You have a brilliant startup idea, and you just know it’s going to take off. There’s just one minor hiccup: you’ve got very little capital to get the darn thing off the ground. This isn’t a pretty scenario, but it’s the common one. A lot of successful companies were created from very little, and it wasn’t sheer luck that got them where they are today.
The challenge here is that many entrepreneurs—especially first timers—tend to make bootstrapping sound sexy. It’s hip to bootstrap! Yup, it’s easy to gloss over, or even fantasize, about the daily grind of starting your own business, making tough decisions, wondering how the next bill is going to get paid.
Here’s the ugly truth: you need money to grow. And if you don’t have money, it’s over. There’s not too much more to it.
So, bootstrapping – yes, it can be done, that is, if you handle your limited funds the smart way. This means thinking about every single dollar, keeping your expenses barebones and making sacrifices. You spend only when you absolutely must. It’s all about the cash, and staying on top of your critical cash flow cycle to keep things humming.
Being cheap ain’t easy. It takes strategy, planning, discipline. Are you up for the challenge? Here’s a few tips to keep in mind as you get started.
Hey, you! You’re it. Well, you’re not necessarily it, as in alone, but you are the first in line when it comes to getting shit done. This means the fun things, the whiteboarding, the dreaming, interacting with customers—and paying the bills, being your own tech support buddy and Googling to find the answers. To Everything.
Think through every dollar. Goodbye, frivolous spending! It’s up to you to justify where every single penny is going.
Get comfortable with having no money. How do you feel about not getting paid (at all?) Or, just getting paid to see you through the super basics, like rent and grocery runs? You may be founder and CEO, but get cozy with the idea of having the smallest piece of the pie when it comes to payroll time.
Ask for favors. This is part of networking, of course. Be prepared to ask for help. You know, free software, introductions, help fixing this or that; cheap marketing hacks, tradesies.
Skip the corner office. You’ll get there one day, but your bootstrapping era isn’t the time to sign a fancy (expensive!) lease. With laptops, free WiFi and co-working spaces on every corner, there’s no excuses for embracing a nomadic work style.
Think hard before you hire. If you must hire, freelancers are the way to go in the beginning. A lot of new founders are too quick to hire. They wind up hiring the wrong people, ruining relationships and losing a lot of money while they’re at it. Don’t do this.
Work with people who pay you on time. Yes, you need customers. Yes, you need to get paid. If customers aren’t paying you on time, keep looking. There are ones out there who will.
Do you have tips for bootstrapping? What helped you get through this tough startup stage? Share it with the Girls in Tech community in the comments!