Before a startup receives any form of an investment, it has to learn how to bootstrap. So what exactly is bootstrapping? Bootstrapping is running a business without any outside investment or capital. This means that business survives primarily on its earning and whatever money the founders may have. Many people like to romanticize the concept of bootstrapping, but it is definitely harder than what most people think it is. If you need to
walk down this path, here are some tips to help you:
Build a solid business model
Many founders start businesses that hemorrhage money and are only profitable years after their creation. Today this is common practice but you don't have this luxury when you are bootstrapping. You need to build a solid business that generates a decent amount of profit to keep the lights on. Anything less will result in failure. On the bright side, if you are able to get your business highly profitable, you can scale up from there.
Keep your expenses low
When you are bootstrapping, keeping your expenses low is critical. Depending on your circumstances, keeping costs low could be either easy or a challenge. One way to keep costs low is to leverage open source products. There are tons of open source products that are free to use. Everything from basic office suites (fully compatible with Microsoft Office) to project management software can easily be found. Additionally, learning how to think outside the box is a great asset when it comes to keeping things cheap. Many startups start in the homes of their founders and even Netflix’s first office was in the conference room of a hotel. Private jets and lavish parties may work for other companies, but for a bootstrapped business, it could be suicide.
Get help and be smart
Getting help can be many things. It could be having a really good team, a co-founder, or even just having an advisor to help you navigate your journey. Sometimes when founders try to bootstrap their business, they tend to do everything on their own. In some circumstances, it helps to keep costs low, but in others, it can be a costly mistake. Outsource work wisely. The last thing you need is to hire expensive pros to fix a problem you created trying to do everything on your own.
Happy bootstrapping!
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