At Treble, we love working with the venture capital community and their portfolio companies. They supplied the foundation for our company’s growth and will always be valuable partners.

So I guess it’s a bit ironic that Treble itself has never taken on investors. We’ve been bootstrapped and profitable since inception. Taking investor money is a very serious responsibility—and while growth is paramount—zero growth can happen if the business is no longer in operation.

Taking the bootstrapping approach will quickly reveal a company's true fiscal health. If you can create an immediately profitable business model, focus on scaling it slowly and in a way that bolsters cash reserves. Here are three strategies we’ve implemented or seen clients apply to ensure long-term viability and build cash reserves.

Go On Offense In A Defensive Market

As valuations of later-stage companies have been questioned, this has put pressure on venture-backed startups and enterprises. These companies now need to focus on generating demand and preserving cash. This has had a significant economic impact on companies that provide services like advertising, sales and PR to these organizations, leading to across-the-board cutbacks.

However, companies that go on office in brand-building can gain greater market share in this market. Identifying strategic advertising and sponsorship opportunities and negotiating longer-term vendor partnerships can be an effective offense. The best defense is a good offense, and revenue from this targeted spending will be critical to maintaining operations during an economic downturn.

Keep the Cash Flow Open By Lowering The Burn Rate Earlier

The relationship between employers and employees seems at an all-time low. Layoffs often happen with little notice, or worse, on the heels of raising additional capital. However, business leaders must prioritize financial flexibility. It's better to make tough but necessary decisions to retain top talent and ensure the company's continuity. If you don’t get this right, the entire company could go under.

Understand that employees may not empathize with the company's financial success after layoffs. However, that's a much better scenario than businesses that mishandle cash flow and leave employees with no paycheck and no job. Cash flow optionality is everything, and companies should aim to mitigate all costs that don’t return revenue, from expensive meals to office leases.

Prioritize Recurring Revenue Over Short-Term Profitability

When demand is high, you can command premium prices. But when businesses are cutting spending, profitability matters less than recurring revenue. In marketing, for example, companies now demand more ROI for smaller budgets than before the pandemic. As Ewan McIntyre wrote in the Harvard Business Review, “Enterprises have pivoted from investing in digital growth tools to needing those investments to start paying off.”

Flexibility with pricing is paramount when cash flow is the key factor of consideration. Today, at Treble, winning two or three new accounts can significantly impact top-line revenue and cash flow. Even if those accounts are not the most profitable, they enable us to reach a point of economic sustainability and allow us to negotiate future contract negotiations on more favorable terms. This flexible, long-term mindset is better than a short-term, fixed approach. Even better, wins create more wins, and the network effect of doing great work generates recurring revenue that sets the business up for future success.

If economic conditions change and venture capital funds start to flow more freely, I’d still advise startups to adopt a bootstrapped mindset. The fun part about creating recurring cash flow and a profitable business from the jump is that it turns the tables on the investors: They want to be a part of your successful and growing enterprise rather than you depending on them for survival.

Bootstrapping is the ultimate long game, and those with the mindset of creating a sustainable and profitable business will be the winners.