If you love the idea of starting your own business but don’t have any funding, then bootstrapping is the answer.
Starting a business on a shoestring is a great way to start working from home and create a new stream of income.
“The feeblest excuse ever given by a would-be entrepreneur is that they can’t raise the start-up capital to get going.” (Former Pizza Express chief executive and self-professed business maverick, Luke Johnson.)
What is bootstrapping?
Bootstrapping means literally to “pull yourself up by your boot straps”, a phrase that stems from 19th Century footwear. Today, it means starting a company with little or no money, from the ground up, and utilising resources that are readily available to you.
Here are six reasons why bootstrapping is a great way to start a business from home.
Bootstrapping requires no funding or large capital outlay and you can start at any time. You can literally start on a shoestring. However, you will need a lot of time, energy, passion and focus.
If you’re bootstrapping, always pick a business you absolutely love because you’re going to live and breathe it 24/7 while you’re starting out.
Typically, the only essential items you’ll need are a computer, an internet connection and a phone. Even small, local businesses need a web or social media presence though. One of your few start-up costs will be registering a domain and ordering business cards.
If you’re clear on who your potential customers are and how you can reach them – and best serve them – you can start getting paying customers very quickly.
Three fantastic ways to promote your business for free!
Leveraging the power of social media and networking are two of the best ways to build your business and find paying customers. They are labour intensive, but a very effective (and low-cost) way of getting your business known. If you’re bootstrapping you have to get out there and connect with people.
Talk to everyone about your business. Word of Mouth referrals are one of the best, no cost ways to market your business. You never know when you might be talking to a potential customer, partner or supplier, or who they might refer you to.
When you’re bootstrapping you don’t spend money until you’ve made money. Your sole focus must be on generating income and spending your time on revenue-generating activities. Supporting activities, such as admin or accounts can be outsourced if necessary.
This is a low risk strategy because you’re not making any big investment until your concept is proven. As your business evolves you can develop new ideas without incurring a lot of costs. And you’ve got very little invested, so very little to lose.
Minimise your risks by working from home. Don’t take on the burden of paying the lease on an office – or hiring staff – until you’ve proven your business concepts works and you’re sure you have a revenue base to support yourself.
Fast To Market
When you’re starting out you are your own boss and you alone make the decisions. If you’re creating products you might self-publish, or sell directly through a website. Either way, you can shortcut the product creation process by doing everything yourself. You can go as fast or as slowly as you like because you’re not dependent on others.
And you can respond quickly to feedback from customers, and update your products or services to meet demand.
‘Prove and Perfect’ Your Business Model Before Making Major Investment
Being able to prove and perfect your concept is one of the biggest advantages to bootstrapping.
Successful bootstrapping is about planning the business in stages, starting small and testing out your business model as you go. Once you’ve determined that you’ve got a market of buying customers, you can evolve the business, and develop products and services that you know will sell. So many entrepreneurs make the mistake of creating complex products first, only to find they haven’t got customers willing to pay for them.
As a bootstrapper you’re relying on your wits, rather than your budget. You will quickly learn how to promote your business without spending money. Or find ways to barter services. If you are a virtual PA and need a new logo, who can you talk to that you design a logo for you, in exchange for some admin support?
If you’re in a business that requires stock or equipment, think creatively about how to get what you need. I recently spoke to someone who wanted to start her own web design business but didn’t have a laptop. Surely a non-starter? Not in this case. She found her first client at a networking meeting and asked for a laptop as payment. After that, she was able to take on other clients, and has never looked back.
When you’re bootstrapping a business, think about how you can set up your business so that you get paid a monthly retainer, or can bill for services before you provide them.
Choose a business you feel totally passionate about, with customers you care about and that plays to your strengths. You’ll find it easy to get creative.
Use social media to run contests, contribute to relevant groups and get your community engaged. The more fun and informative you make your social media interactions, the faster you’ll build your customer base.
Intellectually Stimulating and Challenging
Bootstrapping is hard work but very rewarding. You’ll use all your powers of creativity and intellect. And you’ll get huge personal satisfaction when you land your first client, or solve a challenge that’s been holding you back.
And the satisfaction that comes with creating something from nothing, and building a business that’s all yours is hard to describe.
So, what are you waiting for? Forget about funding, get bootstrapping and see where it leads you.
Have you successfully started a business from scratch? Do you have any bootstrapping tips to share?