Image by: Adam Foster
By Michael Sterling
When you start a company, it’s easy to get confused by your colleagues as to how you’re going to get it off the ground. Though bootstrapping seems like a bad idea since it requires you to fund it all by yourself or with other members of the founding team, it’s not impossible. There are plenty of companies who have success this way.
The secret to bootstrap your way to success has less to do with business strategies and more to do with common sense and intuition. If you can balance a checkbook, trust me, you have the means to bootstrap. Here’s how you can get started:
Know What Costs To Cut
There are a lot of things to consider when building up your startup company, especially in its developmental stages. Although certain things will seem like necessities, a lot of them are dead weight you can neglect or negotiate.
- PR Firms: They often give seem like an investment to entrepreneurs, but no matter how many people say you need one, don’t believe them. Publicity is extremely important, but it’s also very expensive. Nothing can justify a retainer of $8K for an early-stage company, instead, do your homework and reach out to reporters yourself.
- Office Space: Office space can easily be found online and have great potential to be inexpensive. Websites like ShareDesk.net are created specifically for business owners to share work spaces. If you play your cards right, you might shack up with another visionary and make a great partnership down the road. GoToMeeting is another great way to implement employees or freelancers from around the globe.
- Transportation: Try not to fly as best you can. Obviously if your meeting is across country, you’d need to make adjustments – but don’t forget, it should all go to your flyer miles.
- Legal Fees: Lawyers can be easily swayed, believe it or not, as long as they know they will be getting money down the road. Negotiate a deal so that you won’t have to pay them until you raise seed or Series A funding. Many lawyers will provide discount advice you won’t have to pay for during the first couple years of getting your company off the ground.
Start On A Cheap Platform
It’s important to have a professional looking website or digital store front, but hiring an agency or design shop can be very expensive. Instead use inexpensive platforms like WordPress, for example, to get it off the ground. Websites like Elance.com and Freelancer.com will give you the ability to hire inexpensive talent to help you build content or programming needs.
*Tip: Freelance programmers or web designers are always looking for consistence work. They know that when they do a good job, you’re more likely to keep them for a while longer. Hire them based on your need, but most importantly, where their talent lies. This will keep their confidence high and the quality of work at it’s full potential.
Do What You Know
The majority of entrepreneurs are eager to be the next big thing that they jump on an idea too quickly. Though it seemed like an interesting prospect, they soon realize it was never their strong suit. When you know the service, you can also relate to it. This makes you more intuitive to the consumer’s needs. Here are a few examples of entrepreneurs who did just that:
- Braintree – Founder Brian Johnson had worked in the payment processing industry long before starting his company. He knew he could do it better than the competition and as a result, Braintree set high minimum fees for services which allowed him to draw the type of clients he wanted. Since 2007, the company has grown to only 30 employees, lacking the intense layers of management it might have had if it had sought investors.
- Goldstar – Being the world’s largest online seller of half-price tickets to live entertainment, founders Rich Webster, Jim McCarthy, and Robert Graff only started with $1000. Being avid supporters of the arts, the trio was angry that venues weren’t able to sell tickets to unmarketable shows. By focusing on popular undersold shows, the company now has over 1.5 million subscribers and offers over 900 tickets to events at one time.
- Plenty Of Fish – Markus Frind founded one of the largest dating sites in the world from his own apartment. Having worked for a few tech startups prior to the sites launch, Frind knew how to program and start an online company already with very little help from outside programmers. With zero help from investors, the site is worth over $1 billion according to ReadWriteWeb, and has hundreds of million in revenues.