Bootstrapping is a term that has long been applied to entrepreneurs and the entrepreneurial process. According to Dictionary.com, when used as a verb, bootstrapping means to “help oneself without the aid of others.” In the business world, it’s often a reference to the financial end of starting up a business with very little capital, little or no investment, and a lot of grit.
Lack of access to capital is not an insurmountable obstacle if you have a good business idea. Starting a business with little or no money requires hard work, patience and resourcefulness, but it’s certainly possible. I should know, because my partner and I launched our company with just a measly $1,000. It was far from easy, but within less than a year we reached 10,000 members and started turning a profit. Now, we serve over a million customers.
I learned a few things in the process of bootstrapping our business. What we lacked in money, we gained in entrepreneurial experience. Here are some tips for launching your business idea with little or no cash.
Find talented people to share in the dream
There will be initial expenses to starting and building your business, and if you have no capital, you’re going to have to find a way to “pay” for these expenses. While you might not have cold, hard cash, you have something that could be considered more valuable: the potential for return-on-investment (ROI).
When we were first building our company, we found a very talented developer who was willing to be paid on an IOU basis. He saw the practicality and potential of what we were creating and agreed to offer his services for payment down the road. He took a big risk, and it paid off.
If your business idea holds water, it’s likely that you’ll be able to find other entrepreneurial folks who will be willing to offer their services for free or at a discounted rate with the promise of a larger paycheck later. Look for freelancers on sites like UpWork, Fiver, Freelancer.com and LinkedIn. Try to find someone with an interest in your industry. It might take some time, but if you find the right person, you can utilize their skills now and compensate them later.
Don’t quit your day job… yet
In theory, there will come a time and place for giving up your current steady income stream in order to pursue your new business full-time. But don’t do so too early. A steady job—full or part-time, remote or in-office—provides you some comfort and stability that will serve you well as you pursue your business idea. Bootstrapping a business takes a lot of time and energy—energy that shouldn’t be wasted on worrying about whether you can make rent.
Encourage word-of-mouth marketing
Create an easy, rewarding way for your customers to spread the word. A happy customer—even just one!—is a very, very valuable thing for your new business. But all that value can be squandered if that customer doesn’t have an easy and obvious way to support your business and share it with their friends and colleagues. This means creating a business and a product or service that customers want to tell their friends about. Exceed expectations when it comes to customer service, and offer a unique experience that no one else out there does. Encourage brand awareness to the point that your customers are so excited about your brand, they will do the marketing for you.
Don’t be afraid to redirect
When you’re passionate about your business idea, it can be easy to get tunnel vision. Be careful of the tendency to think that your way is the right way—and the only way. It’s important to know when to defend your position and when to give way to a different idea that might allow for more success.
This measured attitude is always important in business, but it becomes particularly valuable when you are trying to bootstrap. Be open to new directions. If your current trajectory isn’t showing promise, don’t be afraid to try a new product or service. One of my businesses started as a paid-only service for $30 per month. After not seeing the results we expected, we changed our pricing structure to include a new free option and a new $70-per-month premium option. Within the first month of implementing our new pricing strategy, our revenue and customer base tripled. Don’t be afraid to think outside of the box when it comes to enticing new customers.
Embrace the challenge
Aspiring entrepreneurs shouldn’t allow startup costs to deter them from launching their business. Starting a business doesn’t have to take thousands of dollars, especially if you’re launching a business online. In fact, starting your business under financial constraints will teach you skills that are likely to serve you well throughout your days as an entrepreneur.