This applies to your startup as well. Bootstrapping your business means you grow your business without the backing from investors and having little or no starting capital. That means relying on your personal savings and income to work and expand. It's not easy, but it's incredibly rewarding.
Entrepreneurs who are self-made, the ones that bootstrapped their way to success - are a rare breed.
“Bootstrapping is the minimalistic business culture approach to starting a company, which is characterized by extreme sparseness and simplicity. It usually refers to the starting of a self-sustaining process that is supposed to proceed without external input.” (Wikipedia Definition)
Choose a good co-founder
When choosing a good co-founder make sure their skills complement yours. If you are a product expert, you may need a business development or sales leader to bring your vision to market. If one of the co-founders is in charge of the management and product development, for the perfect balance, the other co-founder needs to be in charge of sales and marketing.
Trust is an essential part of a successful co-founder relationship. In a 2015 study of Inc. CEOs, 68% said their founding partner team remains committed to their startup. Interestingly, 43% of respondents said they started their business with a close friend. You need to know that the other person is as committed to your business growth and success as you are. It takes great dedication, sound work ethics, and pure single-mindedness to achieve success this way.
If possible, it is best to work with people you have known for a while or have worked with before.
Having the right advisor
Even if you and your co-founder have different skill sets, you're unlikely to know everything you need to know about running a business. The ideal advisor complements your strengths and compensates for your weaknesses. Advisors can help your startup grow, but there are downsides. Most advisors will want equity in your business in exchange for their help and advice. Many startup founders value the connection their advisors have to introduce them to professional services (like good connections or lawyers), but they should provide long-term guidance and help make strategic decisions.
In the early stages of your business, you may be juggling multiple roles. From developing a company strategy to planning product development and building an MVP or prototype, it all starts with you and your co-founders.
You may reach a point where your startup needs more team members, but you don’t have the finances or stability to hire anyone full-time. During this growth stage it’s important to know when to start outsourcing. Hiring an entire team too early can lead to negative cash flow. Fortunately, there are countless ways to get help for your startup online.
Popular freelance sites like Upwork, Freelancer, Fiverr, and more allow you to connect with freelancers around the world.
Keep an eye on your cash daily
When you start, you need to stay lean. The term "Lean Startup" was created by Eric Ries. That means you're creating a fast-growing yet data-responsive startup.
It also means you should always spend on the aspect of the business where you know you have a return coming in due time and that translates directly to happy customers in the long term.
Instead of luxurious office space, choose something more functional. Saving money on simple things adds up over time. In the absence of external funding, this is crucial.
When you’re reinvesting most of your profit, you don’t have money to pay yourself. It will take you years to grow your business to the point where you can pay yourself a decent salary. If you're lucky, after a few years you'll continue to grow and reach a multi-million dollar valuation. 75% of startup founders earn less than $75,000 a year. Even entrepreneurs who have started 6 or more businesses still earn less than $80,000 a year.
Build your brand - Share your story
This is very important for growing your business, especially for building user trust from the very beginning.
In today's crowded market, a strong brand is worth its weight in gold. Your brand sets you apart. It attracts new users and draws attention from the competition. Your brand is a critical factor for B2B decision makers.
Use content marketing tactics to attract users
Content marketing is one of the most effective ways to reach new customers. 70% of consumers believe that brands that create original content want to build relationships.
You can either produce your own content or turn to bloggers and other content creators. One of the most effective content marketing tools a startup can use is to create an explainer video. This is a video that describes in 30-60 seconds how your product works and what the key benefits are. Of course, blogging is not going out of style either. Whatever tactics you choose for your content marketing strategy, make sure you focus on what your users want. Create content that answers their questions and objections.
Bootstrapping companies must constantly look for ways to improve their processes, even without hindsight or millions of dollars at hand.
Bootstrappers may rely on sweat equity, customer funding, personal debt, or personal savings to provide initial capital. A bootstrapping startup is hard work. But you do not need a lot of money to bootstrap a startup. Some of the most successful companies in the world started with less than $10,000. Hewlett-Packard was founded with just $538 in a garage in Palo Alto, California!
You need to find a compatible co-founder with skills that complement your own. It's always a good idea to get advice from experienced professionals, but it's not cheap. You will have to give up some equity. You'll also need to learn when you can do tasks yourself and when it's time to outsource them. Bootstrappers may face cash flow issues and high levels of personal stress.
And while all this is happening, you'll need to maintain a strong brand presence and keep a close eye on expenses.
Bootstrappers, you rock!