Today was the day you hoped for as an entrepreneur, the day the investors make the final decision and agree to fund your small business. Except it didn’t quite go as planned, the meeting ended, doors closed and your small business was left without any funding. Small businesses face several struggles in their beginning stages, costs being one of them, the other is receiving funding from a bank. On average small businesses have an 80% chance of being rejected according to the Federal Reserve. It’s as high as 95% as reported by the CFIB in Canada. This results in the back-and-forth of weighing out growth opportunities, auditing finances according to ‘importance’, all while trying to keep your business afloat.
Generating profit is challenging enough for new businesses, and receiving funding is one way to counteract the pressure and costs of doing business. Starting a business without funding? What is the alternative to the traditional loan option? Bootstrapping.
Instead of relying on investments to fund your business, you figure it out on your own by pulling together all of your expertise and resources, and you make it work. It seems thrilling and risky, you are the one pulling together the funds little by little and reinvesting in your business until it becomes self-sustaining.
Critical First Steps to Remember
Step one:
Make a list of what you think you need, and think long and hard about it. Then compare it to a list of all of your start-up costs. Do you really need that brand new desktop setup, or will a year used one suffice? There are some items and aspects of a business which require a larger budget, no questions asked, but there are several ways to downsize. Be frugal with your money, and also with your ‘things’. Negotiating will become your best partner, so please, think again when that idea of redecorating your home-office pops into your head.
Step two:
Find and network with like-minded people, and businesses. Approach people who might be able to provide some advice or quick tips which you might be able to quickly adapt to your business. The least that will come out of it is that you will have a meaningful conversation with someone who now knows about your business. Increasing brand awareness isn’t a task that you always need to plan for. Are you scrolling through social media and see a business page which entices you from a content and business perspective? Contact them, send them a little message and ask if they have the time for a quick casual chat. You might even find someone to team up with as a partnership, or on a contractual basis.
Step three:
Give yourself a large helping hand and take a free online Digital Marketing course. This will save you a large chunk of your budget as marketing costs can get expensive. Luckily for you, I’ve done some initial research to save you some precious time, and will cover inventive ways to earn money which allow the most flexibility and innovation.
4 Inventive Ways to Bootstrap
1. Get Crowdfunding
With Crowdfunding, you have complete control of the content and marketing which you want to push. Crowdfunding is a type of micro-finance which does not require any payment from the business. However, you are more reliant on the general public to donate funds and monetary support for your business which can be just as risky. A popular website for crowdfunding a project or business is through Kickstarter.
2. Customer-based marketing
Marketing is the multi-faceted aspect of any business, which can either increase your leads or keep you at a stand-still. With marketing, you have to have a crystal clear of your target demographic, but in case you forgot, you are the founder and already have this noted in your business plan. Use social media to your advantage and get your message out there, engage with other influencers and businesses. By doing this yourself you have full control of your brand image, have direct contact with potential customers and save a ton of cash. Depending on the business and with enough exposure, there is also a chance to earn money through collaborations with complementary businesses or influencers.
3. Become a Coach
As a small business owner, the majority of your time is eaten up trying to accomplish both small and large tasks. Time is money, right? So whether you are just starting out, or just made it past your first-year mark, why not offer some guidance? Entrepreneurs and small business owners wear multiple hats, chances are you have more strengths in only a few aspects of business, rather than all. Get an intern who’s specialty is in an aspect which isn’t exactly your strongest suit. This will cut down some of the workload on the small tasks which eat away at your time.
4. Share your skills
As stated above, small business owners get their hands into everything, if you didn’t know how to do something before, you learned how. You have some valuable skills which others are dying to get a grip on. Sell them! Take a little of that spare time you have (since you hired that intern from above) and offer your services to others. It won’t take up too much time, and you can earn a little extra income. To keep things simple, create a guidebook and all you have to do is find the right platforms to sell your skills on (Thumbtack, Skillshare, Udemy) and you’re all set.
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Bootstrapping requires resourcefulness and detailed planning. If successful, a business is able to thinly stretch funds while strategically cutting costs and attaining a competitive edge. In my opinion, this is something female entrepreneurs have taken seriously and have been successful with. Women-owned businesses account for 51% of the firms in the United States, 39% of which are privately held. Statscan confirms that in Canada, 47% of all small-medium enterprises are fully or partly owned by women. Data from the Women’s Business Ownership survey states that almost all (99.9%) of the women-owned businesses are considered small businesses. These women entrepreneurs are able to contribute over $2 trillion USD in sales, so look to your female business entrepreneurs for some inspiration. The most crucial aspect of bootstrapping a business? You have to remain creative and determined, it isn’t an easy task but it can be done.
August Moone is a forward-thinking female entrepreneur from Colorado, she has eagerly bootstrapped all of her businesses and now advises startups and places small Angel rounds in them. August is technical, clever and has a profound knowledge of modern business solutions. Being such a dynamic entrepreneur, she is able to launch and lead large-scale projects and meet business goals with her dedicated action plans. Contact August Here – augustmoon5280@gmail.com.