Bootstrap Your Way to Success!

Clark_802

Padawan
May 15, 2018
23
8
5
I was an aspiring entrepreneur without one of the common things entrepreneurs need: access capital. I had this idea for selling my own brand of hot sauce. It was a great idea, but a killer idea wasn’t enough. I needed funding to get the business off the ground.

I tried applying for loans and pitching to investors (I even considered auditioning for Shark Tank!), but nothing panned out. Most of the people I met preferred investing in businesses that were already running and turning a profit.

It was pretty discouraging at first, but I took it as a challenge. I started searching for ways to start a business without the help of outside investors. And that’s how I discovered the concept of “bootstrapping.”

Bootstrapping is a powerful idea. It inspired me to get up, get things done with little outside support. If you’re also looking to start a business, but don’t have a lot of money to invest, you’ll benefit from the bootstrapping mentality.

In this post, I’m going to talk about bootstrapping, and hopefully, it inspires you the same way it inspired me!

Bootstrapping, Defined

Bootstrapping refers to a situation where an entrepreneur starts a business with little to no outside investment. The term has its origins in the 19th century saying “pull yourself up by your bootstraps.” It implies being proactive and being self-reliant.

The term became famous when it got associated with various tech start-ups. Before venture capitalists descended on Silicon Valley, you would hear about gifted computer geeks “bootstrapping their business” in their parent’s garage.

When you “bootstrap a business” you’re funding your business from personal savings, credit cards, or small, personal loans. Sometimes, a bootstrapping entrepreneur may dip into their retirement fund, which is an extreme measure and should only be done as a last resort (if at all).

The Bootstrapping Mentality

It should be pretty clear by now that bootstrapping isn’t for everyone. While starting a business independently sounds appealing, in reality, it is hard, sometimes terrifying, work. And I gotta keep it real: there will be moments where you will doubt if the business can even make it to the next month.

I’m writing this not to discourage you, but to paint an accurate picture of the challenges you’ll be facing. To succeed in this, you must have what I call the Bootstrapping Mentality. People with the Bootstrapping Mentality are fiercely independent, resourceful, driven, creative, and willing to take big risks.

To effectively bootstrap your business, you’ll also have to do the following:
  • be willing to cut all non-essential expenses (and a few essential ones, too)
  • multitask; you’ll have to keep a lean workforce at first
  • streamline your business operations
  • be on the lookout for potential investors
  • stay optimistic, even when things get difficult
Bootstrapping and Creativity

I mentioned creativity a while ago, but I need to reemphasize it here. Smarts aren’t enough when bootstrapping your business. I think creativity, or the ability to think outside the box, is actually more important than smarts. Because when you bootstrap, you’ll have to solve problems with limited resources. Creativity is the key to solving those problems.

Let’s talk about my hot sauce business. I was having trouble getting supermarkets and food stores to stock my sauces. They didn’t want to commit valuable shelf space to an unproven product.

I was disheartened at first, but I had a eureka moment during an art exhibit opening. It seemed like people were spending more time at the caterer’s table than looking at the artwork (no offense to the artist). My big idea was to sell sauces through art galleries.

Most of the art galleries in my area showed contemporary art. This meant they weren’t uptight and were willing to sell interesting “artisanal” products. Most of them already sold designer toys, limited edition sneakers, and prints, so hot sauce wasn’t that much of a stretch.

Selling through galleries gave me yet another idea: commission artists to create unique labels and box designs. I didn’t have enough money to pay them outright. Instead, I offered them a royalty for each bottle sold.

It was risky, but it paid off. Since I was selling my product in a non-traditional space, I didn’t have to compete with other hot sauce companies. And since people were spending so much time at the buffet table, it was the perfect opportunity to hand out free samples.
Supermarkets and large retailers eventually warmed up (pun intended) to my sauces. But this was after the sauces gained a small but dedicated following among art gallery goers.

Selling hot sauces through art galleries is a textbook example of an out of the box idea. I doubt I would have come up with that idea if I had investors who insisted I sold our product the traditional way.

The Best Time to Start Bootstrapping

The best time to start was yesterday. But if you’ve never had the chance to start yesterday, the next best time is today. But starting doesn’t mean emptying your bank account and going all-in immediately. Getting a pencil and writing down the draft of a business plan can be considered starting. Googling how similar businesses operate can be considered starting, too.

It doesn’t matter how you start. Just start!

How to Start Bootstrapping

There are business books dedicated to the subject, and there’s more info than could possibly fit in this post. But I’ll give you a few basic pointers:

Be honest about your finances

You can be all gung-ho about your business idea, but if you’re deep in debt, or have significant financial commitments, you might be better off addressing those concerns first.

An honest appraisal of your finances will also help you fine-tune your business plan. How long can you sustain the business without turning a profit? How long can you wait for your return on investment?

Have a plan

Think of a business as a journey. You can have a pretty clear idea what your destination is (e.g. be a multimedia mogul!), but you can’t forget the beginning and middle parts. You need to plan how to advance from each phase of your business to the next.

These plans need to be as tangible as possible. For example, when I started out, my plan was “to sell lots of hot sauce.” That’s not a plan. That’s barely even a declaration. Fortunately, I realized soon after that I needed something solid and actionable. So created a marketing plan, talked to suppliers and plotted my journey to success.

Keep trying

Many businesses fail. But I think most of them shut down prematurely. I’ve seen a few good businesses close down, even when the owners could have given it one last try. They simply gave up.

I think losing faith kills more businesses than the economy. So keep trying. Even when you’re up against the wall, keep trying. Because nobody knows what’s coming.

When is the Best Time to Stop Bootstrapping?

This is a tricky question, and depends on your business plan. I think bootstrapping stops when outside money comes in. If part of your plan is to attract investors later on, then consider that your bootstrapping exit strategy.

But there’s a misconception I’d like to address. People think that with bootstrapping, you’re always in panic or starvation mode. While it’s true that there will be a lot of panic-filled moments during the early days of your business, you can be running a successful enterprise and still be considered a bootstrapper.

My hot sauce biz has grown a lot since those art gallery days. I now sell my sauces in some of the largest big-box stores in the country. To keep up with the demand, I employ a team of almost one hundred full-time workers.

But despite all that, I still consider myself a bootstrapper. That’s because I don’t have any outside investors. Don’t get me wrong; I wouldn’t have become this successful if it weren’t for my team. But our success was achieved totally in-house.

So I’ve never stopped bootstrapping, and I doubt I ever will.

The Verdict

Bootstrapping is a legit way to go about starting your business. It takes nerves of steel and lots of hard work. But that’ll only make success even sweeter!

Your Turn

This review is based on my own experiences bootstrapping my way to success. How about you? Have you started a business with little or no outside assistance?

Let’s hear your stories!
 
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Reactions: alexa_ot

alexa_ot

Padawan
May 18, 2018
28
6
5
Wow! Really in-depth information here. Thanks for sharing and definitely some solid advice
 

a_jerobon

Padawan
Jul 3, 2018
72
77
5
23
Kenya
This is lengthy advice to read but definitely very helpful especially if you have been stuck in starting a business.