One often hears people complain that they do not have enough capital to start a business. Sure you need money to get your idea off the ground but do you really need venture funding or bank loans when you barely have any customers? Remember, it’s not easy to attract investors if you haven’t gained traction first.
Do not be discouraged. It’s better to start with less capital than to invest a large amount when you are starting out.
Here’s a little background about the term. As per Wikipedia “Tall boots may have a tab, loop or handle at the top known as a bootstrap, allowing one to use fingers or a boot hook tool to help pulling the boots on. The saying “to pull oneself up by one’s bootstraps” was already in use during the 19th century as an example of an impossible task.”
image source :sxsw.com
Bootstrapping in business parlance, means starting and growing your business with little or no capital. The entrepreneur attempts to build the company from personal funds or from the revenue generated by the new company.
Needless to say bootstrapping is also HARD WORK.
We rounded up a few bootstrapping tips you may want to seriously consider
All ideas are amazing! However what matters is if people are willing to pay in return for your product or service. Research the market, check if someone else is offering something similar or find out the pain points that are not addressed. It’s easier to monetize when you are offering a solution that is currently not available. Ask people if they would be willing to pay for solution. If yes, get them to pay.
Find a partner
Doing it all by yourself can be intimidating and stressful. Find someone (friend or family) who shares your passion for the idea and is willing to join as a partner. There are many who are keen on joining a startup as a partner but not everyone will have the necessary skill or resilience. Pick wisely. Look for complementing skills. Be transparent about what’s in store.
A great way to test your idea and get funded to build a prototype, is crowdfunding. There are various platforms such as Indiegogo and Wishberry that help you promote your idea to a larger audience for a commission. Watch and learn from some of the successful campaigns before you launch your own.
Home office Vs Store front
Time to convert that dining area (in case you don’t have a garage) into your office. Irrespective of whether your offering is a product or service, setting up an office or store front is a big no unless your business necessitates it. You don’t want to burn your pockets paying rent, electricity and other maintenance charges when you are bootstrapping. If you do need a office, try affordable co-working spaces. It may turn out to be an advantage networking with similar like-minded people.
Oh damn! Where do I get the money from for advertising and PR? Fear not. There are other inexpensive ways to promote your business. First and foremost being your customers. If your offering is remarkable your customers will be your brand ambassadors.
Digital marketing is another low-cost marketing channel. Facebook, Twitter, Pinterest, LinkedIn, Blogs, SEO, Email marketing etc can be used effectively to grow your business. Remember that you don’t need to be on all the platforms. Find out where your target audience is and then put a strategy together to attract and convert them. Digital Marketing involves nurturing and providing something of value before you expect a sale. Reward your customers for introducing more users/customers to your business. It’s a proven customer retention method.
Cold-calling and speaking engagements are other tactics to promote your business without having to spend a huge amount of money.
Don’t hire. Outsource. Or better Do-It-Yourself!
Unless absolutely necessary, do not hire. Outsource design/development work. It also wouldn’t hurt to learn to code if you have to build a prototype. You don’t need to be afraid to learn something new.
Do your own accounting and business development.
Track expenses closely. Be thrifty.
That MacBook Air/iPhone 6 can wait. So can the posh office.
Avail free online services to manage communication/storage/tracking. Gmail, Google Drive/Docs, Dropbox etc have sufficient free stuff to get you through your initial stages.
Cut personal expenses where possible. Remember the quote
Entrepreneurship is about living a few years of your life like others won’t so that you can live the rest of your life like others can’t
Track all the expenses like a hawk. Don’t use your personal account. Open a business account. You must know at all times what your pending receivables are. Closely track what is diminishing your cash. Use expensing tracking tools or better, use MS-Excel.
Network. Network. Network
People help people.
Attend networking/entrepreneurship events. Talk about your business and tell people how it solves a problem. But don’t forget to listen. You never know, you might end-up collaborating with another business or might get someone interested in funding your business. But don’t network only with the intention of raising funds. Be willing to help someone. Answer questions people may have about your industry. Join groups on Meetup, Facebook and LinkedIn. Not just groups relevant to entrepreneurship but also interest groups. Follow industry influencers on Twitter.
Winston Churchill said “If you are going through hell, keep going”.
Perseverance is about not giving up rather than about talent or knowledge. You can’t learn perseverance but learn from the mistakes you make early on and make changes. Never lose sight of your goal. It’s better to take risks than regret.
If at first customers don’t turn up, analyze what went wrong. Tweak your offering or maybe your conversion methodology needs to be reworked. Re-negotiate that deal with your vendor/supplier. Ask for help. Do whatever it takes. But don’t ever give up.
Like we said at the beginning, bootstrapping is hard work. Entrepreneurship is a journey. If you are remarkable at what you do, it won’t be long before your dreams are realized.
We recommend you read books such as The $100 Startup by Chris Guillebeau, The Lean Startup by Eric Ries and Rework by Jason Fried for bootstrapping and lean startup methodologies.
Let us know the 10th tip for bootstrapping. Better, share your bootstrapping experience.