Bootstrapping Your Small business you want to be your own boss, but since you don’t have the funds to start a business, you don’t push through with it. If there’s one thing you need to know about new ventures, it’s this: most usually lack the money when they start.
So how do you start your business without the funds? Bootstrapping. It’s the practice of starting a business with limited or no funds. This usually means you finance the new business using your personal savings, or with financial help from friends or family.
During this time, you should expect a bit of difficulty with your start-up’s cash flow. To help keep it afloat, here are a few tips on bootstrapping your small business.
Start a virtual office
One significant expense that start-ups usually deal with is overhead costs. You can circumvent this by working from your apartment, garage, or any other personal space where you won’t have to spend extra. If you have employees, you can set up a virtual office, which allows them to work from home just like you.
Having a virtual office reduces your costs; since you work from home, there’s no need to spend more on office rental, electricity, and petrol. This also allows you to hire skilled employees from other corners of the globe at a fraction of the price.
Use free tools for daily tasks
There are plenty of free tools and platforms you can sign up for or download, all of which can help you reduce upkeep and be more productive. Here are a few you can try out:
You don’t even have to look beyond the familiar–Google offers a range of free tools like Gmail, Docs, Calendar, DocuSign, Drive, HelloFax, Pixlr Editor, Hangouts, and many more.
Do it yourself
Another way to reduce your costs is to perform certain business processes yourself, especially if you’re just starting out. Thanks to the internet, for instance, you can do your own market research (e.g. SWOT analysis, target market, demographics), public relations (through contact websites like Reporter Connection, ProfNet, HARO, and SourceBottle to get free media coverage), and website setup and creation.
If you’re having difficulty with your DIY projects, however, think about asking experts for help. You don’t have to pay one, though–just sign up in the corresponding online forum and search for answered questions regarding your concern. Otherwise, start your own thread and ask away.
Signing up interns is a viable option, but take note that there are a number of legal concerns you have to consider if you’re to take the unpaid work route. For example, your start-up can serve as vocational placement, but you still need to meet a number of criteria. If you’re able to meet the legal requirements, however, hiring interns aboard is cost-effective for bootstrapped businesses.
Get an industrial partner
If you’re bootstrapping your business, then you’re probably low on resources and your expertise might be limited to what your start-up’s core competencies. But unless you have the funds to hire people to handle other aspects of your business, it’s likely that you’re on your own.
Unfortunately, you won’t be able to hire others until your start-up starts earning, and that’s not going to happen until you have some help. One way out of this chicken-and-egg dilemma is to offer investors equity in your business, in exchange for their expertise.
For instance, rather than looking for angel investors to inject money in your app development business, you can instead search for a specialist who will help you in marketing, who you can offer equity in your business in exchange for their expertise.
Meet the requirements
Just because you’re running a new, bootstrapped start-up from your living room, it doesn’t mean you forgo the legal business prerequisites. In fact, you should make it a point to complete all the necessary government permits, licenses, approvals, guidelines, and various other requirements early on. This will keep you from getting swamped with tasks, especially once your business takes off.
To find out what the government requires for your business, visit the Australian Business Licence and Information Service website and perform a search by inputting your business type and location, then press “Next”.
Barter with others
Exchanging help and services with others lets you carry out tasks without having to use up your limited resources. For example, if you just established a graphic design business, you can offer to design an IT start-up’s logo in exchange for their technical support. Bartering might even result in referrals and positive word-of-mouth advertising.
Take advantage of social media
Want to make your small business more visible online without having to spend a substantial amount of your limited resources? Simple: create a social media page/account for your start- up. Social media comes with a number of benefits, including the following:
Drive more traffic to your website.
Generate sales leads.
Provide better insight into your customers.
Lower your marketing expenses.
Best of all, social media is free.
Do business part-time
Whatever you do, don’t quit your day job, even when your business is beginning to earn money. Your start-up may already be turning a profit, but until it can pay you a salary equivalent to your regular job, you should stay and do your business part-time.