If you are thinking about starting your own small business, or have already started your business, but maybe find the going tough, then this and the other articles in this series are for you. But before you start reading the other articles you need to be familiar with the term “bootstrapping”, to better appreciate the implications of the rest of this series.
Bootstrapping a small business means to start your business without external financial help or capital investment. You fund your business with money you earn and then reinvest into your business to grow. The average amount of money you would need to start a bootstrapped business is around $5,000 or £3,000, but often you can start a business with no money too. This assumes you already have a computer, internet connection and found room for a desk or use the kitchen table.
So here it goes, ten rules of bootstrapping your small business start-up:
- Money – Only spend money you have earned, if you want to do something and don’t have the cash, think of other ways, think: “How can I do this without money?” Google your question, it will give you a start in finding a solution. Bootstrappers make money, they don’t spend it.
- Niche – Start your business in a niche, provide the best personal service ever and use mouth-to-mouth advertising to grow your business slowly. Be happy with small orders, don’t over-stretch your businesses resources.
- Overheads – High overhead costs is a business killer, keep your cost down, work from home, share resources like work-shops & offices, out-source from day one. Don’t spend money on marketing, use the internet and do it yourself for free.
- Time – Realize that time is your most precious commodity, don’t waste it. Do things you are good at, passionate about and most of all bring you closer to your business goal. Don’t spend your time on setting up computer servers, if you are trying to sell flowers, not only are you probably bad at it, will take you much longer than it should, but it is a waste of time.
- Outsource – Virtual Assistants are professionals and like you often run a small business, timesharing their abilities is cost-effective and will yield professional results – making you and your business look good. Don’t employ if you can not utilize the employees 100%.
- Great Employees – if you have to employ find people who share your values, are happy to bootstrap and understand what it means for you to employ them. If all they ask is how high is my pay or how much holiday do I get – send them packing.
- Cash-Flow – is all about understanding your situation and getting suppliers who will give you great payment terms. Making sure you get paid on-time and keeping your money for as long as you can without damaging your business.
- Nothing To Lose – If you don’t spend much in your business and it fails you have nothing to lose – you can start again. Your competitor with thousands invested and maybe loans, etc does not have this luxury, they have something to lose. It gives you the strategic edge, do things differently, be disruptive, love to be the underdog.
- Underdog – with Attitude & Passion – show you like what you do, be knowledgeable, build relationships & business community – people will come to you for advice and eventually for your services or products.
- Focus – Continuously assess if your business is delivering your business goal. Every decision you make should be focused on delivering your business goal, without fail. Lose focus – lose your business.
Seth Godin, a uber-blogger and book author of “The Bootstrapper’s Bible” once wrote:
“For me, a bootstrapper isn’t a particular demographic or even a certain financial situation. Instead, it’s a state of mind.”
No matter how successful you will become, bootstrapping should be your companion. Remember how you’ve got to where you are, why change it? You may start your business in a recession, the recession will end one day, but your recession busting business model should not – Bootstrapping, it’s a state on mind!
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