5 Effective Ways You Can Bootstrap Your Business Successfully
You may have big dreams revolving around your start-up. From success to unmatched reputation, you want your start-up to enjoy all of that. But, what about the investments required to get your start-up going? After all, most start-ups do not have the luxury to get investors right off the bat. That is when the role of bootstrapping comes into play. Bootstrapping is the process of building a solid business without any backup from investors or a starting capital. That means you need to fund the money out of your pocket to fulfill all the dreams that you have regarding your start-up.
Image Source – moneycontrol.com
From Dell Computers to Microsoft Corporation, several successful companies had begun as a humble bootstrapped enterprise. Though it may sound difficult, you can build a successful start-up with bootstrapping. Here are the five major ways for successfully bootstrapping your business.
- Make the best use of a co-working space.
At times, start-up founders tend to focus on things that may not be important in the beginning. A fancy office space, for example, consumes a significant part of your investment. You could use the money for marketing or customer acquisition. When things are right, you can always go ahead and get the best office space for your company. But, it is better to make the best use of a co-working space when the budget is tight in the beginning.
Benefits of co-working space:
- Makes you a better decision-maker
- Provides a better networking opportunity
- Boosts creativity skills
- Offers greater flexibility and cost-efficiency
You can also take the example of Gary Vaynerchuk in this case. He used another office to start his online venture Vayner Media in 2009. He chose to use a co-working office space to get rid of the unnecessary overheads in the beginning. Fancy office space is cool. But, you should re-consider it if you want to bootstrap your business successfully.
- Try to be as thrifty as possible.
As mentioned before, start-ups do not have the luxury of indulgence. You can’t expect to get rich within a week or year of starting your own business. Accept the fact that your salary might be zero for the initial years of your business. 66% of start-up founders in Silicon Valley have a salary of less than $50,000. 75% earn less than $75,000. The savings may seem small at first. But, it is invaluable as compared to the expenditures like branding and marketing.
Four tips to save money in the early stages of your start-up:
- Use free versions of essential software such as Dropbox and Photoshop.
- Prepare the budget using free digital services such as Mint.
- Don’t invest in premium services.
- Go for lower prices while planning the logistics of your business.
While bootstrapping your start-up, make sure you focus only on the essentials at first. Make a note of the things or resources that your business can’t do without. Try to spend your funding on those items initially. Do not spend money on the things that will not provide you with a higher return on investment.
- Sell freelance or consulting services.
Let’s say you are an online essay helper. You want to start your own assignment writing business as well. So, you can sell your freelance writing services to fund your online business. Almost 35% of America’s current workforce consists of freelancers. According to experts, half of the American workforce is expected to turn to freelance as their main profession. Market your freelancing services well to earn enough funding for your own start-up.
Benefits of freelancing are:
- The immense flexibility of location and time
- Freedom to choose the right projects and clients
- Multi-faceted exposure to faster growth opportunities
- A chance to enhance your skills
Working full-time and building a start-up at the same time is nearly impossible. Also, you will have little time or freedom to do something of your own. Thus, freelancing is the best option for you to earn enough money to start your own company. Freelancing can also help you connect with valuable clients. So, you can even ask those clients to opt for the services at your start-up.
Avoid the complications of credit and debit cards.
According to Mark Cuban, an American entrepreneur, credit cards are the worst investment. It requires to be paid off every 30 days. It is better to stay out of it even if you can pay them off. Credit card debt has the potential to add up quickly at the end of every month. It may impact you negatively, thereby ruining your finances. You don’t want to invest your savings in paying off credit card debts instead of the essential resources for the start-up. Do you?
Four reasons your credit card debt is bad for your business:
- It is accompanied by double-digit interest rates.
- Even the minimum payments take years before being paid off.
- You can’t use it to purchase essential assets for your start-up.
- On the contrary, it may ruin your credit score forever.
Bootstrapping your business means you get to enjoy the complete ownership of your company. Also, you don’t have to raise capital from an external investor. So, it is better to remain as debt-free as possible. Credit card debt is like a black hole. You may need a separate investment to get yourself bailed out of all the debts.
- Keep track of all the expenses strictly
You may be surprised to know there are many entrepreneurs who manage their expenses loosely. Most of you may overlook certain small expenses when the money starts rolling in at the beginning. But, these small expenses can cause a problem down the line, especially if your business faces a financial crisis. Thus, every entrepreneur should be financially responsible. From marketing costs to office supplies, keep track of all the expenses strictly.
Here are four apps to help you track your start-up expenses:
- Suti expense
- Zoho Expense
Maintaining a good financial record is essential for the sound health of any bootstrapped start-up. The financial records can also help you visualise the long-term financial trends of your business. You can identify and handle the areas of unnecessary spending as well.
Building a successful business from scratch and without any external investors is the most satisfying feeling for entrepreneurs. Bootstrapped start-ups can lead to numerous growth opportunities only if you are confident and disciplined enough to fight the risks associated with bootstrapping. Implement these tips and work with full dedication to make it big in the world of entrepreneurship. Good Luck.
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