Do you know how to bootstrap your startup business?
Every entrepreneur in the startup world dreams about the possibility to just go and build a company without having to worry about the financial aspects of the business.
Ask any startup founder and you will soon understand that building a business requires companies to be inventive and smart in attracting the necessary capital.
Some entrepreneurs go for crowdfunding or angels, while others choose venture capital companies or bank loans.
Whatever funding option you may choose, most of them come with different rules. Usually, every option requires times, energy and patience into attracting the right capital and most startup founders need to give something back, from equity to some degree of involvement into the company’s evolution.
Nowadays, most entrepreneurs choose between multiple sources of funding and this is a normal thing for most startup founders. But this doesn’t mean that most people don’t still dream about the possibility of going alone without having to worry about asking for external financial support, which they will have to return at some moment.
Is it possible for a company to go bootstrapping and avoid external financial support?
We cannot give a definitive answer to that, but we can tell you that at least in the initial stage of the business, the entrepreneur should go bootstrapping in order to maintain control and avoid any external interference.
These are the main steps an entrepreneur can follow in order to bootstrap a startup business.
5 Steps to Bootstrap Your Startup Company
1. Save, save and save again money before you start
When you start developing your new company, you need to make sure that you have money to cover a certain period of time.
To do this, you need to save as much as possible before you start your entrepreneurship journey. In addition, we recommend that you don’t give up your 9-to-5 job yet and keep that income to help your new business.
Also, draw up a strategy for the period of time you want to go without external support and save the necessary money for that period of time.
The initial money will prove quite useful in the first stage of your business and you can have an idea of the funds you’ll require to further grow your company.
2. Are you a Jack of all trades? You better be.
Bootstrapping your business requires dedication, commitment and a lot of work.
This means that in the beginning you’ll have to walk alone for some time to avoid paying wages you can’t afford. And of course, this also means that for better or worse you’ll have to do those jobs.
Now, we are not talking about highly specialized positions such as software development where you really need a professional to build your application or software product.
But there are less specialized positions which you can occupy for a period of time to save as much bucks as possible. For example, you can take care of sales, customer care, inventory and basic accounting.
Are you better at PR and attracting investors and partners? Than do that part. Or maybe you are a marketing ninja and social media guru? Well, take care of those areas of the business.
You got our point. Bootstrapping and startup life is all about going well over your head and do more than you would do in a normal 9-to-5 job.
3. Hire passionate people on the rise
You need to find the best professionals possible for the key positions in the company.
Is this coming in contrast to our previous advice?
No, not really. From our experience, you cannot find cheap work for the most important positions in the company. Would you like to have a less perfect application or a less than perfect website for your customers?
No, you don’t want that so look for the best developer in town and don’t be cheap. You may save some money with a less experienced programmer, but in the long term you’ll have to pay more to fix what is broken from the start.
There is another thing you can do here to save some more money.
You can look for great professionals that are on the rise and are really looking to change their status quo.
Maybe they want to be managers and lead a team, maybe they are sick of being micro-managed or they just need a change. Or maybe, just maybe, they are simply interested in your project and want to be part of the adventure.
4. Watch your expenses like a hawk
It is quite obvious that watching your expenses (and cutting unnecessary costs) plays an important role in your bootstrapping efforts.
More than this, you need to change your mind frame and start negotiating everything, from the office space to all the hardware required in the beginning. Do you really need a big fancy laser printer or a smaller one should do the trick?
So, watch your expenses and look for the best deal in the market for whatever you need to purchase.
And don’t forget that since you are building a business, you are also a provider of products or services.
So, what about bartering?
Do you think you’re the only one who is bootstrapping? Can you obtain your raw materials or other products by exchanging your own services?
You never know until you try, so look for companies that are willing to respond to your needs by accepting your own products in return.
In the end, you never know what great people may come your way and the unexpected partnerships that may result from a simple bartering deal.
5. Let your passion shine through
Building a company is not easy, especially when you lack financial support and you take the road to bootstrapping your business.
Even with VCs and investors in your pocket, running a new enterprise is not an easy thing to do. There will always be struggles and unexpected challenges on the way to success.
It’s not easy to find the best solution, hire the best people, attract investors, sell your product and create a brand to last. And it is hard work to bootstrap your startup.
However, by putting passion in your business, you won’t feel like working too much or losing time and this is what you need to go on. The fuel that will drive you forward will always be your own passion and enthusiasm in building a new enterprise.
As our tech incubator has been designed to offer financial support, technical and marketing expertise, plus great mentoring and networking options, we remain aware of the multiple challenges startups need to tackle, including capital raising.
Though we understand startups need financial support if they want to grow fast and pitching to investors is a normal part of every company’s evolution, we recommend young companies to bootstrap in the initial phase and look for an organic type of growth.
MStarter is a tech incubator that can provide incubated startups with valuable services that can prove beneficial for their growth, from tech, marketing and business support to direct funding and fund-raising options.