Capital definitely opens doors for entrepreneurs looking to start and grow a business. But it doesn't necessarily need to be a barrier to entry.
Many entrepreneurs choose to bootstrap their businesses, investing some of their own savings into it or starting out with just a website before all the pieces are in place.
However, in order to make bootstrapping work, you need to be scrappy, ruthlessly prioritizing your actions and avoiding non-essential expenses (tools, hiring, office space, etc.).
What is "bootstrapping" in business?
Bootstrapped business owners make up for what they lack in resources with resourcefulness.
Bootstrapping is an approach to starting a business that involves using your own resources to start up. No loans, no traditional fundraising, no external capital.
In exchange for complete control over your business, you also assume all of its financial needs, and that means being extra strategic about how, when, and where you invest your money.
If you’re bootstrapping your business or considering it, here are some tips, tools, and resources to help you out.
Validate your business idea before you invest in it
Before you start putting time and money into your business idea, it’s good to confirm its potential.
This doesn’t need to be a long, drawn-out process that keeps you from starting. It’s simply about ensuring you’ve gone through the process of proving that there’s a real audience and market for what you want to do.
If you have a clear idea of what you want to sell and who your target audience is, you can quickly test your hypothesis by setting up a landing page and driving traffic to it. Even if your product isn't ready to ship, you can gauge interest through email opt-ins, whether people added the product to their cart, or even tried to purchase it.
Check out 5 Strategies to Validate Your Product Ideas for more inspiration!
Start with dropshipping for a low-cost, low-risk business
If you don’t have a product idea yet, and are looking for a way to start a business without risking your money on buying inventory that might not sell, consider working with a dropshipper.
Dropshipping essentially means that product, shipping and fulfillment are the responsibility of a third party supplier so that you can focus on getting customers.
Why would anyone buy commodity products from you? Because you can market it better and be there first for your customers.
The great thing about dropshipping is you can always graduate from it to eventually create and ship your own products, once you’ve proven the potential of your brand and niche or build an audience.
Don’t stress over your logo in the beginning
A logo is the face of your business and that makes it important. But it’s less important in the early stages when there’s not a lot of people to see it or remember it.
A unique, professionally designed logo set can run you a few hundred dollars. That’s money you could easily invest on gaining early traction.
Your logo is how people will remember your business. But it’s also something you can update down the road once your business finds its legs.
For more free logo makers, check out 5 Online Logo Makers to Design Your Brand.
Use this set of free tools
Larger companies use a much different, more expensive, set of tools and software than early startups because an investment in technology is usually an investment in growth.
But that doesn’t mean there aren’t powerful free alternatives for every occasion that can keep up with your growth or be easily swapped out in the future.
The following tools are free and offer more than enough to get you started:
- Email Marketing: Klaviyo (capture leads and send good-looking emails)
- Social Media Management: Buffer (schedule posts across multiple social channels)
- Business Development: Streak CRM (for scaling your outreach and cold emailing)
- Design: Canva (free design templates) and Pixlr (free Photoshop alternative)
- Accounting: Google Sheets
- Finance: Mint (track your cash flow)
- Productivity/Planning: Trello (capture ideas and organize tasks)
- Analytics: Google Analytics (understand your traffic), Hotjar (heatmaps and recording visitor behavior)
For even more free tools, be sure to also check out:
Keep a close eye on cash flow
In the pursuit of being profitable, bootstrapped businesses need to keep an even closer eye on cash flow.
It’s hard to find a balance investing in growth when you’ve got a ton of other business and personal expenses to manage and account for. If you’re not paying attention to your cash flow, your expenses can catch up to you—especially when they hit you at a bad time.
Learn more about managing your money in Why You Need to Stop Worrying About Profit and Start Worrying About Cash Flow.
Explore all your free marketing options
You’ve probably heard it said that you need to “spend money to make money”. But that’s not always true.
There’s a ton of free marketing you can and should explore, from social media to press mentions.
Here are just some of those strategies with resources to help you explore them:
- PR Outreach: Press mentions can be highly valuable if you can win them with a good story.
- Guerrilla Marketing: Getting out there into the world can help you get some free, early offline exposure for your products.
- Partnerships: Sharing marketing resources and audiences with other similar-sized companies can be a great way for bootstrapped businesses to help each other out.
- Content Marketing: If you have the time and talent, you can create videos or articles yourself that can help drive traffic and educate your customers.
- Organic Social Media: While paid advertising through social media is something you'll definitely want to explore, there's a lot of ways to drive unpaid, organic social traffic as well.
Take the 30-day First Sale Challenge—a marketing checklist for new entrepreneurs to explore free and paid ways to drive traffic.
Many businesses these days start off bootstrapped. Whether that means dipping into your own savings or launching a barebones business to minimize expenses until you generate revenue, it's about making the most of what you have.
By getting creative, you can keep costs down. By spending time, you can save money. And by being scrappy, you can find smarter ways to grow.