Some of the most successful businesses around were started on a tight budget. The benefits of bootstrapping a business are many, some entrepreneurs do it by choice, others through necessity. Keeping expenses low can reduce financial stress and can improve the odds of success. It’s also a great way to avoid giving away equity in the business and as many will say it’s a good thing to keep a company lean and hungry.
Here is a list of several ideas and strategies for businesses to consider as they bootstrap their way to success.
1. Put off unnecessary expenses today. For example, while it is important in many instances to form a corporation for a new business, it probably does not need to be done upfront. Many people do things like that just so they are doing something, when there are more important things to focus on.
2. Focus on doing the things upfront that make your business money. Like the point above, sometimes people avoid the hard work or hire it out just to feel like they are progressing forward, when in fact they are prolonging the time it takes to become successful and increasing their odds of failure.
3. Use free resources. Your community might have free resources to help start-ups that you are not aware of. Look around and ask questions. Use free tools. For example, do you need to buy Photoshop or can you get by with Gimp? You can save thousands of dollars looking for free or open-source tools.
4. Do your own market research. It can be tempting to spend the money or hire the help for this important part of starting, but don’t do it. If you do the work you will know your situation better and save money at the same time.
5. Barter. You have skills and value in what you and your start-up can provide to others. If you need something done, try trading services or products instead of spending the money.
6. Offer equity to key players in return for dedication and a lower pay. This is a common way to build a team for a bootstrapped start-up.
7. Outsource for expertise when needed instead of hiring. The cost should be much lower and it offers flexibility in many ways.
8. Test small and adapt quick. Be very specific with your testing, don’t waste time or money. Once you get results, adapt to them and forge ahead. Many call it a pivot when a company is started for one thing and ends up doing something different to be successful. Be able to pivot if the market dictates that you need too.
9. Money loves speed. I’m not sure who said that, but I think I heard Dan Kennedy the marketing guru say it in a presentation. The faster you get started and get things done, the better your chance of success. Be fast at EVERYTHING and your bootstrapped start-up has a better chance of survival.
10. Manage your own PR. If you are reading this, I’m guessing you are a marketer or want to be one. Learn about public relations, press releases, social communications and marketing. You can have a huge impact if you do these things right and you don’t have to pay for a firms expertise.
11. Less is more. Become a minimalist in everything that is not directly related to the product or service provided. Spartan office space can reduce distractions and keep you hungry for a better future. My office has no clutter and it helps reduce the opportunity to be distracted.
12. Buy used and relentlessly try to reduce costs. You can find many things you will need to run your business used from technology to office furniture. Look on Ebay or Craigslist. If you have costs in your product, don’t let your feelings get in the way of buying right. It is in your best interest to be the best buyer you can be for your company. The salesperson might be your friend, but they are not paying your bills. Keep an eye on your budget and credit card statements as well. Lots of auto-billed mistakes and continuity charges occur that should not.
13. Be honest and craft a great story. We live in a world of transparency, if you try to fake it til you make it, you will bring unwanted stress and potentially repel some who might otherwise be glad to work with or for you. Everyone loves a great story and if you can write your own in a compelling “underdog” way, you can draw others to you who will help you and support you. People love success stories and you can be one.
14. Work harder and smarter. Think you work hard? If you are anything like most people, you have no idea. If you will dedicate yourself to actually WORKING while you say you are, you will get farther ahead, save money that you would not have to otherwise pay someone and make money sooner. And, don’t be afraid to put in longer hours. Turn off personal, non-business social media, turn off the tv, keep working. You are not missing anything. Working smarter is about being efficient and smart in what you do and how you do it.