Most advice online is about how to make your next billion, but in reality, 90% of business owners can't even make their next pay cheque.
I've been a bootstrapped and VC-funded founder for over a decade. In that time I've bootstrapped revenues upwards of £1m and raised well over £60M with early stage startups, but I've also had shattering failures, including the loss of my VC-funded automotive styling business. Knowing what I know now, I could have saved myself. These are the five steps I would take.
Stop the water coming in
1. Reset to zero. No, this doesn't mean liquidate the company. It means pausing all non-revenue-generating activities. It's time to cancel the team chat subscription, cancel your freelancers, turn off your marketing budget, pause your accountants and let go of the friend you have working for you. Pause everything. The only way to stop the ship from sinking is to stop the water coming in. Then we can fix the ship.
2. Back to the drawing board. Understanding how you added value to customers in the past, make a plan to generate quick cash into the business. Network mapping is critical: you need everyone you have sold to or could sell to. Create a spreadsheet and populate it with contacts who have either purchased previously or were significantly engaged in your sales process. Get into planning mode. Leave no stone unturned; you need prospects for the next phases.
3. Set a target. You are not going to be able to solve all the problems immediately, but as you have reduced the burn rate of the company, any new cash that comes in should be able to service the core elements of the business and, most importantly, you. The initial target should be a 14-day plan that unlocks small revenues and starts to build up your confidence.
Get cash moving again
4. Build a product. Forget about the old product you sold. It obviously isn't working, so it's time to refresh the mind. Everyone has a value of time, and sometimes it's best to use it to build your business back up. Employ a consulting mindset. Look at your previous customers: if you had 25 customers, what can you sell to them for £200 each that will provide value to their business? One of my mentors told me: find a transaction, and get in the middle of it. Can you help your existing clients with sales, procurement and so on? Focus on creating something that is easy to sell, with a quick decision period. It's no good if they need to go away and think about it for a month. Make it easy, keep it simple. Back to basics.
5. Start outreach. You need to get moving. Start with a manual system and don't take your foot off the gas. Set yourself targets. First, start with your 25 existing contacts. Then find 25 who are similar to them, and keep it moving. Once you have sold to your first base and got some cash moving in the business again, you can start to go wider and wider with your searches.