If you’re an entrepreneur or new business owner, you’re probably familiar with the term bootstrapping. To bootstrap is to self-start your business with little money, and without investment from VC firms or taking on debt to fund your business’s expansion. Bootstrapping means only using your own money and resources to start your business, with the hope that it will gain traction and start generating revenue so it can be reinvested back into the business.
Bootstrapping is about stretching your personal resources to make it work, and making decisions along the way that are cost-saving and efficient. This doesn’t just apply to financial matters- it can be applied across different functions of your business, too. To ensure you are stretching your money as far as it will go while making the best decisions for your startup, consider using due diligence services to help guide you.
Bootstrap marketing efforts can include using email and social media marketing to spread awareness, surveying new and potential customers, and joining local organizations to engage with your business’s community. It can also consist of creating personalized experiences for customers to promote word of mouth marketing (instead of ad spend)–or using marketing service providers who offer free tools, resources, and plans for users who are just starting out and only need the bare minimum.
Another common way to bootstrap your business is to spend sparingly on operational costs. Opting to work remotely and from home offices instead of buying or leasing office space is a great way to save cash. Also, negotiating payment deals with vendors and paying suppliers who offer incentives for early payment first is an effective bootstrapping strategy. Insisting immediate payment from customers and following up on invoices is also a great way to quickly get cash invested back into your business.
For some, maintaining the simplicity of bootstrapping and investing all generated revenue back into the company can pay off–brands like Patagonia, Craigslist, GoPro and SPANX are a few examples of companies that found success from bootstrapping.
Overall, it’s a viable option for business owners who are looking to grow and manage their business without relying on outside investment and resources. Check out Fundera’s infographic below to learn more tips for successfully bootstrapping your business:
