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10 Ways to Fund Your Startup: Bootstrapping



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10 Ways to Fund Your Startup: Bootstrapping

Hello all and welcome to part 2 in my series on 10 Ways to Fund Your Startup from Angel Investors to Capitalists, Bootstrapping, Crowdfunding & Seedfunding and more! And in the last one I talked about how you can use the power of the crowd and use crowdfunding to start up your new start up with. In this part I'll be talking about Bootstrapping as a way to raise some, or even all of the funds your start up needs to get it off the ground and into the ether!

Bootstrapping

10 Ways to Fund Your Startup: Bootstrapping
So then, Bootstrapping. What is Bootstrapping? Well in its purest, most rawest essence, it is tapping into the funds that you already have available to you that you can use to put down as funds to help get your business idea up and running. Whether it helps in part, or in full. Or just enough to get you what you need (like products, materials, machinery, stationary etc) to get up and running in the most basic of ways so you can start making some sales and get cash flowing which you can then use to put back into the business to buy more stock with, products, tools, equipment, staff etc to help keep it ticking over like the well oiled machine it was imagined and invented, created and destined to be!

How to Raise Funds by Bootstrapping?

There are several ways you can bootstrap startups. First there's looking at what funds or capital you already have like personal savings, to even using credit cards if you have any that aren't maxed out!

Personal Savings
10 Ways to Fund Your Startup: Bootstrapping
You can make use of your own personal savings, if any, even borrow from a 401 or just your own paycheck from your regular job and use some or all of it to bankroll your new start up idea until you can get/earn/make enough money to keep things running without needing any more outside funding like this. The only problem with using your personal savings to fund your new startup idea is that if your startup flops then you will be out of your life savings. But it can also be very helpful without getting help from else where (loans etc) That's one reason why this is one of the most used methods of bootstrapping amongst entrepreneurs today and pretty much always has been by prideful people for that matter too!

Tip: Don't spend all of your savings on your startup and keep some back as an emergency as there's always going to be clients that don't pay first time, pipes that burst, things, break and need replacing that without your business can't run.

Credit Cards
10 Ways to Fund Your Startup: Bootstrapping
If you have them and your credit rating is good, you can use credit cards to buy the initial equipment and things your business will need and cover some setup costs too. You could save time and fees and interest charges by transferring the balance to other credit cards whilst you're waiting for those first paying clients and customers to come through. It can be risky doing this and using credit cards as a way to pay for those things, equipment etc that your startup needs to get running, and if it flops, you'll have to sell it all and pay it all back as you will anyway. But if you know it is going to be successful, and your credit rating is good, you can always turn to the credit companies and use credit cards to fund your startup, pay it back and the rest is profit!

Tip: You'll be personally responsible for paying off the balance in full on each credit card you use and the interest they charge you. But if done right, and your startup is successful, you should be able to pay these back each money until clear and improve your credit rating for it too.

Other Ways to Bootstrap
There are more ways to bootstrap than this. I've just provided above it's just those are some of the most chosen methods by people bootstrapping their business idea today. Some other ways are to;

  • Buy used equipment instead of new stuff to save some extra cash.
  • Rent or lease equipment instead of buying it to save more at the start but not over time.
  • Sell things like excess, old stock, equipment, machinery etc.
  • Barter with people as much as you can like Del Boy Trotter!
  • Establish and enforce strict credit collection polices.
  • Find out how to get free publicity and advertising without paying for it.
  • Do whatever it takes to generate some cash flow and maximise profit!
And that completes part 2 of this series for 10 Ways to Fund Your Startup: Bootstrapping.

Do you / have you bootstrapped your new startup or business?

What other ways to Bootstrap new startups are there?

Cheers!

Mike.

Comments

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Makefort

Another nice article Mike. I personally would avoid credit cards, but personal savings are not a bad idea. And for a startup, what you have written in other ways to bootstrap I would agree on everything. If you can offer quality serve on used or old equipment, there is no doubt that you will succeed. As for free marketing, just having some social media influence would be more than enough 10 Ways to Fund Your Startup: Bootstrapping And last but not least, are you sure anyone can beat the Trotter brothers? 10 Ways to Fund Your Startup: Bootstrapping




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idealmike

Yeah I'd personally put off using the credit cards as a last, last resort, when all else fails. Especially if you don't have any personal savings. And if your startup flops, you'll still have to pay them off. And yeah, social media marketing should be adopted as an absolute must since it's free to do that anyway but it's not always enough for some people unfortunately. And beat the famous independent Trotter brothers? Forget about it! lol 10 Ways to Fund Your Startup: Bootstrapping But if anything, they taught you the power of bartering with people. 10 Ways to Fund Your Startup: Bootstrapping




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kaka135

Thank you for sharing this. I didn't there's a term bootstrapping and that's how we can raise more funds to start up our business. I am going to check out the rest and learn how we can raise fund.




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idealmike

You're welcome that's the good thing about the SEOClerks Community FAQ. By just being on here you learn things you never even knew you needed to learn. Great stuff and good luck! 10 Ways to Fund Your Startup: Bootstrapping




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Tronia

Great post, Mike. Bootstrapping can be quite hard at the beginning. Looking for the required funds to start your business up and running isn't easy at all.

I'd really suggest that before you even begin you do your own research of the market and find a good way of getting quick revenue and some steady cash flow for your future business. I really like your idea of trying to get free advertisement. This is really useful and many people will be willing to do it if you can offer them something in return.

When it comes to bootstrapping you have be very creative to raise some money and never take no for an answer!




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idealmike

Cheers Tron! Yeah it can, and you're absolutely right. I couldn't emphasise that enough myself. Doing good and proper market research is absolutely pivotal and crucial to do so you know whether it's actually worth doing all these things or not! But one only has to look around them to see things they can take advantage of to their benefit. That and bundles of brainstorming, praying and blood, sweat & tears! 10 Ways to Fund Your Startup: Bootstrapping




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dancairns

Finding outside investors or lenders for a business that is still in the idea stage and has no revenue can be very challenging. That is why the most common route for entrepreneurs seeking OPM is to first approach the people they know best. So I set out to source seed funding from friends and family.




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idealmike

Right on! How did it work out for you? 10 Ways to Fund Your Startup: Bootstrapping




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overcast

It is really hard to sustain with bootstrapping business. Because your saving and expansion needs to be properly planned. And unless you can see that bootstrapping requires a lot of effort. You'd just end up wasting the funds in that case. I have found out there bootstrapping is lot harder there. Not all business can do that easily.




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Corzhens

I guess bootstrapping is a nice way to raise a budget for a start up. However, that only applies to those with passive resources. This reminds me of the days when I had my own start up. It was an offline boutique. I had the store constructed and didn’t know that budgeting for the construction is difficult. My budget was eaten for the bad estimates of the construction cost and I had to sell some of my jewelry. What if I don’t have that asset to sell? That’s a lesson that when you are funding a start up, you first have to check for your assets for a fallback in case you need more money.




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