What is Bootstrapping?
Simply put, bootstrapping is a situation where an entrepreneur starts a company or business with little capital.
Most of the time, these people depend only on personal finances or from the operating revenues of the company.
Bootstrappers, as they are called, rely on personal income and savings, sweat equity, lowest possible operating costs, fast inventory turnaround, and a cash-only approach selling. This business strategy is not a new concept; since most of today’s largest corporations began the same way.
Just like Coca-Cola, Dell Computers, Hewlett-Packard and Microsoft.
Why do some entrepreneurs choose to bootstrap?
Bootstrapping provides the business owner more freedom to focus on what they do best.
It allows him to experiment with his brand to see which works better with his audience. The pressure to get the product right the first time is lessened. It also gives the business owner more control. He gets to decide which resources to spend on, and find ways to increase his resources.
Bootscrappers become more innovative when it comes to solutions to problems they encounter along the way.
Since capital is limited, they tend to turn to imaginative ways to resolve issues and look for tools and resources to help them manage their business better.
But there’s also a downside to bootstrapping.
Since funds come out of your own pockets, the risk of running out of resources is always there. It also takes more time to build credibility for your product without an investment.
The lack of resources can also limit product development and marketing. Without the right network and the right strategy, it’s easy to end up in a lot of debt, or worse, you fail.
So how do you grow your business successfully through bootstrapping?
The internet has made it easier for entrepreneurs to get together and bounce off ideas before launching.
Luckily, there are entrepreneurs who have both failed and succeeded their startups and lived to tell the tale. They offer insights that will help lessen the risks of failure and tips on how to make it. Websites like Entrepreneur.com and communities like Reddit and Quora provide entrepreneurs with expert advice on how to run a business and strategies to help them grow faster.
In an article written by Jim Beach, David Beasley and Chris Hanks, Five Rules for Bootstrapping Success, they discuss how you can successfully start and run your business without external funding.
According to them, entrepreneurs must sacrifice their own vanity and do all things previously done by a large support team.
This means a lot of micromanagement, and in some cases, delegating tasks to your team. This lets you could focus on more pressing matters, like getting customers and promoting your product.
They also advise bootstrappers to reconsider the traditional business plan. The business owner starts small, and slowly builds sales while using their day job as a cushion and creating a sustainable, profitable business from day one.
What’s important is you get your sales up and move on to get more customers to support your business.
Check out these free tools and resources to get yours started:
The Bootstrapper’s Bible by Seth Godin – Everything you need to know about bootstrapping all in one place.
Startup Stash – A curated directory of resources and tools to help you build your start-up
Canva – Create better images with this free image editor
Medium – Everyone’s stories and ideas
Hemmingway App – Helps make your writing bold and clear
Google Trends – a new way of displaying trending searches
Hubspot Blog Topic Generator – Custom blog ideas
Sumome List Builder – collect email addresses with light box popover
Bootstrapping may not be the most glamorous way to start a business. What matters most is starting, and getting your dream business off the ground.
Want to get more tips on bootstrapping and getting a head start on your business idea?