When bootstrapping a business, you have to start with the mentality that less is more. You don’t need investors, a large team of creatives or an excessive amount of tools “just in case”. Instead, start with the basics, do as much as you can on your own and run as lean as possible until you have the revenue to scale.
Bootstrapping is a really great way to start a business as it teaches you to make wiser, data-driven decisions and to be more efficient in everything you do.
But how do you make sure all that hard work and perseverance actually pays off in the end?
In this post, I'm going to share some tips to help you get started with bootstrapping your business.
Tip #1: Use Your Own Savings to Start
While it’s true that you have to spend some money in order to start making money, it’s a bad idea to borrow money before you get things off the ground.
Because once you realise, “Hey, this friend was willing to spot me some cash so maybe someone else will” or “I can probably get another quick loan from this company”, you’ll get into the habit of looking for others to bail you out.
What you should do instead is figure out what you need to spend money on. Things like:
- Web hosting and domain name
- A business license
- Task management software
- Proposal and contract software
- Accounting software
You should only spend money on the bare essentials to start. Once you’ve totalled up those expenses, look at your savings:
Do you have the money to support those ongoing costs for a few months?
If not, you may need to consider some alternatives. One thing to do is to cut your personal spending as much as possible. This will help you put more money aside for your business. And if that’s not feasible, you may want to consider launching the business as a side hustle while you continue to generate income at a full or part time job.
Tip #2: Hold Steady on Your Budget
Once your business is up and running, it becomes even more important to tighten up the reins on spending.
Even as clients start to flow more steadily through the doors of your business, now is not the time to start adding more tools, moving into an office space or hiring an assistant.
Keep an eye on how things are going:
- Is your cash flow exponentially growing?
- Have your monthly earnings become more predictable?
- Have you had to put new clients on a waitlist?
It’s not just your numbers to pay attention to either. When you get to a point where you’re no longer able to get the job done as efficiently as possible, only then should you consider upgrading your expenses.
So, set a budget on Day 1 — for both professional and personal spending — and stick to it until it logically makes sense to revise it. (It should never be a free-for-all!)
Tip #3: Find Your Sweet Spot
There’s more to bootstrapping a business than being frugal. If you can make smarter decisions for your business now, you can fast-track your way to success.
That’s why one of the first things you should do is carve out your sweet spot.
The sweet spot is going to lie at the juxtaposition between:
- What you’re passionate about.
- What you’re good at.
- What the market needs.
Without all three pieces, you’re putting the longevity of your business at risk. You’ll also make it extremely difficult to get your bootstrapped business off the ground if there’s no passion, skill or need for it.
There’s going to be a lot of hard work ahead of you and you’ll need those motivators to keep you going.
Tip #4: Be Purposeful in Your Actions
In business, in general, you never want to throw your time away on meaningless activities. But it’s especially important to work with purpose when you’re bootstrapping a business. You have no time to waste, so you need to focus on activities that’ll move the needle.
A great way to do this is by using the Big Rocks Method.
Essentially, it’s a goal-setting exercise that forces you to prioritise tasks that are the biggest and most important for your business. By deciding what your big rocks, small rocks, sand and water are, you’ll never get distracted by stuff that may be easier to deal with but makes no significant impact today.
Tip #5: Document Everything
When you first start out, you’re probably going to wear every hat in your business. And it’s going to be that way for a while.
At some point, though, you’ll be looking over your cash flow analysis only to realise:
“Holy s***! My profits outweigh my costs… by a lot!”
And once you’ve sustained that kind of momentum and progress in your business, the first thing you’re going to be thinking is:
“Alright, who can I hire to make this ship run even better?”
But hiring employees and contractors can be a burdensome process in and of itself — one where you have to find and interview candidates, onboard your new hire and then train them on everything you’ve built.
You could wait until that day to start showing them the ropes. Or you can document every part of your business now — from client prospecting tasks to building websites. If you create your processes and document them starting on Day 1, it will be much easier to onboard new team members, delegate tasks to them and scale your business with great speed.
Tip #6: Don’t Compromise Your Worth
When your business is new, it’s natural to be full of doubt. It’s only going to get worse when you start broaching prospects about work, and they take the fledgeling age of your business as a sign of weakness.
“Could you do it for cheaper?”
You might feel inclined to lower your rates in the beginning or to work without a contract or strict invoicing schedule. After all, you need someone to hire you so you can start to offset your business costs (no matter how low they may be).
But there’s a problem with that:
If you start off with too-low rates, it’s going to be very difficult later to ask for more money. First, word will spread and others will inevitably want to work with the bargain designer/consultant/etc. Secondly, low rates hurt you, too. You’ll either:
- Believe that those dollar amounts are what you’re actually worth.
- Become jaded or resentful at your clients for low-balling you.
- Start to produce shoddy work because you’re exhausted from overworking.
No one wins when you compromise your worth — even in the early days of your business.
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Sign up for this free webinar and learn the secret to charging what you’re worth. Even on Day 1.
Tip #7: Create Recurring Revenue Streams
Whether you build websites, sell SEO audits or provide occasional consultations, there’s always an opportunity to supplement your income with recurring revenue. And rather than wait until later to establish these predictable revenue streams, you should work on setting them up ASAP.
One of the easiest ways to do this is by selling WordPress maintenance services. It’s a natural extension of the work you already do and it’s in high demand. What’s more, you can actually offload most of the work to maintenance providers and simply be responsible for the customer service piece of it.
If you want some more ideas on how to add recurring revenue to your business, check out these 18 ideas for turning your services into products.
Tip #8: Build Your Authority with Content
Even though you’re going to be busting your hump to try to make headway with your business, don’t forget to carve out time for marketing.
There are a ton of things that will compete for your attention at this time. Build this website. Call this prospect. Prepare this contract. And even though content marketing might seem low on your list of priorities, it’s one of the best things you can spend time on right now.
When you create content — I’m talking about thoughtful and useful content — you give people a reason to trust and recognise you as the authority you know yourself to be. Even better? With the more content you create, the less time you have to spend prospecting.
Your words will speak for themselves and the right kinds of clients will come find you as a result.
Just keep in mind that, although content is a powerful tool for the bootstrapping business owner, it can take a lot of time to create it.
Only spend time creating content that will make a difference. In other words, focus your efforts on getting the most out of a few pieces of really amazing content rather than produce dozens of so-so ones.
Tip #9: Find Your Community
When you listen to a lot of the stories on the Agency Mavericks podcast, you’ll hear business owners talk about how they struggled for years on their own. It wasn’t until they happened upon Agency Mavericks or the Blueprint that they realised how beneficial it was to be part of a community.
When you’re starting a business on your own, and you’re running lean, it’s going to be difficult to stay committed and motivated without guidance and support.
Finding the right digital community is helpful not just for the connection piece of it, but you’ll be inspired, too. Everyone has a different journey and destination, but that doesn’t mean that individual steps they took can’t be leveraged on your own path.
If you want to bootstrap your way to profitability, make sure you have a community who’ll propel you along.
How to Bootstrap Your Business to Profitability
Whoever said “You gotta spend money to make money” should’ve been more specific about what they meant. Because that sort of open mentality to spending money can actually do more harm than good:
“If I invest $2,000 in enterprise-grade software and a professional office space now, I’ll make boatloads of money in return.”
It doesn’t work that way. Clients aren’t paying you because of the shiny new tools you use. They pay you because you have an efficient and effective system that gets them results.
The fact of the matter is: spending money you don’t have on things you don’t need isn’t going to magically create those quality systems for you. In fact, it’ll probably do the opposite as stress and desperation take over.
So, as you jump into your new business venture, keep the 9 tips above in mind. Even though it might seem difficult now to run such a tight ship, bootstrapping your business will pay off in spades — and soon, too.
