7 Effective Ways to Bootstrap your way back to Business

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To be successful in any business, an entrepreneur needs to use the available resources at his disposal, such as those that companies like Your Virtual Office London can provide, while limiting the borrowing of funds. Having 100% ownership of the business and not giving up an equity stake to an investor is on the wish list of every entrepreneur.

This may be accomplished with what is called bootstrapping. Once one becomes a bootstrapper, no one will ever be on your back all the time, asking what has been done or directing on how you should run your business.

Bootstrapping comes with a wide range of benefits to entrepreneurs. To begin with, the business won’t be indebted to any investor.

Secondly, you won’t be under any pressure to repay any form of a business loan to a financial institution. Many people who have fantastic business ideas have a borrowing mentality such that they believe one needs to have thousands of dollars as start-up capital which is an absolute misconception.

Bootstrapping means using the little that you have as start-up capital for the business like. When little profits are realized, you need to plow them back into the business. By doing so, the business would experience growth.

The million-dollar question with many entrepreneurs is “how can I learn the art of bootstrapping my business?” We got you covered. We are going to show you some tips that will help you.

What does it mean to Bootstrap a Business?
7 Effective Ways to Bootstrap your way back to Business
Other Amazing Ways to Bootstrap your Business
Companies That Succeeded With Bootstrapping
What is Bootstrapping in Business?
How do I Bootstrap my Business?
What Are Bootstrapping Strategies?
What Strategies Can an Entrepreneur Use to Save Money When Bootstrapping?
What is an Example of Bootstrapping?
Examples of Bootstrapping Business
What Are The Methods of Bootstrap Financing?
Examples of Bootstrapping Methods in Entrepreneurship
Bootstrapping Techniques For Startups
Successful Bootstrapped Startups
What is Bootstrap Used For Statistics?
What Are The Methods of Bootstrapping?
What Are Some Common Bootstrapping Strategies Used by Entrepreneurs?
How Does Bootstrapping Apply to Entrepreneurs?
Types of Bootstrapping Financing
Bootstrapping Business Ideas
7 Rules For Success in Bootstrapping a Business
Why do Startup Companies Need Bootstrapping?
How do I Bootstrap my Startup Without Funding?
What is The Bootstrap Process?

What does it mean to Bootstrap a Business?

Bootstrapping is building a company from the ground up with nothing but personal savings, and with luck, the cash coming in from the first sales. The term is also used as a noun: A bootstrap is a business an entrepreneur with little or no outside cash or other support launches.

The word bootstrapping has come to be used for a variety of other self-starting processes. It describes the creation of complex software programs in successive and interdependent stages. The term “booting up” for starting up a computer’s operating system may come from bootstrapping.

Bootstrapping has its origin in the early 19th century with the expression “pulling up by one’s own bootstraps.” Initially, it implied an obviously impossible feat. Later, it became a metaphor for achieving success with no outside assistance.

Bootstrapping is a tough way to go. It places all the financial risk on the entrepreneur. Extremely limited resources can inhibit growth, prevent promotion, and even undermine the quality and integrity of the product or service envisioned.

On the other hand, the entrepreneur is able to maintain total control over all decisions and the business itself. And all the energy goes into the product itself, not into pitching venture capitalists and other potential sources of capital investment.

Studies show that more than 80% of startup operations are funded by the founders’ personal finances. The median in start-up capital is about $10,000.

Having a viable business idea is one thing. But, actually getting out there and building a self-sustaining, self-funded business is an entirely different thing. You need true grit. Determination. Blood, sweat and tears don’t aptly describe what you’re in for. But, how do you go about doing it? How do you bootstrap your business?

1. Take action daily and don’t be afraid to make mistakes

Too many people face analysis paralysis. It’s easy to overthink things. Especially when you’re filled with fear and what-if scenarios. What if you leave your job and startup your own business? What happens if you fail and can’t pay the bills? What happens if you have to cower back to your life-sucking 9-to-5 job?

The cure to the fears that plague your mind? Take action. Guthery says that you shouldn’t be afraid to make mistakes. Power forward. Day after day. Even little gains can add up to big results over time. Try not to over-analyze things to death. Just put in the sweat equity. Don’t focus on the long term. Strive to hit daily short-term goals. That’s it.

2. Make sure you’re passionate about what you’re doing

Guthery developed a passion for his business along the way because he saw the benefits it had on his customers. He heard the feedback. The rave reviews. He knew that what he was doing was helping others. It helped them battle their demons and fix potentially lethal addictions. That’s where his passion was born.

He says that you have to be passionate about what you’re doing. Otherwise, you’ll easily throw in that proverbial towel. You’ll call it quits. Give up. Say, I’m done. I’ve had it. That’s it. Never again. But, if you’re passionate. And, I mean, deeply passionate. You won’t give up. There is no turning back. No retreat. No surrender. The only pathway is forward.

3. Don’t borrow money if you can avoid it

Guthery says that you should go it on your own. There’s nothing worse than owing people money. Especially friends and family that lend you capital to start your business. If you have to, max out your credit cards. But, don’t rely on others to give you the cash that you need.

Before even starting your business, you should be saving. Save up what you need and strategize on what it’s going to take to bootstrap your way to success. Whatever it is that you think you need, you’re going to need more. So don’t sugarcoat things. Take an honest look at what it’s going to take. Then pull out all stops to get there on your own.

4. Hit the phones and knock on doors

You quite literally have to hit the phones and knock on doors. Get used to people saying no. Get used to having the phone hung up on your face or the door slammed right in front of you. Get used to the rudeness and crass that you’re likely going to experience. But, for every 10 or 20 no’s, there’s going to be a yes. And that’s what you focus on.

Guthery built his business one phone call after the next. He figured out the ailments that Kratom could treat, and he approached everyone he could find to sell his product to. It didn’t happen overnight. It was years of grinding. And he says that you shouldn’t be afraid to do that. Especially on your own. And especially in the very beginning.

5. Surround yourself with driven and successful people

Joe Polish, one of the best business networkers in the world, is surrounded by people who are playing at the top of their game. Polish knows a thing or two about building up a powerful network of successful people. And Guthery feels the same way. You can’t expect to hang out with losers and make any progress.

People, especially those that are stuck in the status quo, will tend to want to see you fail. That’s just the honest truth. Don’t surround yourself with them. Find successful people. People who are playing at another level. People who know what it takes to go from zero to hero on your own. You should never aim to be the smartest person in the room.

6. Accept that you’ll wear many hats

In the beginning, you have to do it yourself. Everything. Don’t be afraid to do that. You’ll need to do the sales. And customer service. You’ll need to manage inventory. Deal with refunds. Handle manufacturing. Complaints. Partnership requests. Accounting. All of it.

Don’t be afraid to do that. Don’t ever think that you’re too good to do any of it. If you think that way, you’ll likely fail. You can’t play that card and expect to bootstrap your business. The alternative is pricey. Have a great mentor by your side, but go it alone. Do everything you have to do to get yourself to where you want to be.

7. Negotiate everything and never take things at face value

Don’t ever be afraid to negotiate. The truth is that everything can be negotiated. Everything. If you take things at face value, you’ll never realize just what you can shave off the price. Guthery says that he’s negotiated the price of nearly everything. From office space to cost per unit of raw ingredients. Literally everything.

The difference adds up. And when you’re bootstrapping, every extra dollar counts. You might not see it in the minute interaction that occurs from day to day, but it’s there. Keep careful track of your expenses no matter what. And especially ensure that you’re getting the best possible deal on whatever it is that you’re buying or signing up for.

Other Amazing Ways to Bootstrap your Business

Here is a vivid description of 25 business bootstrapping ideas you need to know.

1. Look for a Business That Needs Less Start-Up Capital

Starting up a world-class restaurant sounds like an awesome idea right? Many of us would obviously love to own one. However, such an investment needs a huge amount of capital injection. Thus, it is good to put it as a long term objective. If you have less capital, it is advisable to start up with a food truck and accumulate enough profits to start your restaurant.

2. Businesses That Generate Fast Cash

Since you do not have a large amount of capital to start up a large business, we would recommend that you use the little capital that you have and invest in a business that is market ready. Look for a business that generates immediate returns so you can put the profits back into the business. Doing so will allow you to accumulate the business funding you need to kickstart the large business.

3. Taste the Waters

One of the largest mistakes you can ever make as an entrepreneur is to quit your job believing that your business will be an immediate success overnight. To avoid disappointment, start your business idea as a part-time business and analyze the progress and later on dive into it.

4. Try Bartering

When starting up a business, it is wise to conserve your start-up capital as much as possible. This means that you can swap the products that you need with the products someone else needs. With this kind of exchange, though, make sure that the products you exchange are of equal value.

5. Cut Down Your Expenses

If you are planning to successfully bootstrap your business, one of the best methods is to cut down your daily expenses. For example, you may start your business from home to avoid monthly rental payments. Can you go for some days without going out to lunch? If you can consider doing so among many other steps you can take to keep your expenses low.

6. Make a Partnership

As explained in #3 above, it is good to start your business as a part-time thing. With this, you may look out for a partner with different skills that you don’t have and partner up with them. Also, the partner should be available whenever you are held in your job. This is the best way to run a small business without high expenses and added stress.

7. Incorporate Your Business Online

Many entrepreneurs find it hard to sustain their businesses at the start especially when the returns are lower than expected. Due to this, it’s good to protect whatever you have by limiting your personal liability. Consider incorporating your business online so if you are sued by a client, your personal assets are protected.

8. Conduct Thorough Market Research

As an entrepreneur, conducting market research and getting to know all the dynamics that your business venture will be involved in limits the chance of failure. On the same note, you will never need an infusion of capital from someone else by being well prepared. There are great tools such as Survey Monkey that can help you in doing online customer surveys.

9. Use Your Savings as Your Capital

To avoid borrowing of funds and resorting to personal and/or business credit cards, the best way to bootstrap your business is to collect all the savings you have and use them as your startup capital. This makes it easy for you to depend on yourself in running all the costs involved in your business. However, be careful not to dip into your retirement savings as you may never pay it back.

10. Have a Proper Business Plan

A business plan acts as a guideline for all that your business needs to achieve. Thus, a well-done business plan will always ensure that you do not waste your capital via impulse buying or unnecessary expenses that might lead to a cash decline in your enterprise.

11. Work From Home

Monthly office rent payments are one of the most tedious expenses you can subject yourself to when starting your business. If you can comfortably work from home and provide all the services that your clients need, then you will be able to save a lot of cash. Don’t just save though, save and invest back into your business for expansion.

12. Don’t Rush to Have Office Space

As an entrepreneur who is starting up a business, it is not advisable to look for an office space unless you have seen that the market demand for your products is high. This is because an office needs new equipment, office furniture and perhaps one extra member on staff which are all added expenses. If you can operate without an office then do so.

13. Insist on Immediate Payments

Another great idea to bootstrap your business is to ensure that all your clients pay for their product purchases instantly instead of financing their purchase. This will make it easier for you to make other purchases sooner than later and keep investing money back into the business. Time is money and hence the earlier the payments, the better.

14. Avoid Unnecessary Purchases

The main purpose to bootstrap your business is to ensure that only your capital runs the business without the need for capital infusion from any other source. Therefore, any entrepreneur who is serious about their business should keep off engaging in unnecessary expenses. Go for free version software available online for all your needs.

15. Keep an Eye on Cash Flow

A business that is financially stable will always grow and expand. This should mark the foundation for you. Keep a very close eye on any cash that either flows in or out of the business. Do it on a daily basis. Look for an accounting program that can sync your bank account online for you to always have the real-time financial status of your business.

16. Follow up on All Invoices

One of the major causes of business failure is bad debts. There is a tendency for entrepreneurs to always forget to follow up on all the invoices and receivables of the business. You should, therefore, download one of the free invoicing apps for your business which will make it easy for you to send reminder messages and follow up on debts that are past due.

17. Don’t Hire but Outsource

We understand that at one time or the other, you will definitely need someone to maybe develop a website for your business. However, you do not need to employ someone permanently to do this. The best way is to outsource employees and pay them either on an hourly or a daily basis instead of employing them permanently and give them monthly salaries.

18. Use Family Members

When it comes to maybe moving your furniture, avoid hiring somebody to do it for you expecting payment. Be as economical as possible to increase your savings. Try reaching out to some of your family members for help and see if they will do you a favor instead of hiring someone whom at the end of the day would demand payment.

19. Integrate Digital Marketing

Traditional advertisement methods such as radio and TV stations are almost outdated. Social media is the new thing in town with unmatched ability to gather fans and followers. Make sure that your business has an online presence and promote all your products from there at no to little cost.

20. Enhance Your Image

To any business, image is everything. Thus, you must ensure that your website, as well as social media accounts, have top quality photos and graphics that are appealing to the eye of a potential customer. Download top quality images for your business from pixabay or Stocksnap with ease and upload them.

21. Conserve Your Cash

Do not be tempted to spend the profits gained by your investment. Many entrepreneurs tend to take the profits from the business in buying fancy office furniture or cars to impress customers. Resist all these and invest your finances in new technologies that will boost your business.

22. Avoid Impulse Buying

In order to properly bootstrap your business, you need to keep off from impulse buying. Always have a budget for your needs and make sure that you stick to it by avoiding to buy stuff that is not on your budget.

23. Use Vendor Deferred Payments

If you want to fully ensure that your business is fully bootstrapped, one rule has to be adhered to. The rule is to ensure that cash inflow is higher than cash outflow. One of the best ways to reduce cash flow is paying your suppliers at a later date after you have already sold the products. When using this tip, however, always ensure that you pay off the debts after the products are sold to avoid debt accumulation.

24. Lease Equipment

There comes a time when your business could be in need of certain machinery. Since these machines could be used once in a while in your business, it is better to lease them from another company since it is cheaper than buying.

25. Have Future Plans

Starting small does not mean that you should just lay the foundation lightly. Have a strategic plan for the business. Go ahead and open a separate business account for the business and work hard to establish a high credit score. Also, set room for expansion among many other issues that might benefit the business in the future.

Companies That Succeeded With Bootstrapping

Building a strong business with a sound foundation and value takes time and many bootstrapped companies have achieved this by providing amazing products or services. Eventually, they reach the point, through solid strategies and sustainable profit, where the company grows to have a powerful position within their industry.

Many of the successful companies that we see today had their humble beginnings as a bootstrapped enterprise. Examples of these include:

Dell Computers (DELL)
Facebook Inc. (FB)
Apple Inc. (AAPL)
Clorox Co. (CLX)
Coca Cola Co. (KO)
Hewlett-Packard (HPQ)
Microsoft Corp. (MSFT)
Oracle Corp. ( ORCL)
eBay Inc. (EBAY)
Cisco Systems Inc. (CSCO)
SAP (SAP)

Obviously, there are entrepreneurs behind the scenes of successfully bootstrapped companies, such as Bill Gates, Steve Jobs, Michael Dell, and Richard Branson.

Example of a Bootstrapped Company

GoPro, Inc. (GPRO), which was formerly Woodman Labs, Inc, is an American corporation that develops, manufactures, and markets high-definition personal cameras. The company manufactures small, body-worn cameras that record the user’s experiences. These cameras became popular among sports enthusiasts because of their ability to record hands-free, high-definition footage.

Nick Woodman, an American from California, conceived the idea of a wrist strap that could tether already-existing cameras to surfers. His inspiration came after a 2002 Australia surfing trip where he was hoping to capture quality action photos of his surfing.

But he found he was unsuccessful as an amateur photographer because he could not obtain quality equipment at accessible prices. He tested his first makeshift models but came to the realization that these were not good enough, therefore concluding that he would have to manufacture the camera, its housing, and the strap himself.

The initial money Woodman raised to found the company—$10,000 dollars in bootstrapped cash—came from selling bead and shell belts out of his VW van. He moved back in with his parents at age 26 and worked many long hours to develop his product.

He scraped by doing many different types of work—from emailing to truck driving—so that he could design his product, which he did by hand because he didn’t have enough computer design experience to do so electronically.

In 2004, the company sold its first camera system, which was a 35mm analog camera, which eventually evolved to digital. As new adopters discovered the product, the cameras branched out from the surf scene to be used for auto racing, skiing, bicycling, snowboarding, skydiving, base jumping, white-water rafting, and skateboarding.

Sales Drive Growth

At the end of 2004, GoPro had $150,000 in revenue. At the end of 2005, GoPro made $350,000 in sales. The company consistently grew revenue and in 2014 GoPro went public with an initial public offering (IPO) valued at $2.96 billion.

Although it took 10 years for GoPro to reach its zenith, there had been a great deal of aggressive marketing, social media strategy, as well as constant consumer technology advancements going on throughout this time.

And, of course, the company benefitted from being in the right place at the right time by taking advantage of a situation when smartphones were making traditional digital cameras and camcorders obsolete.

However, Woodman was not a success the first time around. Previously, he had built two companies. The first was a website called “EmpowerAll.com,” selling electronic products. The second, “Funbug,” (funded to the tune of $3.9 million) was a gaming and marketing platform. Both failed. Determined to succeed, Woodman came back a third time to pursue his dreams with GoPro.

The Ups and Downs of Business

It’s important to note that like all businesses, a company that starts out as a bootstrap venture will face the same headwinds that all companies face once they mature past the early stages. GoPro is no exception to this. Since trading at a high of around $93 a share in Oct. 2014, the company’s stock has plummetted to around $4.60 a share as of June 2020.

The business model that made the company successful began to falter when GoPro faced competition from other action-camera companies and from the new technology that made smartphones the camera of choice for many consumers.

Over the years, GoPro’s competitive advantage over its rivals has decreased. Going forward, the company looks to recapture market share by introducing new cameras that feed the demand for high-quality social media content.

Other Bootstrapped Companies

Most companies have a bit of bootstrap in their past before moving to the next step and accepting outside funding. The decision to go the road of bootstrapping and create a self-funding business has been known to provide rewards that can be both immediate and lasting.

Basecamp

Basecamp (which started out as 37Signals) is a web application company that produces simple, focused software. It has become a highly successful business that started as a cash-strapped startup. It was founded in 1999 by Jason Fried and David Heinemeier Hansson (or DHH), who have co-written three bestselling books: Getting Real, Rework, and Remote.

In the early years up until around 2004, the company was primarily a consulting agency, basically helping to create and improve company website designs for companies such as Panera Bread and Meetup.com.

Since its launch, the company has developed many new products—producing both free and paid versions.⁸ In 2004, Basecamp—a powerful business tool for large and small businesses looking to get a project management app—became the flagship product of the company.

GitHub

GitHub, a web-based hosting service for software development projects that uses the Git revision control system, was founded by Tom Preston-Werner, Chris Wanstrath, and PJ Hyett.

This started as a weekend project, with the founders covering the costs involved to buy a domain, and when the decision was made to bring GitHub into full-time operation they funded the setup costs themselves.

This platform for developers—which functions as a social network, portfolio space, and co-working space—took off. By 2013, GitHub had hit the 3 million user mark.

As the platform became accepted by programmers, requests for private repositories, or safe places to store their codes where others couldn’t view or steal them, were being received.

After this, the founders left their day jobs and focused full-time on the business by working various hours and locations, and began to release products that may not have been perfect at the start, but with customer feedback, they corrected the issues and the business grew. As of April 2020, 50 million developers worldwide use the company’s software development platform.

TechCrunch

TechCrunch, a technology website, was founded in 2005 by a successful serial entrepreneur, Mike Arrington, along with Keith Teare. TechCrunch became the epitome of technology blogs online and basically transformed the space of blogging into great works of journalism.

The site achieved enormous growth and a loyal readership by putting out high quality, consistent content and by sharing stories about the latest happenings in the tech and entrepreneurship worlds.

To further enhance their presence, TechCrunch also created its powerful CrunchBase database with over half a million startups and high caliber entrepreneurs. In 2010, TechCrunch was sold to AOL for a rumored $25 to 40 million. At the time, Arrington personally owned 85% of the company.

Plenty of Fish

Plenty of Fish, one of the largest and most popular dating sites in the world, founded by Markus Frind, became a full-time business in 2004. Until 2008, Frind conducted his startup from his apartment, and then eventually acquired a new Vancouver, Canada headquarters where he began hiring other employees.

As of June e2020, Plenty of Fish had over 150 million registered users worldwide and is adding an average of 65,000 new users every day. The free app is available in 11 languages and more than 20 countries on iOS and Android devices. The company makes money via advertising as well as offering premium services as part of their upgraded membership. In 2015, Plenty of Fish was acquired by Match Group.

There are many companies that have been successfully bootstrapped: Braintree, TechSmith, Envato, AnswerLab, Litmus, iData, BigCommerce, Campaign Monitor, Indeed, Behance, Thrillist, Lead411, Office Divvy, Goldstar, Carbonmade, FastSpring, SparkFun Electronics, Grasshopper, Clicky, WooThemes, AppSumo, MailChimp, Burt’s Bees, Patagonia, and Craigslist are just a few.

What is Bootstrapping in Business?

Studies show that more than 80% of startup operations are funded by the founders’ personal finances. The median in start-up capital is about $10,000.

How do I Bootstrap my Business?

We will now see 8 tried, tested, and effective methods to bootstrap your business from scratch.

1. Customer-focused marketing:

Marketing your products can be a huge expense for any business and therefore keeping a sharp focus on your targets is essential to ensure return on your investments. Starting on a small budget, you need not waste money on extolling the general virtues of your products and services.

Using innovative methods to show the potential customer as to how your products can make a difference in their life. This will mean targeting the right customers for your products and making them know the effectiveness of your product.

Customer-focused marketing means connecting with your customers and for all your printing needs, Printed.com has a wide variety of options for all your business needs.

2. Keeping things in-house:

A large part of being a business owner is taking on a multitude of roles. When you are a small business, it becomes imperative that you handle things like PR and marketing on your own to save costs rather than contract these to third-party firms.

The fact of the matter is that you are your own strongest voice out there because no one would know your products and services than you would. Also, no third party would prioritize your business as well as you can.

3. Leveraging Equity:

Cash investments are a good way to create long-term partnerships to build your business. Leveraging equity has become a popular way for business owners to trade equity for the expertise of their investors.

As an entrepreneur, you have a lot to gain from their knowledge and experience without having to incur extensive costs and in return, these investors can earn a stake in your venture.

4. Starting small with your target goals:

Every business venture dreams of making it big in their respective field. Well, Who wouldn’t? But on second thoughts, starting small and working with manageable business goals is an effective way to turn your ideas into a successful business.

Taking one step at a time is the way to go about reaching your target goals. Using your time to court investors and accrue more funds for your business will hardly leave you any time to focus on the important tasks like connecting with customers and refining your product and services.

5. Creative Branding:

As a business with access to limited resources, it becomes a challenging task to creatively use the things at your disposal to make a significant impact in the market. This could be done via social media or a guerrilla street marketing, a subversive technique that requires flexibility and willingness to take risks.

As a business owner, you need to take a good look at creating a buzz that can be generated cheaply to connect with maximum customers. You don’t always need to go with traditional advertising methods to generate customers.

6. Virtual office spaces:

Virtual office spaces are the new mantra of the day. As a small business owner, having a virtual office space is a cost-saving measure without the need to invest in an actual space like buying or renting commercial spaces that require upfront investments.

Technology today is a boon in today’s age connecting us all via high-speed internet and smartphones. One is just a fingertip away in the virtual world.

7. Well laid payment terms:

Cash flow is crucial for the functioning of a business. In a report by Federation of Small businesses, it was found that 37 percent of the small and medium business ran into cash flow difficulties in 2016. This forced one out of three such businesses to seek the help of overdrafts.

Rather than wasting time on chasing payments, have a well sought out invoicing process for your business. Don’t hesitate to ask for advances on royalties, negotiate discounts with suppliers and barter off expenses to save up on costs. Such small step will ensure the survival of your business in the long run.

8. Secure all your devices (with Coupons)

Yes, you can get access to all-around device protection with coupons. So, make use of it. Let’s face it; we are more dependent on technology than ever. While it does give us the power to save a lot of time and multitask like a startup entrepreneur needs to, it also makes us vulnerable to malware and cyber crimes.

A total antivirus is an answer. Believe me; it’s not a choice; it’s a necessity. The power of malware is evident from what Wanna cry did to the world a few months ago. Trusting in total protection like Bitdefender is an absolute necessity today. And doing it with coupons is the best way to save money for other important things.

Limited budgets need to be a hindrance in growing your business and bootstrapping can be more of a blessing than a curse to help you tap your inner potential and resourcefulness that would ultimately help grow your business.

What Are Bootstrapping Strategies?

Let’s consider some key strategies you can use to increase the chances of successfully bootstrapping your startup.

1. Validate Your Idea

One of the very first aspects of successfully bootstrapping your startup involves identifying and validating a monetizable customer pain, calculating the size and demand of your projected target market, creating, testing, and refining your minimum viable product, and achieving product-market fit.

Part of these key processes involves validating your product idea. Fortunately, it’s possible to do so without having to spend much money at all.

2. Embrace the Hustle

Entrepreneurs love to recite the famous saying, “good things come to those who wait, but only the things left behind by those who hustle.”

Bootstrapping your startup can allow you to excel to new heights as an entrepreneur and a creator.

Anita Campbell does a great job outlining the ingenuity and talent that founders can develop when they embrace the bootstrapped approach:

“Bootstrapping brings out the best in entrepreneurs and the best in those they work with, too.

They are enthusiastic, passionate and relentless. They don’t give up on their dreams and they never stop learning. They also end up learning a lot more about themselves along the way and end up accomplishing a lot more than they might have originally thought possible.

Bootstrappers wake up earlier, spend longer days at work, know how to keep their wits about them even under pressure, know how to eliminate unnecessary distractions and are often very productive.”

One of the crucial things to which Anita points here is the importance of learning as much as possible when operating as a bootstrapper.

The reality is that founders who do not take on external investment typically cannot afford to hire sales or marketing teams or public relations (PR) firms.

Instead, they have to do it all themselves — at least during the early stages of their startups.

The point is that you need to hustle to make a bootstrapped startup work.

Invest time into studying sales, marketing, PR, recruitment, accounting, general business practices, and so on — these are crucial aspects of business that you can learn and apply yourself.

Remember that true hustling is ultimately about doing what 99% of the population won’t, i.e., doing everything possible to create a growing business and refusing to quit no matter how many obstacles are thrown in your path.

Make cold calls and send cold emails, attend conferences and meetups, talk to your customers in person, blog about the ongoing growth — the trials and tribulations — of your company with your online followers, etc.

3. Focus on Profits; Make Cash Work for You

Cut your personal experiences, watch your cash like a hawk, and implement a business model that generates cash quickly: these are 3 crucial recommendations offered by Rodrigo Santibanez at Fast Company.

Many others similarly emphasize just how crucial it is for bootstrapped startups to focus on generating profits by utilizing short cash conversion cycles, i.e., processes that allow every dollar you spend to return to your business as quickly as possible so that you can reinvest those earnings and achieve growth.

Insisting that producing profit is the “first law of bootstrapping”, Anita Campbell stresses the necessity of bringing and reinvesting cash into a bootstrapped business:

“Bootstrapped companies must focus on profits to keep on going. They have no outside investment dollars to spend — no ready pile of money they can tap into.

Bootstrapped companies therefore can’t afford to waste money. They must make money, if they are to survive. The profits they make are what fund the business. And because of that, a bootstrapper needs to develop paying customers. He or she has to be able to make payroll, pay the bills, and still fund the company’s growth — all from the money the company earns.”

How can you achieve a positive cash flow state for your bootstrapped startup?

More practically, if you’re building a SaaS business then one technique to bring as much cash into the company as possible is to offer discounts on monthly payments if users buy an entire year all at once.

As an example, Slack uses this very tactic to promote its annual billing:

4. Be Resourceful and Gutsy

Anthony K. Tjan nails the need for bootstrappers to be resourceful — i.e., to “bite down on their mouthguards”, refuse to give up, and exploit every last angle and opportunity — when he states:

“Great entrepreneurs have the guts to go after big ideas. They are willing to put themselves out there when most worry about, ‘What will others think?’

The definition of entrepreneurship that Harvard Business School Professor Bill Sahlman made prolific — ‘the relentless pursuit of opportunity without regard to resources’ — forms the center of the entrepreneurial mindset.

Entrepreneurs don’t worry about the resources they lack, but about the resourcefulness required to get the big idea done.”

Resourcefulness is a skill that must be developed.

And there’s no better way to train oneself to become scrappy, dexterous, and possessed of ingenuity than to build a startup from the ground-up.

What are some examples of resourcefulness?

Securing enough money to fund your startup even when you struggle to bring on investors: there are numerous government grants that can help push your company forward, from local and national to supranational and even private support offered by the likes of Google and Microsoft.
Using powerful yet free (or nearly free) tools like Google Docs, Slack, MailChimp, Wave Accounting, Squarespace, and many others, which make it very easy to establish a fully operating early-stage startup.
Being smart (i.e., “thrifty”) with your money: as Rodrigo Santibanez emphasizes, “being fancy doesn’t always get the job done. Pick functional over posh office space. Start with the free versions of QuickBooks and Dropbox. Print free business cards. Consider refurbished computers instead of the newest MacBook Air. Use a free banking service. Saving on little things goes a long way.”

There’s never been a better time to launch a startup. Your only limits are your own creativity, passion, and willingness to bring your dreams into reality.

What Strategies Can an Entrepreneur Use to Save Money When Bootstrapping?

There are strategies bootstrapped startups can implement to save money.

1. Reduce operating costs by working remotely.

For anyone who has calculated important business metrics like CAC (customer acquisition cost) or CTS (cost to serve), you will know just how hard it is to reduce fixed operating costs. One way to alleviate these costs is by creating a company that employs remote workers. Rather than needing to provide workers with office space, computer equipment, snacks and coffee, founders can avoid these money draining costs.

According to a Gallup poll on the state of the American workplace, 31 percent of employed Americans work remotely 80 to 100 percent of the time. This is a 7 percent increase compared to findings from four years ago. In short, working remotely is a phenomenon embraced by businesses and employees alike. It can be a great tactic for reducing overhead and therefore preserving cash.

2. Make frugality a company value.

In the mid-1990s when Amazon was just getting started, Jeff Bezos and crew worked on the floor in a 400-square foot warehouse. Bezos and his team decided that they needed desks, but being the frugal and resourceful entrepreneur that he is, Bezos decided to build desks out of doors and four-by-fours rather than purchase expensive office desks.

Today, Amazon lists Frugality as one of the company’s 14 core values. To perpetuate this value, Amazon gives out the Door Desk Award to recognize employees who save the company money in smart and sustainable ways.

3. Prioritize profitability over growth.

Today, both public and private companies tend to prioritize growth over profitability. Founders of all kinds are constantly in search of the hockey stick graph that shows all numbers moving up and to the right on a steep slope.

But growth has its costs — one big one can be profitability. For founders struggling to preserve cash, switching to a business model that leads to profitability sooner rather than later may be a smart decision.

Venture capitalist Fred Wilson wrote that biasing toward profitability can also improve business decisions generally: “I also think the profit motive, generating more revenues each year than the expenses you are spending to do that, is a really valuable constraint on a management team. It forces them to think creatively and logically about the investments they want to make.”

4. Take advantage of tax breaks and incentives.

Some states have recently created tax incentives to encourage innovation. Founders should be sure to spend time researching what tax breaks their business may qualify for to preserve cash. In New York State, for example, startups that open an office on or near a college campus may be eligible to operate tax free for 10 years.

In addition to tax incentives, some government agencies such as the Small Business Administration (SBA) offer grants and seed funding to startups working on exciting research projects. According to its website, the organization has contributed more than $2 billion to startups working on promising ideas.

5. Only hire top talent.

All-star employees can handle the workload of 1.5 or two normal employees. Therefore, it may make sense for founders to focus on hiring top talent. While supremely talented employees may command top-dollar, it can still be more cost effective to hire fewer but more talented employees.

For founders who are strapped for cash, many early hires are willing to accept stock options in place of high salaries. This can be a good short-term strategy to preserve cash while attracting top talent.

6. When possible, hire contractors instead of full-time employees.

Freelancers or contractors provide businesses with a more scalable workforce. As a bonus, these employees usually don’t expect the traditional benefits businesses must provide when hiring full-time employees.

Even Facebook and Google, companies that have plenty of cash on hand, have recently hired armies of contractors to manage various important tasks such as online moderation.

7. Build an amazing internship program.

Interns, as opposed to full-time employees, are less expensive to hire and require fewer benefits. They can also make a meaningful impact on your business. If founders time the hiring process correctly, they can land a few highly talented interns from top universities who will invest months of their time in exchange for experience, strong mentorship and good recommendations.

Founders interested in hiring interns to reduce costs should ensure they have a strong pipeline of candidates by doing some recruitment marketing. Once hired, it’s important that interns go through a thorough training program to ensure they will be productive as quickly as possible.

8. Delight customers to create word of mouth.

New customers referred to your business have very low acquisition costs. Businesses such as Dropbox and PayPal could rely on word-of-mouth marketing to attract new customers because it was highly cost effective. As a result, both companies were able to scale effectively while keeping acquisition costs low.

For founders interested in developing word of mouth, a great way to begin is by creating delightful customer experiences for existing customers. By going beyond to “wow” customers, founders are planting the seeds of new business.

9. Master organic search to reduce CAC.

Customer acquisition cost or CAC is one of the most important metrics every business must grapple with. The higher CAC is, the harder it will be to preserve cash and scale the business in a responsible way. However, the lower CAC is, the easier it is to make a profit and to, therefore, invest more in attracting new customers.

A great way to lower CAC is by mastering organic search as a marketing channel. Unlike other mediums such as paid search, display ads or paid social media, an organic search strategy can be successfully operationalized on a limited budget.

10. Monetize content just like Airbnb.

During the early days of Airbnb, the company was struggling. In need of cash, founders Brian Chesky, Joe Gebbia and Nathan Blecharczyk came up with a side project to make some quick cash.

During the 2008 presidential campaign, Airbnb released Obama O’s and Cap’n McCain’s — cereal boxes that were sold for $39 apiece. The company sold 1,000 boxes of commemorative cereal and made enough money to continue working on the business. Today, Airbnb is valued at $31 billion.

Cash strapped companies can consider creating an on-brand side project that allows the business to create cash flow while helping to spread awareness of the company’s main product offering.

The early days of any new business can be financially trying. For founders hoping to preserve cash, there are a few different tactics that can be implemented to save money while growing the business responsibly.

What is an Example of Bootstrapping?

Below we look at case studies of five highly successful companies that bootstrapped and why bootstrapping was fundamental in setting each company on a remarkable trajectory.

1. Facebook’s example of bootstrapping

When Harvard dropout Mark Zuckerberg wrote the Facemash program during his second year at the university, few could have expected that he was laying the groundwork for the future of social media.

When Facebook took off in 2004, spreading across college campuses like wildfire, it was clear that Zuckerberg had created something whose potential for growth seemed unlimited. The company finally received its first significant investment from PayPal co-founder Peter Thiel later that year.

But for college students who first got a chance to play with this earliest iteration of Facebook, it was clear from the second they created their profiles that this social network would not go the way of Friendster or Hi5.

Most notable though is how Zuckerberg created all of this with the help of several other students – who later sued him for approximately $300 million in shares – and how Facebook grew through both actual and digital word of mouth.

Simply put, it was the first social network to truly gain such traction and give its audience exactly what they wanted, something Facebook continues to do at the time of writing through its constant expansion of features that include live streaming video and messaging.

What Zuckerberg’s case shows is that the quality of an idea and a team willing to help one realise it could change the world, all without the need for significant funding to get started.

2. Dell’s example of bootstrapping

One thing that separates the bootstrapping example of Facebook from Dell’s and many of the other companies is that while Zuckerberg had the luxury of having a personal computer on which to programme Facebook, companies like Dell had considerably greater overhead in their desire to design and ultimately manufacture PCs.

So while the $1,000 in expansion-capital Michael Dell received from his family to drop out of college at University of Texas at Austin where he had already founded PC’s Limited might seem like a hyperbole form of bootstrapping, let’s save the hairsplitting and consider how that small family loan was soon turned into $30 million in four short years.

Dell’s “human capital” came in the form of his visionary understanding of the computing process that he gleaned in part from his dorm-room enterprise selling IBM PC-compatible computers made from stock parts.

What Dell showed was that he was able to look both at the past successes of other people on this list like Bill Gates and Steve Jobs and realise that there was still a section of the market open to him.

And by turning to his family who certainly did not have nearly close to the number of strings attached with VCs, Dell allowed himself to grow truly independent as Dell became a major player in the computing market in the late 1990s and 2000s.

3. Apple’s example of bootstrapping

Is there a bootstrap story perhaps as celebrated as that of Steve Jobs, Steve Wozniak, and their famous home-brewed operation?

Having dropped out of Reed College and UC Berkley, respectively – are we beginning to notice a pattern here? The two founders of Apple Computers met at a meeting of the Homebrew Computer Club, a local computer hobbyist group in Silicon Valley.

The duo soon set off on raising their own capital by making blue boxes that allowed people to make long-distance phone calls for free illegally.

After selling several hundred boxes, they next built their personal computer with Wozniak assembling the device and Jobs taking it to a local store to sell it.

Soon, they had an offer to manufacture 50 computers, but of course, there was not nearly enough capital for a high-cost order like that.

After Jobs pulled an incredibly bold stunt with a local credit manager, he secured the funds to build the computers.

Along with the help of Wozniak and a small skeleton crew of workers, Jobs and his team worked day and night to deliver the computers on time, and by 1976, with the help of Mike Markkula, the three took out the bank loan need to form Apple Computers.

From there, Jobs carved out a legend for himself as a business pioneer who followed his instincts. Still, it’s clear from the start that his bootstrapping approach to starting Apple stemmed from a belief in the capabilities of human capital and bootstrapping.

4. HP’s example of bootstrapping

Perhaps it was the times, but it’s remarkable how much of early computing history took place in garages, not to mention the number of bootstrappers included in this article.

Back in 1935, William Redington Hewlett and David Packard graduated from Stanford University with electrical engineering degrees while the Great Depression offered a little opportunity in sight for two bright young engineers.

So instead of standing in bread lines, they set about starting their own company with the help of a former professor of theirs at Stanford, Frederick Terman. First originating in their garage in Palo Alto following an initial $538 investment, a series of pioneering computer inventions led them to incorporate in 1947 and file for an IPO only a decade later.

As Hewlett and Packard’s case shows, youthful ambition, even when it’s set against the greatest economic disaster in American history up to that point, paired with real talent, is a crucial ingredient in bootstrapping success.

Although there wasn’t a demand for technological processors and devices, at least not a pronounced one, Hewlett-Packard demonstrated that where there’s no perceivable market, it is still for companies with one-of-a-kind products to thrive.

5. Microsoft’s example of bootstrapping

While it may seem unfathomable that the biggest computer company in the world would have started with bootstrapping finance, Bill Gates was a tenacious bootstrapper.

Starting Microsoft a year earlier than Apple in 1975 with his partner Paul Allen, Gates and Allen had begun back in 1972 with the creation of their first company called Traf-O-Data, which tracked and analysed traffic data from vehicles.

Their big breakthrough came in the form of a 1975 Popular Electronics feature on the Altair 8800 microcomputer. Allen believed that the two of them could develop a BASIC interpreter for the computer, despite not having a working model.

Instead, Allen developed an Altair simulator and Gates programmed an interpreter that ended up performing perfectly during the demonstration. Soon after, Microsoft was born, and history was made.

What Gates and Allen demonstrated is that the bootstrapping approach requires an immense amount of work for no guaranteed pay-off.

Examples of Bootstrapping Business

Bootstrapping means using the little that you have as start-up capital for the business. When little profits are realized, you need to plow them back into the business. By doing so, the business would experience growth.

The million-dollar question with many entrepreneurs is “how can I learn the art of bootstrapping my business?” We got you covered. Here is a vivid description of 10 business bootstrapping ideas you need to know.

1. Look for a Business That Needs Less Start-Up Capital

2. Businesses That Generate Fast Cash

Since you do not have a large amount of capital to start up a large business, we would recommend that you use the little capital that you have and invest in a business that is market-ready. Look for a business that generates immediate returns so you can put the profits back into the business. Doing so will allow you to accumulate the business funding you need to kickstart the large business.

3. Taste the Waters

4. Try Bartering

5. Cut Down Your Expenses

6. Make a Partnership

7. Incorporate Your Business Online

8. Conduct Thorough Market Research

9. Use Your Savings as Your Capital

10. Have a Proper Business Plan

What Are The Methods of Bootstrap Financing?

Let’s now go through the 10 different sources of bootstrap financing to grow your brand.

1. Personal Investment or Savings

An entrepreneur’s belief and faith in his business is measured by how much of his personal savings and capital is in the business. You should have some money saved up for the business you intend to start.

Some entrepreneurs go as far as investing either a part, or their entire wealth and time in the growth of their companies. This is more or less the first thing investors look out for, before committing their funds into your business.

Juice out whatever cash resources you have access to, from your cash accounts, to credit cards, to home equity loans, to selling other investments. The less cash you raise from outsiders, the more your stake in the business, especially during the “infancy” stage of your business when valuations will be at their lowest point.

2. Co-founders

As an entrepreneur, one great source of bootstrap financing is through a partnership or finding a co-founder with money. Getting yourself a co-founder can be tasking, especially when it wasn’t in plan from the start. However, partners and co-founders can be a great way to ease yourself off the financial burden of your business.

Co-founders can be a great source of cash investment or sweat equity from people who believe in your brand to the extent of working without a cash salary. You know what they say about a problem shared; half-solved. So, sharing the financial burden of your company with co-founders and partners will ease the financial stress.

Kill that self-made philosophy; don’t think you need to build your startup all by yourself. Find others with similar vision and dreams, with aligned values to complement your skill-sets and build the empire you desire.

3. Friends And Family

Charity begins at home, they always say. Sometimes it is easiest to raise capital from the people that know you best and can vouch for your personal drive and skill set, much better than an investor, who is a complete stranger.

However, you have to be clear and open with them upfront. They should know that they could lose all of their investment in a risky venture and should not invest more than they feel comfortable “gambling” with.

4. Customers

Customers are another source of bootstrap financing, and there are several different ways to spin the wheels of these valuable assets. One way to use your customers to obtain financing is by having them write you a letter of credit; more or less like a local purchase order (LPO).

For instance, suppose you’re starting a business, manufacturing laptop power banks or inverters, and a large corporation places an order with your firm for a steady supply of these laptop power banks and inverters. If you obtain the materials for your product from your supplier in China, you can obtain a letter of credit from your customer when the order is placed.

Then, the material for the power bank and inverter is purchased using the letter of credit as security. In this case, you don’t have to pay a penny to buy those materials.

5. Vendors

You can get vendors to trade all or a portion of their services for equity. Trading of equity in your business, as an alternative to paying cash, often sounds like a great idea to a cash-starved startup. But, you have to realise that giving up equity in your business is often a very big decision, and can come at a long term price, both financially and operationally.

Before going into such deals, you have to understand the structure of these deals. Deals like this boil down to the security, voting rights, and valuation of the deal. For the security, shoot for a convertible note or common stock deals.

For voting rights, it should be capped at their pro-rata ownership in the company, and typically should not require any seats on your board – just so you can run your business as you deem fit.

6. Crowdfunding Sites

Some startups are limited in the ways they can raise funds. Not everyone has access to wealthy family members and friends, or even angel investors and VCs. So, a number of startups have turned to crowdfunding as a viable means of raising capital for their businesses.

The crowdfunding system of operation is through the use of small amounts of capital from a large number of individuals to finance a new business venture or startup. Crowdfunding makes use of easy access to vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together.

Furthermore, apart from raising funds, crowdfunding ventures have also been proven to be a valuable way to gather public opinion and create publicity for a startup or its product. Crowdfunding platforms like kickstarter, Gofundme, Indiegogo, etc. can be of help.

7. Small Business Grants

Grants are also a great way to go when using the bootstrap financing route. Free grants are available, especially if your startup is helping to solve a social problem (healthcare, education).

If you’re interested in starting a nonprofit, or in creating a product that stems out of some sort of academic research, grants might be the best option for you.

8. Reduce Operational Expenses (OPEX)

As an entrepreneur, it is good to know that reducing your expenditure to the barest minimum cuts down on the amount of cash required to fund your business.

You can use the following techniques to reduce startup expenses:

Use bartering to exchange goods and services.
Run the business from home or share premises to reduce rental payments.
For the first few years, founders should view their time as an investment and keep their salary to a minimum.
Employ relatives and friends at non-market rate salaries.
Engage students in projects to provide knowledge at a low cost.
Hire staff part-time instead of employing them permanently.
Share employees with other businesses

9. Equity Free Funding Programs

There are a couple of equity-free funding programs now. You can find them if you look for them. The programs are structured like business plan competitions, incubators programs, and accelerators programs.

Accelerators are usually designed for companies that are farther along in their journey. These programs are available and we publish them on the opportunity section of Entrepreneurs.ng.

10. Get A Part-Time Job Or Freelance

This is more or less contradicting terms. How can I get a job when I’m working on my own business. It sounds crazy. Yes, I know. However, the lowest hanging fruit in bootstrap financing your business might be getting a job or freelancing.

Clearly, there are lots of freelancing platforms that make it easy to find short-term contract work. Platforms like Upwork and Freelancer lets you create a profile and start taking on projects as soon as you are ready. In addition, freelancing can be a great way to build skills and capacity that you might find useful and handy when building your business.

Examples of Bootstrapping Methods in Entrepreneurship

1. Stick to a business domain you know and love.

Starting a new business in an area where you have no experience, just because it appears to have great potential, is a recipe for failure. There are unwritten rules in every business, and your lack of insider’s knowledge will cost you dearly. Good connections can get things done for very little cash.

2. Find team members to work for equity rather than cash.

People working with you need to understand their failure means startup failure, rather than expect money up front. Managing employees and contracts is difficult and expensive, and new entrepreneurs aren’t very good at it anyway. Equity is your best assurance of commitment and focus.

3. Build a plan around your budget, rather than around your wishes.

Entrepreneurs who start without a plan spend more money. Likewise, those who feel compelled to keep up with the popular media will spend most of their time courting investors. Most investors agree that too much money leads to poor spending decisions and lack of controls.

4. Defer your urge to find office space until you have customers.

Remote startup team members are the norm today and can be very productive with smartphones, video and the high-speed Internet. Office space costs money up front, requires equipment, staffing and travel expenses. With a website, your business can look as big as any competitor.

5. Ask for advance on royalties and vendor deferred payments.

If your solution has real value, future partners will jump on discounted future royalties, and many vendors and existing partners will understand your cash flow challenges. You may also be able to barter your services to offset theirs. It never hurts to ask. Practice your sales skills early.

6. Negotiate inventory management with suppliers and distributors.

For many products, suppliers or distributors will direct ship your product to eliminate your inventory. For services, don’t be afraid to ask for a retainer up front to offset your costs. Business terms are negotiable, but new entrepreneurs with plenty of cash don’t bother to ask.

7. Choose a business model to optimize your revenue flow and timing.

Popular examples include monthly subscription fees and optional service fees, versus one-time product sales. Another is the use of an ecommerce site, rather than retail, to facilitate product sales seven days a week, around the clock and around the world.

One of the biggest ways to reduce your budget and your risk is to use social media, which essentially is free, to find out whether you have an attractive solution before you invest your time and limited resources in creating the product or service. Social media is also an invaluable and inexpensive marketing approach since no one buys a solution they can’t find or don’t know anything about.

Bootstrapping Techniques For Startups

If you are thinking of bootstrapping a new startup, consider these five tips to help you reach your goals.

1. Limit overhead by using a coworking space.

I feel that some startup founders focus on the things that don’t matter in the beginning. A fancy office space and ping-pong tables are cool, don’t get me wrong, but they can be an unnecessary expense in the early stages.

That money could be used for customer acquisition and marketing, for example. To cut costs significantly, consider using a coworking space. Aside from the monetary savings, there are many additional benefits.

“Working in a coworking environment can help you become a better decision-maker. In order to scale and move into your own office space, you will need to quickly identify your minimum viable product (MVP). Coworking spaces offer an environment that allows you to put your head down and focus on building without the stress of long-term commercial office rent,” says Shannon Wu, founder of Mr.Progress.

Consider a coworking space even if you have the funds to spring for an elaborate office. When Gary Vaynerchuk started VaynerMedia in 2009, he did so out of another office. He bartered his time for that space, and at that point, he was already rich. He could have started in any office space he wanted, but he opted to eliminate that overhead in the beginning.

2. Avoid credit card debt at all costs.

As Mark Cuban says, “Credit cards are the worst investment unless you pay them off every 30 days. Even then, don’t do it.” When times get difficult financially, one of the easiest ways to alleviate the situation is to break out the plastic. Credit card debt can quickly add up and impact you negatively, including ruining your personal finances.

“The major benefit of bootstrapping is that you retain ownership of the entire company, and since you aren’t raising capital, you want to remain as debt-free as possible. Piling up credit card debt is the fastest way to get in a hole, which might then require an investment in order to bail you out. If you want to continue to own your entire company, avoid credit card debt,” advises Robert Rodrigues, founder and COO of Power Digital Marketing.

If you do find yourself buried in credit card debt, focus on paying it off as quickly as possible. You will perform much better and be able to think much more clearly with that weight off your shoulders.

3. Learn how to be a publicity magnet.

There are some amazing PR firms out there that create a tremendous amount of buzz and exposure for startups, but if you are bootstrapping, a $10,000 or $20,000 monthly PR retainer is going to be out of the question.

There are plenty of ways to generate valuable press for your business if you are willing to roll up your sleeves and do the work. Dedicate time to replying to daily queries through free services like HARO, and network with as many journalists that focus on publishing content related to your industry.

“When you don’t have the luxury of a budget for PR, it all comes down to hustle. You have to be able to both lean on your existing network and not be afraid to reach out to new leads. Often the only obstacle between your business and free publicity is your own fear of rejection,” suggests Darius Eghdami, CEO of FansUnite.

Avoid emails. Journalists are bombarded with emails daily, and yours will likely just blend in with all the others. Instead, get active on Twitter and try to get your foot in the door that way. Twitter is short and sweet, and it’s the social network that almost all journalists monitor daily for breaking news.

4. Evaluate every expense carefully.

When the money is rolling in, some expenses become an after-thought. If you let your guard down and start freely spending, it can cause a problem down the line if business slows or you face a challenge. Being financially responsible is key.

A startup founder was trying to get their digital marketing strategy ironed out. They had over a half-dozen tools and products that they were paying $1,800 a month for, and they weren’t using them. That’s $21,600 a year, just wasted, because of careless spending.

They were experiencing sizable growth, so they stopped evaluating every expense. You should never ease up when it comes to reviewing your outgoing expenses — that wasted money could be better utilized if it were put toward an emergency operating expense fund.

You also develop a business survival mindset when you are constantly cautious about expenses. “Bootstrapping is one of the most valuable stages a founder goes through. When every single expense is scrutinized, one must creatively find unconventional ways to solve complex problems and doing so builds the resourceful gritty mental habits required to build a successful company,” says Zain Dhanani, CEO of Tinsli.

5. Remember that venture capital (VC) money isn’t free.

The number of startups that raise a lot of money, blow through it and then fail because they can’t raise additional money is absurd. VC money isn’t free money — it’s far from that. Running out of money is one of the most common reasons for failure.

“Many brilliant entrepreneurs become blinded by VC dollars and forget that revenues minus costs must equal a profit. Entrepreneurs need to realize VC dollars aren’t free — they get paid back first no matter what the outcome is. Bootstrapping might result in a slower growth curve, but it often results in a much better financial outcome down the road,” explains Ryan McQuaid, CEO and co-founder of PlushCare.

Venture capital money can be a good tool for some, but it’s not always fully understood. For something large-scale like Snapchat, yes, VC money is needed to handle the rapid scale. Startups on that level are very few and far between, which means most can succeed through bootstrapping.

Successful Bootstrapped Startups

Here are five startups from around the U.S. that have never raised institutional venture capital or crowdfunding cash, including some companies you know and some you almost certainly don’t.

1. BiggerPockets

In 2004, Joshua Dorkin founded BiggerPockets, the largest online community for real estate investing, with no venture capital money. It was a grueling journey for Dorkin and he constantly thought about quitting. But he kept at it and now Denver-based BiggerPockets has more than a million members and a wealth of content including a hugely successful business podcast. Dorkin served as CEO for 14 years and now serves on the company’s board.

2. Mailchimp

In the realm of email newsletters, Atlanta-based Mailchimp is a giant. There’s a good chance you receive emails from Mailchimp in your inbox every day but don’t know it. But this massive company with nearly $700 million in annual revenue started from a bootstrapped dream.

Co-founders Ben Chestnut and Dan Kurzius started the company in 2000 after being laid off from web design jobs. It took until 2007 for them to focus exclusively on MailChimp, but that focus has paid off as it is one of the biggest companies in its space. The company was named Inc.’s Company of the Year in 2017 and today it is still 100% founder-owned.

3. MyClean

Former investment bankers Mike Russell and Mike Scharf started New York-based on-demand cleaning service MyClean in 2009. The two believed that getting home and office cleaning services should be easy to get, so they convinced family and friends to loan them $267,000 — which must have required quite the sales pitch (but is still much better than a term sheet from a venture firm expecting a 10x or 20x return).

Russell and Scharf’s big gamble has paid off handsomely, with more than 400,000 home and office cleanings completed since their founding and the company earning more than $9 million in annual revenue. The company has expanded beyond New York to Chicago and Washington, D.C., as well.

4. SparkFun Electronics

Boulder, Colo.-based SparkFun Electronics, an online retailer for circuit boards, microcontrollers and hobbyist electronics, was founded in 2003 with a simple idea. Founder Nathan Seidle decided to resell hard-to-find circuit boards and gadgets to geeks like him who enjoyed building electronics.

The business has grown rapidly over the years, with annual revenue above $30 million and has no signs of slowing down. The company offers hundreds of its own hobbyist electronics and resells thousands of third-party items to help people build whatever they can imagine.

5. Tough Mudder

When describing the initial idea of Brooklyn-based Tough Mudder to the average person, it probably sounded a little crazy. “Thousands of people will pay good money to run the most grueling obstacle course ever invented, which will include ice baths, extreme hill-climbing, and electrical shocks.”

But that idea, put forth by Tough Mudder co-founders Will Dean and Guy Livingstone, turned into an incredibly successful company that hosts many of these crazy endurance events each year around the world.

Dean and Livingstone each put about $10,000 into the company when it started and if their first race had been a bust, they would have lost it all. Today, more than two million people have run Tough Mudder races, all with no venture capital or crowdfunding.

What is Bootstrap Used For Statistics?

Bootstrapping is a statistical procedure that resamples a single dataset to create many simulated samples. This process allows you to calculate standard errors, construct confidence intervals, and perform hypothesis testing for numerous types of sample statistics. Bootstrap methods are alternative approaches to traditional hypothesis testing and are notable for being easier to understand and valid for more conditions.

Both bootstrapping and traditional methods use samples to draw inferences about populations. To accomplish this goal, these procedures treat the single sample that a study obtains as only one of many random samples that the study could have collected.

From a single sample, you can calculate a variety of sample statistics, such as the mean, median, and standard deviation—but we’ll focus on the mean here.

Now, suppose an analyst repeats their study many times. In this situation, the mean will vary from sample to sample and form a distribution of sample means. Statisticians refer to this type of distribution as a sampling distribution. Sampling distributions are crucial because they place the value of your sample statistic into the broader context of many other possible values.

While performing a study many times is infeasible, both methods can estimate sampling distributions. Using the larger context that sampling distributions provide, these procedures can construct confidence intervals and perform hypothesis testing.

What Are The Methods of Bootstrapping?

Below are some proven methods that will help an entrepreneur in the early stages of the bootstrapped startup:

Reinvest net profit.
Create a business plan. Planning is necessary, and it will help the owner organize things and understand the vectors of movement.
A business idea (product/service) should solve someone’s problem. Otherwise, there is neither a product nor a target audience.
Attract a mentor or any person who is successful in that business and who will give useful advice.
Use the most of networking opportunities and communicate with a network of personal contacts. In a developed personal network (or a network of friends and relatives), there may be journalists who will write about you or graphic designers who will make a logo or a minimalistic but trendy website out of friendship.

What Are Some Common Bootstrapping Strategies Used by Entrepreneurs?

1. Build Key Partnerships

Evidence from a sample of 103 technology firms shows that excessive bootstrapping negatively affects venture growth, however, cost minimization and resource sharing outcomes resulting from strategic alliances significantly minimize the downside from extreme and extended bootstrapping.

Key partnerships is the ultimate growth channel. In fact, right from the beginning, Uber built strategic partnerships with companies like GM and Toyota to strengthen its value proposition and facilitate growth.

For early-stage startups, perhaps you need a lab, manufacturing equipment, software or maybe just transportation. Before you blame your inability to execute on access to high-cost tools, check your network.

Maybe you can use your school facilities, perhaps you can borrow what you need from a friend, or maybe you can contact a facility and ask if you could borrow their assets either for a fee or by helping them accomplish other tasks. When Colin Chapman started Lotus Cars, his contacts in the aircraft manufacturer De Havilland gave him access to the company’s multi-million dollar facility.

2. Presell The Product

According to research conducted by three McKinsey consultants, companies with strong pre-sales capabilities have above-average performance, 40 to 50 percent in new business and 80 to 90 percent in renewal business. With as little as a prototype or a service pitch deck, reach out to your potential buyers and presell your product.

Preselling is an effective bootstrapping strategy for new as well as established businesses. Sales don’t only signal people’s interest in your upcoming product but also, it’s one way to fund its development.

3. Customize Contracts

Richard Branson convinced Boeing to accept his terms of returning the planes for a full refund if Virgin Atlantic doesn’t meet its first-year projections. Boeing accepted. Elon Musk presells every new Tesla model including the recent Cybertruck launch which received over 200,000 orders so far.

Preselling a product is one form of contract customization. Given that one of the biggest investments in a startup is product development, seeking customers’ commitment before building the solution is probably the most effective risk minimization strategy for new startup products.

The truth is, in most cases and especially in competitive markets, convincing customers to commit to a product before its launch is easier said than done. If you don’t have Branson or Musk’s brand, resources and support, the best way to overcome presale objections is by customizing the presale contract to include a service period during which you solve customers’ problems by doing things that may not be scalable as long as they get the job done.

For example, the founders of Airbnb started with their own apartments and air mattresses. DoorDash started by distributing flyers, accepting phone calls and delivering the orders with their own vehicles. Groupon started by sending email blasts to the employees of their office building. None of those billion-dollar startups started with a product.

How Does Bootstrapping Apply to Entrepreneurs?

One of the earliest and most critical decisions an entrepreneur must make is whether to self-fund a startup by bootstrapping, or raise outside funding through venture capital. The implications of each decision are significant.

How you fund your company will help determine its chances of success, its scale, its long-term prospects, and ultimately, your relationship with your company.

It’s never easy, and it’s not always glamorous, but bootstrapping will force you to become a better, stronger entrepreneur with a more vibrant business. Here’s why:

Creative Freedom: The creative and executive freedom that entrepreneurs have at the beginning of their projects is priceless. Bootstrapping a company with your own funds protects that freedom without the (often stifling) accountability to an outside voice protecting its investment. When you bootstrap, you are that voice — and you’re the creator too. Even if you supplement with outside funding down the road, bootstrapping gives you far more control over your own business in those critical early days.
Smaller = Scrappier: With less capital to work with, you will be forced to start small, test your assumptions carefully, and then scale up. Along the way, you will learn about your products, markets and customers more intimately. And if you make mistakes — as all entrepreneurs do — they will almost certainly be smaller in scale and impact. Meanwhile, you will learn to become a scrappier, more vigilant founder.
Better Products: Another advantage of a limited budget is a greater focus on your products and services. The pressure of a shorter runway will force you to get your products right. When every last dollar matters, you need to pay attention to your customers and their needs by building a superior offering. That insight and dedication will increase the likelihood of generating revenue and building a brand more quickly.
High Stakes (But Higher Rewards): As a bootstrapper and founder, you are your company’s original (and only) shareholder. As a result, you will retain control and equity. Bootstrapping also aligns your incentives with the success of the company: If it fails, so do you; if it succeeds, you succeed too — and at higher multiples. This also keeps ownership clear and manageable; no other investors will claim parts of the company or impede the important, rapid decisions you have to make in a startup’s early days.
Smarter Decisions: You will rarely be as cautious with other people’s money as you are with your own. Bootstrapping will almost certainly make you a better manager and incentivize you to intelligently grow your business. Learning how to do more with less is one of the most important skills of an entrepreneur — and a key principle of 21^st-century business.
Better Profit Margins: Bootstrapping a business is one of the best ways to stay lean, which will do wonders for your profitability and valuation. Plus, companies running with low overhead, often enjoy a much larger profit margin. If they succeed and begin to consider exit opportunities, a low-cost margin can have a dramatic impact on earnings, which is a common basis for valuation. One of the most compelling ways to increase your exit multiple is to cut costs — a skill that bootstrapping entrepreneurs understand well.
Faster Progress: Bootstrapping usually keeps a company’s runway short: With less cash, there is less time to get a company off the ground. This is one of the greatest motivators to quickly build a product and get it to market. Rapidly testing and iterating on your offering is an efficient and cost-effective way to develop a product. It will also dramatically increase your chances of success. Outside investment often reduces that pressure, creating a cushion that can add months or even years to your timeline.
Less Outside Influence: Raising outside investment often attracts a great deal of attention, particularly when the investors are high profile or the deal is widely publicized. While glamorous and exciting, it also raises your profile significantly. In contrast, entrepreneurs who bootstrap have a major advantage: They can operate in relative secrecy for a period of time, staying off the radar as they fund their own operations. And that can make all the difference in maneuvering around competitors and building a great product .

Every entrepreneurial venture is different, of course. The one constant, however, is that success depends on an entrepreneur’s ability to execute effectively. And my years of experience as an entrepreneur have taught me that bootstrapping is a powerful, fulfilling, intelligent way to execute.

Types of Bootstrapping Financing

Bootstrapping means to get into or out of a situation using your own resources. A bootstrapped business is a company without outside investment funds.

Entrepreneurs refer to bootstrapping as the act of starting a business with no outside money — or, at least, very little investment. Bootstrapping means launching a business without the help of venture capital firms or even significant angel investment. Bootstrapped companies are not the kind that draw media attention from huge funding rounds.

The founding entrepreneur, known as the bootstrapper, is the one sole investor in the beginning. The founder’s only investment capital might be personal savings – and of course the time he or she spends working for free to get the business up and running.

Bootstrapping requires plowing the money earned from customers back into the business. In other words, the bootstrapping entrepreneur relies on cash flow to grow their business in the place of outside capital.

You’ve heard the old saying about “pulling up by your bootstraps”. When it comes to startups, the bootstrap definition means to do something on your own.

Bootstrapping Business Ideas

Bootstrapping business ideas are a dime a dozen, but finding ones that actually work are the key. Here are a 7 unique bootstrap business ideas that could inspire you to join this thriving market.

1. Open A Craft Store

People are slowly growing tired of the bland uniformity of branded products. As a result, crafts are once again getting a little more consumer attention. All you’ll need to do, if you want to start a craft-based business is find the one that suits you best. Fortunately, the pool you can choose from is very deep and it includes activities that range from very simple (flower arrangements and making natural cosmetics), to more physically challenging (forging, woodworking, and leatherworking).

Some items could reasonably sold online through your website, Amazon, or eBay as well if you don’t have the bootstrapping resources to open a storefront immediately.

2. Become A Digital Marketing Freelancer

Small business owners are too busy running their business and they need help in digital marketing. There are many types of services you can offer such as custom web design, affordable SEO, paid ads management, content writing, and more.

According to a recent study by Clutch, 58% of businesses without a website plan to build one. Building a custom website for small business owners could be very lucrative.

Another study by Junto says 93% of online experiences begin with a search engine. If you could optimize a small business website with the right keywords, you could be rewarded handsomely.

3. Repair Smartphones And Computers

Nearly everyone has smartphones and computers these days so it’s really a recession-proof growing marketplace. Repairing mobile phones and personal computers is really not that difficult. Spend a few days researching the topic online and you will already have a pretty good idea what you should do. Of course, you will have to practice a lot before you start repairing. However, once you start bootstrapping your smartphone and computer repair business, finding the right associates and building a reliable supply network should be your priorities.

4. Start A Boat Detailing Business

A boat requires a lot of maintenance and many boat owners are used to paying big bucks. Boats that are docked even for just a few months will need a thorough hull cleaning. Depending on the type of the boat, cleaning could easily extend to holds, head and even the sleeping quarters. You will be able to find customers in no time. However, before you do that, obtain all the necessary equipment. Once the income starts pouring in, you can invest more money in marketing and bring your business to the next level.

5. Start A Vintage Shop

Over the past few years, nostalgia became a very expensive word. You can easily exploit this trend by regularly visiting vintage stores and flea markets, looking for rare nostalgic and vintage items, and reselling those items online. Whether you are going to go for the broad appeal or you are going to focus on some niche market (old DVD’s, furniture pieces, vintage clothes, old gaming systems, etc.) is up to you. If everything goes well, you will quickly be in position to upgrade your business with a brick and mortar store.

6. Start A Warehouse Business

Although they are very profitable, most of the small retail businesses share one common problem – they lack proper facilities to store their goods. Opening your own warehouse and renting those businesses a storage space sounds like a very lucrative proposition.

Of course, you will have to make a substantial upfront investment, rent the facility, acquire forklifts, an elevated work platform and other necessary equipment – such as chemical storage containers from STOREMASTA if you are storing dangerous goods or flammable materials, for example, but the returns you will soon start to make will more than justify the costs.

7. Open A Pet Care Center

This is an easy pick for everyone who loves animals. Starting this job is a relatively easy task. But, before you rent some premise or turn your house into a pet care center, you will first have to earn some money and reputation. The best way to do this would be by offering dog sitting services. However, once you open your center, the possibilities for expansion will be endless. You can hire a professional veterinarian, dog stylist, start a dog breeding program, and even open your own pet shop. Who knows, maybe you can even turn this business into a franchise.

7 Rules For Success in Bootstrapping a Business

if you follow a few rules, you can minimize your risk and maximize your chances for survival.

Validate your idea. Is your business idea a good one? How do you know? Don’t just ask your friends and family what they think. You won’t get a straight answer. Ask people who don’t have a stake in your potential success (or failure). And then listen to what they have to say. The best way to validate an idea is to ask potential customers but if you can’t do that, try someone who has been down this road before…
Get a mentor who’s not going to give you any BS. Don’t look for the person who’s going to affirm your ideas; look for a guy (or gal) who’s going to challenge you to defend your reasoning and your decisions. If that person is in a related industry, even better. This doesn’t have to be a formal arrangement; you just need an occasional sounding board. You may not like what you hear but keep listening.
Become obsessed with your customers. Who are they? Where are they? And how will you get them? Those are the first questions you need to answer. This task should take up half your time. The other half? Spend it on making sure your product or service exceeds those customers’ expectations. If you do it well, those first customers will become your reference, your case study, and best of all, they will bring you more business.
Reinvest everything back into the business. When I started my company, I spent more money than my customers gave me to create a better product than they expected. I took nothing for myself. If you focus on profitability too early, you’ll end up with a mediocre product or service. And mediocrity won’t help you get more business. Then you’ll need to spend all the profits you took anyway to find new business.
Be cheap, but smart. Need new customers? Find a cheap way to get leads. You’ll spend a lot more of your own time qualifying the leads to find the good ones. But that’s better than trying a risky and expensive marketing approach that may get you nowhere. Craigslist is a great example. It’s known to get you “cheap” customers but you’ll find some good ones there too. This also applies to hiring. Don’t be too quick to hire full-time employees. Try offshore help and contractors whose payment terms parallel how your customers pay you. It will take you time to find the good ones, and will likely take even more time to work with them to get the product you need. But if you’re smart and productive, your cost-cutting will pay off.
Start marketing before you think you’re ready. Too many start-up founders spend all their time and whatever little money they have on building a product with a ton of features. But then there’s nothing left when it’s time to show it to people. Find good, cheap, effective ways to reach your potential customer in the early stages of your business. Try to automate your marketing if you can. And whatever profits you do make, put as much back into marketing as you can. I started marketing before I even had a product, and it was the best thing I ever did.
Don’t do it alone. Starting a business by yourself is hard. It’s even harder when you have no money. Find a good partner who shares your passion for the product—but don’t look for someone just like you.

Why do Startup Companies Need Bootstrapping?

Businesses that are bootstrapped receive their initial funding through the founder’s personal savings until revenues from business operations can finance the business.

During the Idea and Proof of Concept phases of a funding plan, most businesses have limited funding options, and bootstrapping is certainly one of the most common ways to fund these early stages.

The business needs to gain enough speed (revenue) to reach take-off-speed before it runs out of runway. If the business is nearing the end of the runway and does not yet have sufficient speed to take off, the business will need to either look for more money to lengthen the runway or be forced to jettison some of its cargo (expenses) to make the plane lighter or end in a fiery crash.

Bootstrapped businesses, by their nature, require that the founders focus their attention on the short-term cash flow of the business so as not to run out of money before the business can fly on its own. Revenue and retained earnings in the form of cash in the bank, as well as the company’s expenses, need to be tightly managed.

When bootstrapping a business, the founders will defer the withdrawal of any discretionary income out of the business as compensation for working on the business until the business is self-sustaining. Only then can the founder consider using a portion of the business’s discretionary earnings as an owner draw to get paid for their efforts.

Bootstrapping, therefore, puts all the financial pressure of the success of the business on the founder’s shoulders causing them to live below their means, often for extended periods of time, until the business starts to become profitable.

How do I Bootstrap my Startup Without Funding?

When you bootstrap your startup, you retain full control of the new business. You don’t have to worry about securing and keeping funders happy. If bootstrapping is right for your small business, the following tips can help you through the process.

1. Get Creative With Startup Funds

It takes money – sometimes a lot of money – to start any business. So, your initial funding has to come from somewhere. But that doesn’t mean that you need to give away equity in your business or seek out external funding. During the early stages of your business, it’s possible to rely on credit cards and the personal savings of startup founders as you get things up and running.

When launching a bootstrapped startup, you may need to get creative. Design your business model so that you can quickly start selling services or products to establish cash flow. Taking the time to write up a detailed business plan outlining all of your expenses can help you better envision the expenses that will be involved, as well as the time it may take to pay off those credit cards.

2. Focus on Your Customers

When you’re working with limited resources, one of the best things bootstrappers do is focus on clients from the very beginning. Engaging with potential customers on social media can help inform everything from your marketing strategy to your product design and launches. The better connected your business is to your customers, the more aware you’ll be of what they’re looking for and how they’ll respond to your business, and products or services.

It’s equally as important to focus on providing effective customer service. When your business is willing to go above and beyond to create a positive customer experience, you can build customer loyalty as well as valuable customer referrals. Increased referrals can expand your business without increasing your marketing budget.

3. Consider Outsourcing

You may reach a point where your startup needs more team members, but you don’t have the finances or stability to hire anyone full-time. During this growth stage, consider outsourcing some of your work to talented freelancers or independent contractors. When you hire freelancers, you can often save money over the cost of hiring an actual employee, since you don’t have to pay into the Federal Unemployment Tax or worry about contributing to employee benefits.

If you decide to outsource some work, be deliberate and cautious in the process. Outline the types of work that you would like to outsource and determine the skills and experience that you would want to see in a freelancer. There are many platforms, like Upwork, where you can find freelancers, but this can be hit-or-miss in terms of finding talented, reliable help. Instead, try to network with other business owners to see if they have a favorite freelancer they would recommend.

4. Hire for Attitude

Chances are that your startup won’t have the funding to hire top-tier veteran talent, but when it is time to hire employees, hire for attitude, rather than experience. Aytekin Tank, CEO of JotForm, advocates for this strategy, and it’s paid off for JotForm.

“We’ve sort of adopted a belief at JotForm that we don’t necessarily hire superstars; we grow them. We hire for attitude and make sure we treat the standouts well with more responsibility and good pay. This has reduced turnover and kept our production consistently high.”

Look for potential employees who are invested in your mission, and who know how to bootstrap your startup too. They’ll be a powerful investment as they learn on the job, and bring genuine passion and hustle to their work.

5. Embrace Slow Growth

As an entrepreneur with an exciting business idea, it’s easy to get frustrated when you’re forced to grow your business more slowly because of limited funding. But according to Tank, slowing down can be a gift in disguise.

“We’re methodical about how we expand our team and add new products, and over time we’ve built something incredibly sustainable. We also always have a rule only to add new employees if we have the money to pay their salaries for an entire year.”

The forced slowed growth you’ll experience as you bootstrap your startup can make you more aware of how you’re spending money. And, you’ll become more deliberate and cautious in your business decisions. Taking the time to step back and evaluate each move can help ensure that your business is wisely built, encouraging its chances of being successful.

6. Be Patient – and Appreciate How it Helps

Finally, remember to be patient and relax.

“Bootstrapping is a long game,” Tank says. “So take time to unwind and appreciate what you’re doing so that you don’t burn yourself out. I’m much better nowadays at taking vacations and breaks at work. I also encourage the same from our employees. It keeps us more productive and fresh, not to mention preserves our sanity.”

Bootstrapping can take time, but be patient and enjoy the experience of building something great, all with your own funding.

What is The Bootstrap Process?

Stages for bootstrapping a business venture:

Birth-stage: This is the first stage too bootstrapping by which the entrepreneur utilizes any personal savings or borrowed and/or invested money from friends and family to launch the business. It is also possible for the business owner to be running or working for another organization at the time which may help to fuel their business and cover initial expenses.
Funding from sales to consumers-stage: In this particular stage, money from customers is used to keep the business operating afloat. Once expenses caused by normal day-to-day business operations are met, the rate growth usually increases.
Outsourcing-stage: At this point in the company’s existence, the entrepreneur in question normally concentrates on the specific operating activities. This is the time in which entrepreneurs decide how to improve and upgrade equipment (subsequently increasing output) or even employing new staff members. At this point in time, the company may seek loans or even lean on other methods of additional funding such as venture capital to help with expansion and other improvements.

Lastly

Bootstrapping companies, when seemingly doing the impossible, must constantly be looking for ways to improve their processes, even without hindsight or millions of dollars at hand. One area to take particular note of is the financial management of a growing company, as cash-flow surprises can be the-nail-in-the-coffin of a startup company. Sloppy practices and shortcuts will, at times, be disastrous.

When building a business from the bottom-up, it is always preferable to be prepared for anything, which is not impossible as seen by the number of successful bootstrapped companies surrounding us. Bootstrapping is likely to continue to be part of the history of many successful companies.