Let’s face it: there are many tutorials online that can teach you how to start a business. The tutorials are endless, but how many cover bootstrapping a business?
Read them and you can learn a thing or two about running your business. Heck, you might even come up with a life-changing product that will work magic for your customers.
But if you dream of starting a debt-free empire, if you want to know how to bootstrap a business that wins you raving customers without chaining you to investors, you need something more.
You need proven tips that will help you start and grow your business without worrying about money. These are secrets that many entrepreneurs pay boatloads of money to learn, but, today, it won’t cost you a dime.
So sit back, grab some coffee and let’s dive in.
THE #1 STRATEGY To AVOID LIKE THE PLAGUE WHEN Bootstrapping a business
If we’re brutally honest, a lot of the time more money can seem like the perfect solution to a host of problems.
We think to ourselves, if I just had more money, I would be able to invest more in my business and crank up sales. But let’s be real: getting a big chunk of cash too early in the game can quickly kill your fiscal discipline and remove your freedom.
No doubt, we’ve seen businesses powered by other people’s money reaching dizzying heights. And for some industries, this process is a must.
But for the majority of entrepreneurs, raising money early is putting the cart before the horse. Needing an “experienced team” or “advanced technology” may be the very thing that pushes an entrepreneur to go knocking on a VC’s door seeking funding his business isn’t ready to handle.
Hours that could have been devoted to running the business are spent building out the perfect business plan to shop around to investors.
Entrepreneurs think they are working hard by fundraising - meanwhile, they are robbing themselves of an opportunity to build the stamina to hustle effectively. They are robbing their product of a chance to be refined efficiently. And ultimately, they are robbing their customers of a solution that’s been carefully thought through.
If you’re just starting out with your business and are looking to grow your own empire, please, for the love of your future, do not seek out investors early. You have many credible alternatives. Check them out below.
TIP #1: START SMALL, QUICKLY
A lot can be said about starting small, but if there is one major takeaway it’s this: to make quick wins, you need to get up and running quickly and to get up and running quickly, you need to replicate successful ideas well in a less crowded market.
Seth Godin once shared the perfect analogy for this. If a Disney movie earns less than $40 million dollars at the box office, the company will not be happy. But for an entrepreneur whose 1990 movie had sales over $100,000 – he would be delighted. $40 million is 400 times 100,000. The small business has so much potential to keep growing and growing till one day he becomes a giant too. But he has to start small.
As Seth put it when you’re starting out “find a niche, not a nation.”
TIP #2: FOLLOW THE MONEY
If you’ve ever watched a season of Shark Tank, you’ll often see a recurring theme.
An entrepreneur will come in with one idea that they pitch, but meanwhile, they will have an even bigger and better idea they are working on behind the scenes.
The strategy is simple. They are first focusing on a cash cow in their business.
Bootstrappers know that to gain credibility and confidence, they need to be making money early on even if its from a non-core product.
TIP #3: GO THE EXTRA MILE FOR THE CUSTOMER
High-value products are the name of the game in our informed economy. But that’s only part of the process.
Launching a new product not only calls for high quality; it also calls for great salesmanship. If customers had to choose between a big box store and a scrappy start-up offering the same product but with a great sales strategy (strong belief in the product, strong social message, great customer support), 9 out of 10 times they would go for the start-up just for the extra TLC.
It works every single time.
TIP #4: DITCH THE HIRING
If you’re thinking of hiring a marketing manager at $100k a year, don’t.
That’s a luxury waiting to burn holes in your wallet.
And there’s no reason for it.
In today’s economy, the market is flooded with contractors both domestically and internationally who can work remotely at a fraction of the cost. Your responsibility? Only to pay per play. No added frills.
TIP # 5: RETAIN YOUR FINANCIAL CONTROL
Being cheap gets a bad rap but when you’re bootstrapping a business, it will take you far. To be strategic, stay away from businesses that require capital such as big tech or anything equipment heavy.
Preserving financial control in your company no matter how tough the early days are is crucial. As you build value, you truly maximize your future income potential without selling out too soon. Once the company has grown and is better positioned in the market, if you do bring on investors, it will be a more mutually beneficial transaction.
BOTTOM LINE: DON’T TAKE THE EASY WAY OUT
Bootstrapping is not glamorous. In fact, it's tough.
Regardless, it works. Multiple entrepreneurs have built dominating empires on scrappy resources.
To them, raising money is not a badge of honor. Instead, they focus on minimizing expenses, keeping all their equity and preparing for success.
All without loans. All without a fancy team. All because they decided to focus on their business model, selling a high-quality product to their customers who were excited about their brand. This is the most direct path to bootstrapping a business without selling out. Start today.