SCORE Tip of the Week: 4 Ways to Bootstrap Your Startup
SCORE's CEO, Kenneth R. Yancey, gives advice for those seeking to start on a business on a budget.
So you want to start a business, but you don’t have hundreds of thousands of dollars to put into the launch? Getting a bank loan or attracting investors aren’t your only startup financing options. Try doing what most startup entrepreneurs do—bootstrap your business.
Bootstrappers start on a shoestring and put all the profits of the company back into their business. This is smart because you don’t owe anyone anything and you don’t have to give up ownership in your business. Here are 4 ways to bootstrap your business.
- Tap into your existing resources. Do you have savings or anything you can sell to raise money for startup? This could include “toys” such as a boat or motorcycle, collectibles, or CDs or other savings you might have stashed away.
- Look for low-cost business ideas. Due to technology today you can run any number of businesses from home, drastically reducing overhead. Service businesses in particular generally require less startup funds, since they don’t require investments in inventory or a lot of equipment?
- Start part-time. You’ll need money to live on while starting your business, since you won’t be bringing in a lot of revenues right away. If at all possible, try to keep your job while you get your business off the ground, and work on your business nights and weekends. If that’s not realistic, look for a part-time job. (Just make sure you don’t work on your business on your employer’s time, or you could get in hot water.)
- Be penny-wise. Know what’s important to spend money on and where you can save. For instance, if you’re starting a graphic design business, you’ll need a computer with plenty of power and up-to-date software, plus an impressive website to show off your skills. But you won’t need a fancy office or expensive furniture since you can most likely work from home and meet clients at their locations.
Try these tactics and, as money starts coming in, reinvest it in your business to keep it growing strong.