When kickstarting a business, entrepreneurs usually bootstrap to fund their new business. It is not uncommon for people to use their savings in the beginning.
Although bootstrapping is a common way to fund a business, there is a limited discussion on how to utilize a limited budget. Therefore, today I’d like to discuss the Pareto principle, the 80/20 principle.
We all know that it’s exciting to start a new venture and invest our money in an idea that we truly believe in. However, one should be careful on how to use the budget and avoid spending money on something with small returns.
It is recommended to focus on High-Impact Activities. Identify the 20% of tasks that yield 80% of the results. Prioritise these activities and spend your bootstrapped money on them. For instance, focus on revenue-generating tasks, customer acquisition, and product development.