10 Ideas for Bootstrapping Your Business

Here are 10 Great Ideas for Bootstrapping a Business

It’s so easy sometimes to assume some angel investor or VC is going to swoop in and just “magically” fund your start-up.  The reality no one wants to hear though, is this doesn’t happen.  In fact, unless you are “in” the tight knit circle….no matter how good of an idea you got, it won’t get you funding.  The only funding that exists for you…is to create your company’s wealth by yourself.  Via bootstrapping.

This isn’t to say though, everyone will bootstrap forever.  Usually what happens, is once the company becomes successful….then money comes running.  And you can count on that happening.  Ever heard someone say “Money only comes when you don’t need it”?  It’s because it’s true.

So today, I know I’m contradicting myself in writing this…but perhaps one of the best things you can do, is to ignore investors while you are building your idea and in the beginning stages of your business.  Pretend they don’t even exist.  You will kill your company trying to satisfy these people, because every single one you talk to will have a different idea of what your company should be.  Build your business for revenue, not investors.

10 Ideas for Bootstrapping

1. Bootstrapping with Crowdfunding

Crowdfunding is usually one of the first ideas for bootstrapping many entrepreneurs will have.  My partners and I actually took crowdfunding for a test drive to see what the big deal was all about.  I found little value, unless you actively promote it directly to possible funders (in which case you must already have a large market reach, or you raise via the platform through friends/family).  This includes a heck of alot more than just putting it up on their site.  Whether or not this time is actually better spent driving revenue into your business, is unknown.  But I suspect it is.  A crowdfunding bill may pass soon that will make fundraising easier for many of you bootstrapping, but we’re all still waiting.

Crowdfunding does however, seem to work really well for art, nonprofits, & film.

2. Bootstrapping with a Business Partner

Business partner or co-founder, whatever you want to call it.  Small businesses really do thrive on two business partners.  Most business partners actually start multiple companies together.  One of you usually handle the back-end, the other handles the front end operations.  This isn’t necessarily cash, but time equates to money.  Business partners (that is…profit/loss partners) almost always split the bills as well.

So if you have someone special in your work life that compliments your own talents really well, consider starting a business together. 🙂

3. Bootstrapping with Strategic Partners

Strategic partners, most often, will not provide cash.  But…what they do offer could quite possibly be more valuable.  Strategic partners often share resources (such as talent), clients, market reach, commercial space, among other things.  Even real estate brokers do this.  Real estate brokers will often share assistants because there isn’t enough work for one full time employee.

4. Bootstrapping with Future Customers

Customers are {and always will be} your best source of revenue.  You might incentive them with discounts to buy your product before it’s built.  This one’s a little harder to do if you’re targeting consumers (B2C), but works better for B2B product based businesses.

5.  Give It Away for Free (No..not always)

We all know the pain in bootstrapping of getting your first client on board.  Every entrepreneur has a first, there is no shame in it.  But clients never want to be the first.  One of the best strategies I have taking a new service to market, is to give away for free to the first one.  Ask that client, if you do a good job…will they refer you to someone (this is the stipulation for giving something away for free).

6.  Bootstrapping with Credit Cards

The majority of businesses are built with…credit cards.  So many people seem to forget that you need to work on establishing credit for your company, just like you did your own personal credit.  Start off small, buy a printer or something around $100 bucks, pay it off over a period of months (yes, it will incur interest…but it will help you build credit for your business).

I’ve listed a few start-up credit cards here.  These are great ideas for bootstrapping for those you who are very young, or who’s credit was dinged by a short sale during the housing crisis.  They have low limits, but again…this is for building business credit.  Do this for a while, then after about a year you can close the account, cut up the card, and upgrade to American Express Business (I just got mine in the mail a few months ago 🙂 ).  AMEX has really high credit lines.

7.  Validate a Profit Margin Before Hiring

A proven profit margin will reduce your risk of hiring additional people.  So your goal as a bootstrapping business, is to not scale the company right off the bat.  Your goal is to find a strategy and prove a profit margin, and then scale (as a side note, many entrepreneurs also make this mistake in attempting to fundraise prior to finding that market fit, strategy, and profit margin.  A company is never ready to scale  until this is proven).

8.  Bootstrapping with Interns

Interns can be excellent for bootstrapping a business.  If you’ve got time on your hands to help train them, that is.  They are a little needy at first, but they could make great employees once they graduate because you’ve already gone through the pain of training them.  Also, I find they are hungry & driven, some work harder than most.

9.  Build Your Brand…Personality

Good businesses have personalities, especially service providers.  If you are a service provider, people aren’t buying a product.  They are buying you.  Portray your personality into your company.  This is cheap and easy to do.  When you get your logo or website designed, explain the personality to the designer.    Logo Mojo is pretty cool if you need a cheaper alternative while you’re bootstrapping.  They’re in that middle ground between too expensive, and too ugly/cheap.  I like them.

10. Share Knowledge

Sharing knowledge is a very powerful way for many service providers to establish themselves as an expert.  It also helps alot of young entrepreneurs.  The funny thing about sharing knowledge is it also strikes up a conversation, which helps you get connected.  Most of the people that have contributed to my company (like my strategic partners, a consultant, and even one of my board members) I met blogging through here.  I had 0 connections when I first started (yes, I was a loner…).  Now I have about 5,000 connections and have mentors all over the place too (now, if I could just remember to follow up with them….).  By the way, if you’ve got something to share…or need to get yourself out there, you’re more than welcome to guest post here.   If you don’t want to write, check out our advertising options to sponsor an article.

In the end, although these ideas for bootstrapping certainly help alleviate some of the pressure…remember you’re an entrepreneur because you’re the first to take the financial risk.  That’s what an entrepreneur does, that’s what an entrepreneur is.  Building a business, whether bootstrapping or not, whether being a product or a service, is a matter of constantly reinvesting in your own business.  And reinvesting in the right things.  You wouldn’t believe how many start-ups I hear say “Well, I don’t want to put any money into my business”.  I don’t want to be harsh on anyone or crush dreams, but if you’re not into risk and investing your own money into your business….well, you might just be in the wrong career.

“If you’ve never put your own paycheck away in a drawer to sacrifice for your company, and the people that work for you, then you’re not an entrepreneur”. – Janice, Founder & CEO of the Gabriel Institute.