Bootstrapping your company is made romantic with a set of know how. Here are trusted tips how to bootstrap a startup without any third party funding.
Over the year’s people from ordinary neighborhood, that was not born to a prestigious home, without all the fancy childhood experience has went out shaping history by creating a business that has solve peoples problem. And made them a future by the way.
How did they made it?
Some of them where lucky enough to get ventures capitalist fund there startups.
But many ass there hills, and bootstrap on there own. Providing all the necessary resources and build there startups to a sustainable level.
This article bring you through how successful business were able to bootstrap there business ideas. And create something to point out.
What is bootstrapping?
Boostrapping your startup is basically the process of starting a new business without any external funding. A bootstrap startup will rely on the internal revenue from the founders pocket to grow. In other word the company spends what it makes.
In reality most early stage bootstrapping startups will need a little bit of funding. So a typical bootstrapping startup may rely on the founders overdraft, savings, depending on a part-time job, or doing some freelance work to cover the bills.
Start and then stick with it.
There are countless example if companies that has bootstrap there way up. You may have probably heard the saying ” pull yourself up by your own bootstraps” this phrase comes from the old boots with straps on the side that help people pull them on.
And there are countless successful bootstrapped startups out there, some of then are the largest companies in the world. Like, coca cola, Apple, dell etc.
Nick woodman started this bootstrapped business with $10,000 that he earned from selling bead and shell bets out his van.
Woodman designed the first product, created the prototypes, arranged the manufacturing, and sold it to suppliers himself-all why living at home with his parents.
“Gopro early days, are a great lesson [about] the potential of a humble beginning. ” said woodman. “You don’t have to start off with a bang or a big idea. You just have to start and then stick with it.
Below are proven ways to bootstrap a startup successfully.
1. Boostrapping your company with lean startup mythology.
You must have heard of lean startup. First written about by Eric lies. Though bootstrapping and lean startup are complementary, they are not same thing. But its a process if followed we provide a road map for achieving sustainability.
Bootstrapping provides a strategic roadmap for achieving sustainable business, through customers funding. (I.e, charging customers)
Over the years people has popped there own thought about what actually lean startups his. Which is quite different from what was on the mind of the author, Eric ries.
1. They take going lean for been cheap.
Which is from all angle far from what actually lean startup is while bootstrapping.
Before the movement of the lean startup. The alternative was writing business plan, raising, millions of dollars in seed capital, and then working on a perfect product that the market want.
Which can turnout the market doesn’t even need it. And can take up to two years to get it validated.
But with lean startups continual testing and validation is built into the lean startup process. In order to get the process into the customers hand as fast as possible. Why maximizing the business growth.
When you’re building a lean startup, you want to make sure that you’re constantly testing and validating your product so that your product is in your customers hand as possible.
You can now see that talking been lean to been cheap is entirely misleading.
Money is just one of those resources and there is a time to conserve spending (before product/market fit) and a time to spend (after product/market fit). Our scarcest resource, however is time.
Why bootstrappers should use the lean startup methology.
With the Vast amount of failed startups. No matter the industry and the size if business you want to build, you are likely to face challenges, and roadblocks of all kinds. If you follow the traditional startup formula of writing a business plan, pitching to investors, building your product. And selling it, you might spent year’s on one business idea only to have it fail.
With lean startup, once you have come out with a idea the customer won’t resist. Next, we be to grow your product via Minimum viable product.(mvp) the MVP is a version of the product you wish to build that will allow your team to easily collect the most data about your potential customers and their feedback. On the product as possible.
So a lean startup is a company that focuses on quickly creating prototypes with the goal of testing assumptions. Customer feedback is used to drive each iteration allowing for much faster evolution than a traditional development process.
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2. Build your brand with free media tools.
The value of a strong brand in today’s crowded marketplace, is worth is weight in golds.
Your brand is what makes you different. It attracts new users and get peoples attention among all the competition out there.
As knowthy, figure out that B2b decision -makers consider your brand an important factor when comparing suppliers.
There are simple and free ways you can build your brand without spending a lot.
Some year’s ago all the media traction were on multimedia channels like, television radio, bill board etc. But now, I can promise you, you can build a household brand without appearing on multi media.
All the media attention is now on social media now, And it’s free, and relatedly cheap. Social media is the best criteria for bootstrapping entrepreneurs at all industry.
1. Learn to understand your audience.
You’ve probably heard that knowing your audience is the key to creating marketing messages that appeals to them. A great way to get to know them? Create a buyer persona-a semi-fictionalized representation of the value and characteristics of your ideal customer.
Even those with large pie of fun can’t waist it all on untargeted ads.
But with an well understand customer behavior you can target. There needs and goals and behavior and your branding effort to reach out to them.
You are confused where your audience spent there time.
I’ll bet you, they’re on one of our popular social media.
According to review42 stat, time people spend around social media.
- The average US adult spends 38 minutes per day on Facebook.
- 16-24 year’s old spend a median of 3 hours a day on social media.
- Internet users spend an average of 2hrs and 22 minutes per day on social networks in 2019.
- The average daily time spent on social media in 2018 was 142 minutes a day.
- By 2021 more than 3 billion people are expected to be on social media.
- Projections for social media use estimates the average adult will spend 6 years and 8 months of life on social media.
- Facebook has 1.4 billion active users on a daily basis. That’s to say that people are always present on social, and that make it the best free place to build your attention.
2. Get your most out of brand credentials.
Logos are vital to a brand but that’s not what a brand is all about. Your brand logo upholds the absolute identity of your company. It’s responsible for leaving behind long standing imprints of your companies in the mind of your target audience.
3. Formulate a content strategy for all social media.
There is one language that social media understand most, “content” signing up a social media account won’t do you much good. Without updating it with content. Devoting an hour a day to social media and consistently, everyday postings it with videos, text and images.
By posting and participating on social media, you create a marketing portal around the world, and best of all, it’s all free. All bootstrap entrepreneurs can Advertise your brand at a low cost during your startup to form an audience for your product and services.
3. Cut your expenses as you’re bootstrapping your company.
You have to bear at the back of your mind that a startup is not a get rich quick scene. Though wealth, has been created by entrepreneurs, it’s not at the early stage.
Why you may later earn a decent salary later on, it can’t be a perfect match as you are starting out. In most case the early stage of your bootstrap startup will need you going for freelance or part-time job to sustain the startup.
I’ve seen many vc founded companies, fail because all they know, about business is to spend money. And that’s one skill you don’t have to master at all as a bootstrapper
Recent research have shown that 75% of startup founders in silicon Valley has salary below $75,000.
That’s not a lot of money but that’s just a price you have to pay to scole there business. Sometime you’ll need to get use not owning a car, rather use a bike which is by far healthier.
Some expense to avoid why bootstrapping your company.
- A fancy office: everyone wants a plush office, but the expenses involved in creating this business oasis can add up quickly. Most of today’s mega business were start from living room garage, so focus on business success first. “The office can wait”
- Expensive suscriptions: most times email marketing software or other software have cheaper alternatives. E.g, for email marketing you can use MailChimp which allows up to 2000 email subscribers on it free version. When reach that rate you’ll be required to upgrade. Not only for email marketing you need to look for other rated software that are cheap.
- Staffing before you’re ready: its fun to be an employer and to watch your startup grow. But if your business is not ready you are just wasting money. Outsource first and only bring out employees, if it makes financial sense to do so.
- Expensive clothing: everyone may like to look elegant. But it’s not a sign of success wearing extravagant stuff you can’t afford. Rather it makes you fake, don’t let your ego put you out of business. It’s important to look professional but you can do fairly cheaply. If you are smart about how you shop.
- Expensive equipment: like everybody, the latest laptop can make sense, after all that’s what all successful entrepreneurs use. Nevertheless you can still see a nice window laptop on budget. The latest technologies doesn’t mean success neither does it guarantee success. It only break your budget, and make you miserable. Purchase only what you truly need, and do so as economically as possible.
- Expensive shipping or printing cost: while having a logo and some inexpensive business card make sense, there is no reason for young companies to spend money on major printing or shipping expenses. You can get reliable freelancer on Fiverr with fees that won’t break your bank.
Let technologies do the heavy lifting for your bootstrap company.
No doubt you know that there are many tools to manage your personal finances; small business can take advantage of some of those tools. Like Expensify. Is a free tool for creating expenses reports and is available online from your computer or mobile device. And there is also the standard bearer, Quickbook by intuit, which can help handle your business basic accounting.
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4. Offer freelance services.
Hiring freelancers is becoming not only more profitable but more attractive for many small business. And this create a way broad opportunity why bootstrapping your company. As you’ll always need to come out with extra pie of cash.
We’ll always have bills to pay and expense that won’t go away overnight. Once will decide to chase our dreams. Choosing to become an entrepreneur comes with great opportunity.
That’s why you should consider been a freelancer if you have the time and the knowledge. Digital skills like graphic design, and marketing skills like content marketing, are paying well.
From a article from ddiy.co we saw some mind blowing statistics that call round how freelancing industry has been evolving, daily.
- With the global workforce if about 3.5billion there are about 1.1billion freelancers around the world.
- 75% of freelancers says they wont trade there freelancing job for another type of job.
- 55% of freelancers still have other full-time jobs.
Freelancers much especially freelance writers earn around 50k annually. Such amount can help you stuff some personal or business need as a bootstrapper.
What you need to know about bootstrapping especially when bootstrapping a company.
With freelancing, you’ll need to be a bit discipline to meet schedule and meeting your clients need. Because client’s want you to make there life easier and solve a problem rather than creating more.
So, how can you do a work that meet clients need. Why working on a bootstrapped startup.
1. Craft a perfect job proposal:
Though with the tremendous and increasing number of freelancers available now. You may think it’s complicated to seize a freelance job. No, you can still standout and get the job. But it all start with your proposal.
Convincing potential clients that you are the best fit for the job. (With a strong freelance proposal) is an invaluable skill to learn early on.
2. Let’s clients know you are interested in there business:
Client’s are real humans like you, that wants real results, whether it a life coaching you are offering. They want to see improvements. So you make sure you have the interpersonal skills enough to do that be sure you are personable enough.
How are you going to do this? Make sure you are human enough, transparent and professional with them, explain to them everything they should expect why working with you. Give them the feeling that you are not just after the earning but them.
3. Learn to say no.
Building your own business is not a easy tasks especially when you are taking care of all the financial supplies. And are doing most of the works by yourself.
And then having a freelance career by the side. No one need a prophet to tell that’s rigorous and hard. You want your business thriving and at same time want to impress every client if yours. It’s not easy, At most case it can result stress or even bornout that can lower the quality of your work. And cause your startup struggling.
Whatever your decision is you will disappoint someone, whether it’s yourself, client’s or family. That’s why you should learn to say no if you think your workload is already enough to balance everything.
5. Bring to use the power of content marketing.
Content Marketing, is one of the most effective ways online business can meet new people. 70% of consumers Thinks that brand that create original content want to build relationships.
Huh! But what is content marketing.
Content Marketing is a strategic marketing approach focused on creating and distributing valuable, relevant and consistent content. To attract and retain a clear defined audience, and ultimately, to drive profitable customer action.
Content Marketing is free, and according to research is return is incomprehensible. If only you have a business website you are done.
More than half of marketers and agency bosses ranked content marketing as their top priority, According to a global report by newbase. This doesn’t come as a surprise as smartphone penetration and the amount if time consumers spend on digital devices, continue to rise.
This make content marketing a highly leverage marketing opportunities for boostrapping companies.
As you can either produce your own content or either reach out to content marketer like me to create contents that’ll make search engine love your website.
An audience that trusts what you say will choose your brand over your competitors. This is Evident in demand Gen’s content preference report 2016. Where 80% of B2B customers consume at least a content before talking action.
People love consuming content and rely on content to aid their buying decisions. B2B companies who engage in blogging efforts received 67% more leads than competitors. While small business who blog experienced 126% higher lead growth Than their non blogging counters.
My last thoughts.
Bootstrapping your company is a hard-work.
Everyone that has been there can attest to that. You need to raise money to for your company and work on your product in the first place. Which you have to sell out consulting or freelance service to pay the bills or work a part-time job.
But you don’t need a lot of money to start a company. Has you can start lean, with a minimum viable product. And track your growth.
Hewleth-packard was started with just $538 in a garage in Palo Alto. California so your living room can be a nice office to start from. Never hire a fancy office space, unless it’s a business that clients has to regularly pay visit.