Bootstrapping is the art of starting your own business with little or no money, with limited input from others. It’s about ‘pulling up your bootstraps’ and doing everything you can to avoid debt, significant investment or capital. Although it’s hard work, it’s an attractive prospect for new business owners because of the long term stability it can provide. No loans mean no repetitive monthly payments or high-interest rates to pay and no investment means keeping 100% equity of your business. There are many arts of bootstrapping your business that should also be used even when you’re a big, successful company. Here are just a few ways you can bootstrap your startup…
1. Start with your own money
Most bootstrapped businesses are solely funded in the beginning by the personal savings of a passionate individual. Maybe you have some savings put to one side that you can use to get yourself set up? If you don’t then you might need to think about working extra hours or selling some of your luxury items to generate the money you’ll need for basic things like stock to sell, business cards or a website. Depending on what it is you’re doing, you might need to pay yourself using your savings for a while until you generate revenue.
2. Forfeit unnecessary luxuries
When bootstrapping a startup, there are many things you may think you need but will have to go without for a while. For instance, you may think it’s compulsory to rent out a trendy office space or shop front, but these costing anything into the thousands, this money could be better spent on other vital things to get your business launched. If you can run your business from home, you will not only save money but can also offset your gas, electricity and internet bills against your tax to cover the increase in rates you’ll see when working from home. While you’re bootstrapping your launch, you’ll need to forfeit the things that are not compulsory for now to spend the money elsewhere. You should only be investing in offices if you know with 100% certainty that having one will increase your clients, customers and your revenue.
3. Only send money you have to spend
Be frugal. Spend only what you absolutely have to spend to get your business off the ground. You may have to take a rather large pay cut to make sure that there’s enough revenue going back into your business to keep it afloat and keep your clients happy. All spending should be absolutely necessary.
Absolutely everything that you have left after you have paid yourself as low a wage as you can possibly manage should be going back into generating more clients and more revenue so that you can grow your business as quickly as possible.
4. Take advantage of free marketing
Admittedly, marketing is more difficult than it’s ever been if you’re doing it without a budget because the best marketing platforms in the world generate their funds through paid advertisers. But, there are still plenty of ways to market your services or products for free. You should most definitely be taking advantage of these if you’re bootstrapping. Teach yourself the basics of attracting Facebook, Twitter and Instagram followers and make sure you invest your time in utilising these platforms and engaging with potential clients and customers. It’s a good idea to have a look at what it is your successful competitors are doing and follow their lead.
5. Consider staff who work for equity instead of wages
If you find yourself in a situation where you need an extra pair of hands then think about employing someone who will work for equity instead of a wage. This means that you’ll pay them more when things are going well and less when they’re not, plus the staff member will work extra hard because they’ll be rewarded for it better in the long run. Remember though, hiring staff should only be considered when absolutely necessary if you’re bootstrapping, your first option should be increasing your own hours for as long as you possibly can.
6. Barter for everything
Bootstrapping is about keeping costs as low as possible and increasing revenues to as high as you can. One of the best ways to do this is to barter for everything. A decrease in cost means you’re keeping more of the money you’re making and investing it back into the company, which means quicker business growth. Consider changing your energy suppliers to get the best deal, for example.
7. Stretch your resources as far as you can
Bootstrapping isn’t just about stretching your money as far as you can, but stretching your resources too. Take as much work as you can on your own shoulders by learning how to manage your accounts and your social media profiles, for example. If you have friends working in industries that would benefit you then ask them to help you by giving you advice or donating you some of their time. Ask your family for their assistance with things that they can help you with.