Doing business is not about raising capital, it’s about making money.
If you currently have an idea of a wonderful startup that will revolutionize the lives of Cameroonians, you are likely to be haunted by this question:
where am I going to find the money to set up my startup?
Even though this question seems vital, statistics show that, out of the 10 common reasons for startup failures, money comes in 8th position.
A better rephrasing of your concern would be: How to do business if financing is not within my reach ?
Fundraising startups are gaining more popularity in the entrepreneurial ecosystem in Cameroon.
These funding approaches will heavily rely on the credibility and the potential of your project. Which depend on your experience in the field of activity where your startup will be positioned.
If you don’t have yet any experience in your field of activity, you may waste a lot of time trying to convince your potential future investors and fundraisers, to the detriment of the alternative which is using this time to work on your product in order to convince your future customers and “make money”.
Here is an alternative philosophy to start your startup: The bootstrapping!
The bootstrapping mindset
Bootstrapping is not a business creation while finding the funding: NO!
The principle of bootstrapping is to do as much as possible with the few resources you dispose.
In other words: Use the lack of money as an asset and not a constraint.
You start your activity and start to gain experience in your field of activity.
This qualifies you for future fundraising and above all, gives you a better understanding of your value chain.
Bootstrapping is a (very) slow process of starting a business. Hence, you will need to be patient and hold back in order not to jump at all opportunities available to you.
You might be haunted by the following thought “if I had the money by now, wouldn’t I move things forward and faster? Am I not wasting time moving slowly like that?”.
Patience in the case of Cameroon is an asset because there are more external risks in the business. This partly explains why Cameroon is ranked 167th out of 190 by World Bank regarding the business climate.
You better believe it, it will be an advantage to be careful and control your growth.
An example of bootstrapping?
You may now be wondering on how to implement the philosophy of bootstrapping within your startup to generate value, sell that value to customers and collect income.
Well, let’s check this out in the next sections
Bootstrapping the skill to produce value
Bet on your certain skills.
As the founder of your startup, you must have the main skill which is necessary to create the product or service that your startup will sell to its customers.
If you are an IT developer, then you should design your products in the form of apps so that they depend on a vital skill that is yours.
If you are an esthetician, then give out aesthetic services in your beauty salon. beauty that rely on your own skill and ability to magnify your customer’s experience.
- Less external services will be needed to generate value for your customers and therefore, less operating costs (therefore more money savings)
- More resilience in production. If there is any problem with your product or if you want to improve it following feedbacks, you can quickly react by yourself without specifically recruit an external service provider.
Bootstrapper in the sale of your product
Gradually give your startup an initial visibility and find out your community.
Turn yourself to new digital marketing approaches such as newsletter, blogging because they probably gather your prospects.
Talk about your product on freely accessible distribution channels such as social networks.
Take inspiration from Jessica Nono who speaks passionately about ChosenNews or Bertrand Foffe who enables us to experience the development of the Jangolo agricultural platform, to name just these two examples.
If you are new to social media, trust Cameroonian marketing platforms to give visibility to your products in Cameroon.
A spontaneous reaction from them on your posts has the potential to give you huge visibility boost shots.
Take care of your presentation and especially the customer experience that a prospect will have when he’ll decide to try your product thanks to your posts.
The first contact is very important, make it M.E.M.O.R.A.B.L.E.
- Quick display of your product
- Quickly collect feedback in order to improve your delivery value to customers
- Building your community of users
Bootstrapping to collect your income
Avoid payment terms for your customers as much as possible, which can be up to 30 days.
Even though it’s not a huge amount of time, it will stress up on your cash flow.
Another way for your startup to make money is to simply spend less.
Master your accounting, for example familiarize yourself with the financial management approach by the 06 accounts.
Avoid inflation in operations, meaning that, do not increase your operating expenses in response to a one-off strong growth in income.
Determine whether it is a upward trend or a simple seasonal behavior linked to your industry.
At www.lohce.com for example, the online bus ticket sales service in Cameroon, it is normal to have an increase in income at the beginning and at the end of vacation periods school and end-of-year celebrations.
Your money is and will remain very precious for your startup, treat it with the most rigour.
For a Cameroonian startup, financing is not always easy, especially if you have no experience yet to reassure potential investors.
Bootstrapping is a philosophy that invites you to direct the limited resources that you currently have, towards the production of value among your customers who are the ones who will finance your startup using the services or products that you will put to their disposition.
This philosophy of doing as much as possible with limited resources, makes perfect sense in the context of the business climate in Cameroon, where the implementation of a lot of business models hardly reassure potential investors.
So, capitalize on what you can do as much as possible and don’t let yourself be distracted by things over which you have no control. Put your priority on bringing real value to your customers by missing out money an opportunity, not a constraint.
Special thank to Anny-laure A. AMANG for this english translation !
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