconds to grab them
•
Live spots are effective
•
Creates urgency
•
Stations will barter
•
Mention your name 5 times per 30 second ad
•
Use a single voice
•
Use only one or two stations
Tools and Techniques:
Advertising
Television Advertising – its even for bootstrappers
• Cable ads run for as little as $100 per spot
• Keep it clear
• Keep it visual
• Make it memorable
• Quality matters
• Call them to act
• Content sells products
•
•
•
•
Tools and Techniques:
Web pages
Understand its usefulness for potential and/or
existing customers – make sure you think
like your customers!
Plan for its use: promotion, communication,
order processing
Budget for maintenance - Keeping it up-todate takes time and money
Develop a plan to drive people to the site
Tools and Techniques:
Web pages
Pathfinder Therapeutics, Inc
Sova Catering
Station West
Just Kidding Productions
Nashville Creative
River Rock Media
Tools and Techniques:
Person-to-Person
•
•
•
•
Personal selling
Trade shows
Phone and e-mail sales
Social-network sites (e.g., MySpace)
Tools and Techniques:
Publicity
•
•
•
•
•
•
Free Advertising
Press Releases: Consistent, focused
targets
Do your homework
Include cover letter or relevant article
Build relationships
Create your own angle
Tools and Techniques:
Publicity
•
•
•
•
•
•
Newspapers, magazines, radio, television
Follow-up with phone call
Be persistent
Don’t be afraid to break the rules
Quality counts
Example: Snappy Auction
Tools and Techniques:
Publicity
Exercise: In groups of 2-3, develop a press
release for the opening of one of the
businesses from your group members.
Exchange with another group and critique
their press release.
Tools and Techniques:
Word of Mouth
• Must motivate customers to talk about you
– excellence in customer service
• Incentives to spread the word (referral
“thank you” program)
• Ask your customer to “sell” for you
• Creating a “buzz campaign”
•
•
•
•
•
Emerging Tools and Techniques:
Blogs
As of 2005, 10% of small businesses were
using or were planning to use blogs for their
businesses
Allows for very targeted contact
Like a newsletter, a forum to share useful
information and expertise
A personal feel
Can be a good public relations tool
Emerging Tools and Techniques:
Blogs
• Cautions for Blogging as a Marketing Tool
– Need to be consistent – takes time to do it well
– Need to be cautious about what you say
– Avoid crossing the line and becoming too selfserving – blog readers will not come back
– Remember that the WHOLE world can read
what you say, including your employees, your
competition, your banker, etc.
Other Emerging
Tools and Techniques
•
•
•
•
Street teams
e-mail teams
Podcasting
Video podcasting
Human Resources Bootstrapping
•
•
•
•
•
•
Employee “stretching”
Independent contractors
Employee leasing and temporary employees
Student interns
Equity compensation
Accurate forecasting of employment needs
Human Resources Bootstrapping
• Non-monetary benefits
–
–
–
–
Offer flexibility
Work environment
Growth potential
Participating in start-up
• Outsource payroll
• Part-time executives
• Grow your own talent