Start a Business During the Pandemic Using These Six Effective Bootstrapping Tips
Yes, you can start a business with little to no capital. Even during a global pandemic. Here are some tips to help.
Many first-time entrepreneurs believe they need a large sum of capital or a heavily-funded investor to start a new business. Contrary to popular belief, the majority of businesses are started without investors or a large bankroll backing them.
In college, I started a service-based business that focused on driving highly targeted leads through social media. I bootstrapped the business from day one, scaling it over five years, and eventually selling it in 2016.
There are many advantages of bootstrapping, and while you might experience faster growth with a large sum of funding upfront, you also take on financial risk — as well as stress — and you are often left with a much smaller ownership stake if you bring on outside investors.
Bootstrapping allowed me to scale my business without the stress of debt or pressure from investors, and when it came time to sell the business I was the sole owner as I retained 100 percent of the company.
Current economic times, fueled by the global pandemic, has resulted in many new businesses being started. Some have started due to necessity and others have started because of increased personal time to create a more desirable, and dependable source of income.
It’s very possible to start a business today with little to no money if you commit to bootstrapping. Here are six tips to help you scale a successful business without accumulating debt or taking on an investor.
1. Build a Business Around Something You are Wildly Passionate About
Having spoken to so many new entrepreneurs across different industries, I see many with the wrong mindset and thought process. They focus on the money — starting a business around what they think will make money.
Instead, you should focus to build a business around something you are passionate about and have a high level of expertise in. For example, if you wanted to start a podcast and monetize it through ads, you would want to pick a niche that you were extremely passionate and knowledgeable about.
While cryptocurrency is currently a very popular topic, it would be very difficult to publish quality content without a deep understanding of the industry. On the other hand, if you are an experienced house flipper, you could create a podcast that features tips and helpful information. Your passion and expertise will result in content that provides value and from there your traffic, audience size, ad impressions, and revenue will scale as you continue to create content.
Starting a new business is a grind in the beginning — long hours and a lot of tedious work are required. You will stand a much better chance of making it through this stage if your business involves something you truly love and enjoy.
2. Launch ASAP: Perfect Doesn’t Exist and Mistakes Will Happen
A very common mistake many first-time entrepreneurs make is waiting to launch until they feel everything is perfect. I can tell you from personal experience that there is never a right time to launch — “100 percent ready” is a fairytale scenario.
It doesn’t matter what type of business you start — there will always be things that need to be tweaked and adjusted. The sooner you launch, the sooner you can identify the areas that need to be fixed and addressed.
Spending too much time trying to perfect every little detail before you even truly know what areas of the business needs work is a complete waste of time. You are going to figure a lot of things out as you go, and some of the best business experiences happen this way. The insight and feedback you receive by working in the trenches cannot be duplicated by anticipating or guessing.
You will make mistakes. There will be issues that arise that require you to deal with them — and you might encounter a fire or two that you need to put out. This is all part of the journey, so embrace it. All of the most valuable knowledge I’ve gained as an entrepreneur came after I launched a project and was still trying to figure everything out.
3. Avoid Debt at All Costs
Debt can cripple your business before it has the chance to get off the ground, and the stress it causes you as a business owner can be as equally crippling. When you start to accumulate debt — credit cards or lines of credit — your focus will often be pulled away from your business.
Instead of focusing on growing your business you become consumed with servicing the debt and staying above water. Sure, debt can be used strategically and in some situations, it can help lead to faster growth, but when you are just starting out and trying to validate your business idea, racking up debt isn’t the best route to take.
When I started my first business, I contemplated taking on debt in the form of business loans several times, as I thought it would allow it to quickly succeed. Instead, I decided to shift my focus on developing a growth strategy that generated enough revenue from sales that it needed to scale. This brings us to the next point below — focus on sales.
4. Understand That Sales Cure 99 Percent of Problems and Issues
In order to successfully bootstrap a business that scales, you need to hustle for every sale. I know from experience that the first 10 sales are the hardest. Be scrappy for every sale. When you are just starting and your business is new, your target customer doesn’t know who you are.
You have to find that potential customer and show them why they should trust your business and give you a chance over the other more established options. If this means hitting the phones yourself and kicking down doors to get in front of the right people, do it.
You have to be willing to put in the effort. Furthermore, many people will respect the effort and give you a chance based solely on that.
“Number one: Sales cures all. There has never been a company in the history of companies that has ever succeeded without sales. Anybody who has ever told you, ‘Don’t worry about sales you can grow it and worry about sales later,’ they are lying to you.
“They will fail, you will fail. You have to be able to sell and do you know who the biggest salesperson in your company has to be? You.”
This is one of my favorite quotes by Mark Cuban. It’s spot-on. When you have sales — and make sales the top priority — you will avoid many issues and problems, and if they do arise, you can quickly cure them.
5. Be Willing to Wear Every Hat
When you are starting a new business there are multiple roles that you will need to handle, from marketing and sales to accounting and customer service. When bootstrapping, you want to roll over as much revenue back into growth as possible, so that often means holding off hiring employees.
So, who is going to handle all of these roles? Who is going to reply to customer service requests? Who is going to map out and execute the marketing strategy? Who is going to be the top salesperson? The answer: you.
When you embrace juggling several roles and wearing multiple hats it’s much easier to handle the workload. If there are aspects of the business you despise and dread, you are going to have a difficult time.
I’m not saying that you have to love accounting, for example, but you do have to be willing to handle it until the business is at a level where outsourcing specific tasks make financial sense and won’t add unnecessary weight and stress on your shoulders.
6. Negotiate Everything (Accounting for Every Penny In and Out)
Every penny saved on expenses, from inventory to marketing costs and software, is money that can be used to grow your business. Negotiate everything — every service or product you pay for.
Ask for a discount or see if they have any discount codes or offers that you can take advantage of. Every business wants to attract and retain new customers. You will often find that if a company sees a potential long-term relationship with your business they will extend some kind of money-saving offer to you.
But, you will never know unless you ask. Be relentless — when you deploy this approach across your entire business the savings can be significant. A new business can leverage savings — even if it’s just a few hundred dollars a month — and funnel that extra money into more advertising, which leads to more sales.
Aaron Irmas is the founder of Deliver, a Los Angeles-based agency that creates custom marketing solutions for startups and brands. Aside from marketing, Irmas is passionate and heavily invested in cryptocurrency and sports cards.
