For most of us, the concept of launching into a business venture with little or no capital, and trusting to our instincts, and the ability to work miracles on little or no budget, sounds like madness. To the entrepreneur, however, it sounds perfectly reasonable.
In fact, every day, around the world, millions of entrepreneurs decide to go for it – even though they don’t have multimillion dollar backers.
If you can’t find funding for your business, or if you’d rather go it alone, and build your company from the ground up the hard way (sounds crazy again, but many people do) then you’re going to have to learn to bootstrap!
What Is Bootstrapping?
Most seasoned entrepreneurs out there will know exactly what the term bootstrapping means. It’s the process of building a business from the ground up, with no outside funding.
The term comes from an old story about Baron Munchausen, who used his own bootstraps to pull himself up – similar to the self sufficient nature of the bootstrapping entrepreneur.
Why Is Bootstrapping a Good Idea?
When you first start dreaming of becoming an entrepreneur, chances are you are imagining hordes of financiers battering down your door to offer you money. That’s unlikely to happen, but even if it did, it would not come without a price.
You see, when you accept funding, whether it’s from an angel investor, a venture capital firm or a traditional bank, they’re going to want to have some say on how things are done. That means less autonomy for you, the entrepreneur, to build the business you’ve been dreaming about.
With all that money at your disposal, you’re also unlikely to ever learn the true innovation, invention and budgeting that a real entrepreneur needs to understand in order to keep a business going when times are tough. Make no mistake, it’s a fact of life, and of business, that sometime, things will go bad. If you bootstrapped your business into being, rather than accepting funding from the outset, you will already have the skills to navigate tough times, and come out looking great!
Bootstrapping Impresses Investors
All ideals and romanticism aside, however, chances are, at some point, your business will need funding. If you, the entrepreneur, can stand in front of potential investors, and show them exactly how you built your business from the ground up, with no outside aid, you’re far more likely to impress them than if you’d simply used other people’s money to create your company.
Going to a group of potential investors having bootstrapped your business into success only proves to them that you have what it takes to be an entrepreneur, and that you can do the same with their money. Nothing is more likely to make them take a risk than that!
How to Bootstrap
If you can’t find funding for your business, or don’t want any, then you’re probably going to need to bootstrap. Here’s how:
- Start small. We’d all like to take on big contracts, open fancy stores and drive a luxury car. However, when you bootstrap, you have to start small, and work your way up. Choose manageable first goals, and achieve them. Then use those profits to fund the next, bigger project, and so on, until you reach your long term goal.
- Learn to cut costs. Entrepreneurs who bootstrap their businesses are the masters of cheap. They find cheaper ways to do anything, whether it’s taking the subway to a meeting, or hiring equipment rather than buying it. Bottom line? There’s a cheaper way to do anything. Find it.
- Get creative. Bootstrapping successfully requires you to find creative ways to make the money you need to start your business. Sell something; offer a separate service on the side to make extra money, freelance for a while in parallel to your business, or pawn something if you have to. When entrepreneurs bootstrap, anything goes!
- Understand that when it comes to bootstrapping, determination is everything. It’s not easy. Often it’s not fun. But if you keep at it, there’s no chance you won’t make something of it.
Famous Bootstrappers
Of course, you may be feeling a little down in the dumps about having to bootstrap. If other entrepreneurs can get funding, why can’t you? Don’t be. There have been plenty of people out there who have made their fortunes using just such a strategy.
One of those is the famous entrepreneur and author, Guy Kawasaki. Then there is Bill Gates, who started Microsoft with very little money, and of course, the boys at Google. In fact, some of the world’s best known brands, and most successful companies, were founded with little more than a good idea, and the will to succeed.
All the more proof that you don’t need lots of money to be an entrepreneur – you just have to be willing to take that first step into the unknown.
As a successful, under-30 serial entrepreneur, Gary Whitehill’s game-changing endeavors have been featured on television and in magazines and newspapers across the nation. Read more about Gary here.
