Bootstrapping a Business with 5 Easy Steps

Written by Allison Way on . Posted in Get Funding

In a less-than-perfect economy, it's hard to get the startup financing that you may need. There are many ways to raise capital; angel investors, venture capitalists, friends and family, debt financing, and finally...bootstrapping.

Wikipedia defines bootstrapping as "a self-sustaining process that proceeds without external help." When an entrepreneur uses this tactic to raise startup capital, he is pulling himself up by his bootstraps, digging into his own personal finances, and utilizing his savings account in order to launch a business. Here are five easy steps that any entrepreneur can use in order to successfully bootstrap a new biz.

1. Make Clients Pay Up Front
The key to business survival is cash flow, not growth. Therefore, make your clients pay up front for the product or service that your business provides. Allow yourself some time to create a billing policy that actually works for you and for your business. Create a plan that includes boundaries around time, money, task force, and one that provides a key message so that clients will pay up front even in a down economy.

2. Offshore Your Tasks
If your business needs a web developer, a writer, a designer...try to find a successful freelancer and offshore some of your tasks—and we don't mean to another country. Find freelancers or part-timers in your local area who can complete tasks and provide important services for you. Offshoring will save you time, and time is money. Staying away from hiring full-time and even part-time employees until your business finds success will be very helpful in avoiding large overhead costs and payroll headaches. Use freelancers instead when bootstrapping.

3. Don't Be Afraid to Ask for Help
Successful bootstrappers ask for help when they need it most. Bootstrapping often means using small business counselors, networking groups, mentors, and other entrepreneurs as informal advisory boards. Additionally, there are many nonprofit organizations that offer free assistance with incorporating, financing, and disaster preparedness.

4. Use Social Media
Social media takes time, but it's also a marketing/advertising strategy that is absolutely free—and if you're bootstrapping, free is in your budget. Try using social media avenues such as Facebook, LinkedIn and Twitter as if your business absolutely depends on it. Once you start using it this way, you will generate more buzz and eventually more customers, without spending any money.

5. Learn to Negotiate
Successful bootstrappers must know how to negotiate —with vendors, with clients, with suppliers, with freelancers, with everyone. Negotiate as much as you can. When people know that you are bootstrapping a startup, you may be surprised as to what they will offer. The worst that can happen is that someone will say "no", so what do you have to lose?

Don't be afraid to bootstrap your business. Just use these 5 easy steps when doing so, and you will have a greater chance of success. Good luck, bootstrapper!