5 Steps To Bootstrapping Your Startup
In these current, unstable financial times, many people like you are choosing to bootstrap their startups. Maybe you finally want to build upon the great idea that you have, or maybe you’re fed up of working for someone else and would rather go it alone.
One of the key issues with setting up a bootstrap startup is how to get your company to turn a profit when you have very little money to begin with. Unlike many other startups, you have a small budget and you might not have the right contacts to get an angel investor.
This doesn’t make your task impossible, though. Your goals are still achievable but being a bootstrap startup means that you have to think smartly about what you do from here on out. Read our guide below for more information on you can bootstrap your startup.
1. Figure Out Your Financials
Those who have set up bootstrap startups of their own will probably tell you that the first weeks or months of your company’s existence are the most stressful. You’ve taken a big leap of faith here and now you need to figure out how to make some money, lest your business falls before it’s even gotten off of the ground.
Before you take the steps to set up your startup you should figure out where those first pounds, dollars or euros are going to come from. For example, are you going to continue your day job? Do you have a savings fund? Can you ask your parents, friends or other family members for help?
You’ll need to figure out an exact number (with a detailed breakdown) of how much you’ll need to initially fund the startup as well as a fund for emergencies. Bootstrap startups don’t have a huge safety net of cash to fall back into as larger startups or bigger companies do but you can help to eliminate the risk of failure by planning ahead.
2. Where Are Your First Customers Coming From?
You’ll also want to think about how your company is going to get its very first customers.
One mistake that startups often make is that their ideas are too general, they don’t solve a problem or they try and go up against their biggest competitor straight away. As a bootstrap startup you need to think more carefully about your first steps into the business world.
Under The Lean Startup method, startups should look to cater to their first customers in order to be successful. To figure out their needs you should look at what your competitors are doing wrong and redefine your USP (Unique Selling Point) to improve upon that.
For example, if your competitors’ apps don’t provide enough information, how can the content in your app become more comprehensive? Can you include a glossary? Or a bumper resource pack that offers eBooks and images that users can save directly to their phones?
Bootstrap startups don’t have the luxury of being able to set up a huge marketing campaign so this is the best way for you to find customers as they will already be looking for your products and services.
3. MVP
Once you know how your startup is going to be funded and you know exactly what you need to get those customers, it’s time to go about releasing a product. The first step towards this is an MVP (Minimum Viable Product) as it allows you to see if your idea works and what can be done to make it better.
The problem with an MVP is that you need someone to develop it and if you don’t have the technical know how, or simply don’t have time to do it by yourself, you’ll have to find another way. As hiring an in-house development team is going to be expensive (especially for a startup that needs to keep the costs down) it’s a good idea for you to outsource instead.
Using an outsourced development team is beneficial for multiple reasons as not only does it free up your time (and lets you do other, vital tasks) it is also immensely affordable too. Development teams that use Agile project management (such as our team here at EL Passion) are the best choice for a bootstrap startup as your MVP will be built quickly and you won’t have to wait long for a tangible product. Given that bootstrap startups have to work quickly to prevent other competitors from moving in on their market share, that’s incredibly important.
You will also want to think about hiring an outsourced team with experience as their knowledge of the industry can prove invaluable to those who are new to the software world. Furthermore, it’s a good idea for you to choose time and material pricing over fixed contracts as fixed contracts can quickly deplete the budget of a small, bootstrap startup.
4. An Efficient Workforce
You have to think very carefully about your hires. You can’t hire 100 or so employees right off the bat as you just won’t be able to afford it, so figure out who you need right from the start and who can wait further down the line.
If you’re outsourcing the product development, you’ll need people to help out with other aspects of your business. Some suggestions include someone to help market the product, someone to help keep financials in check and perhaps even a co-founder.
You should hire a marketing person much later down the line (or have them work less in the beginning) as the real marketing push will happen much closer to launch. A financial officer will be able to suggest ways for you to boost your income and cut down on costs and so even if you only hire them as an advisor (and offer them equity as a salary) they are important too.
As for a co-founder, you may want to bring another person on board to ping ideas off of or to help do the tasks you already do. But remember; whoever you hire must have the same drive and belief in the product as you do.
5. Stay Focused
Finally, you need to stay focused. When you go from a stable, salaried job with benefits to a startup that is suddenly having to cut costs to establish itself, it can be disheartening. It may also be stressful as you strive for success but you need to remember not to give up.
Being a bootstrap startup provides big benefits as you’ll finally be putting your brilliant ideas into motion. If you stay focused, try hard and keep pushing for that end goal of success, you’ll do just fine.
