Bootstrapping 101 Resources
Bootstrapping is a situation in which an entrepreneur starts a company with little capital. An individual is said to be bootstrapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.
12 Ways to Maximize Bootstrapping
- Market Research: Do low cost market research to know the effectiveness of your product: Ask friends and family, random surveys, specialty groups that would use your product, ask big box stores /would be potential partners what they are looking for. For example, If you want to launch a consumer mobile app, first just send out surveys or ask people in parking lots directly how likely they are to spend for something that does X.
- Have an advisory team: Find mentors(those with life and business experience) and advisors (those with similar business experience) on your team to ensure that you are not re-inventing the wheel. Advisors in your business area, finance, marketing, etc are great.
- Revenue: Know how you plan to make money. There are typical ways your business can make money and there are unconventional ways which others may not have tapped or explored. The key to ensuring your business is an investable business is showing that you have a clear map of how to make money and know how much money you are capable of making. Potential investors will be much more interested in investing in your business if you show traction. Traction usually equates to “some” paying customers (i.e. revenue). If you have revenues you’ll also be more likely to get a better offer from the potential investor.
- Re-evaluate if you do need money: you may think you need money for something, when there are ways to do it for free, barter with someone else, etc to do it for less cost
- Derek Sivers - Start Now. No funding needed
- Partnerships: A business is like a living organism. If you can’t take care of it, it will not grow to its full potential or will die. Studies show that proper partnerships increase the success percentage of a business. If you lack a certain skill, it may be worth bringing in a partner, co-founder or team members to help make it happen.
- Full time or part time: Starting a business part-time can allow you to test the concept and self-fund the initial operations. At a certain point, you will have to make the decision to go full time into your business. Before you make the leap, you need to assess your situation as well as ensure that your business has reached a certain maturity level.
- Raising money: There are different ways to raise money. Crowdfunding, Family and friends, loans, or giving up some equity for some of the company. It will vary based on your situation and business type.
- Be an MVP: It is essential to get a Minimal Viable Product first before spending money on a number of other things. This allows you to test, rethink, pivot and cheaply get a product that is more likely to be successful rather than spend funds on creating a product and marketing it, only to find it fail. Every business will fail often throughout its lifetime. The key is to fail quickly and cheaply so that it doesn’t impact your ability to get back up and create the “it” product. Read “Lean Startup”.
- Budget: Failing to plan is planning to fail. You need to budget to know where your resources are being spent, both in time and money. Cashflow is King. Prepare a budget upfront and watch it carefully. Even if you’re getting customers, there may still be 30, 60 or 90-day delays for getting payment.
- Be sure to try to reduce your personal expenses/cost of living before you start your business. This will allow you to better budget your financial resources and extend the time you have to create revenues and profit.
- When considering business ideas, start with the one that potentially has the lower cost structure and/or allows for getting paying customers in a relatively short period of time.
- Determine how you will create income/revenue while growing your business: Work part-time and keep your full-time job; List your place or a room on Airbnb; Become a Uber/Lyft driver.
Bootstrap with Atlanta’s Entrepreneurship/Innovation Center hubs
Innovation Centers/Co-working Spaces/Entrepreneurship Hub Map
Atlanta Tech Village
Industrious Ponce City Market
- TechSquare Labs
Flatiron/Microsoft Innovation Center
The Gathering Spot