How to grow a Bootstrapped Startup? | Everything about Bootstrapping Startup in 2020

Bootstrapping means to start and grow a startup from scratch without anyone's financial help. Bootstrapping Startups promotes innovations. Bootstrapping has become necessity for some startups.  A bootstrapped startup is responsible for its own survival. The growth of bootstrapped startup depends on the revenue obtained. When you bootstrap business, the focus is on ideas, innovation, and teamwork.

Bootstrapping Startups is a process in the business world by which a new business starts its operation without or little amount of external funding. Any bootstrapping entrepreneur must think of alternative ways to earn money to grow the business. It promotes proper utilization of time. Looking for investors might take a lot of time chasing them and its not a guarantee you will get funded by them. Money has to be spent wisely as the bootstrapping entrepreneur is the only one to control the business and resources are limited.

List of most successful bootstrapped companies
Advantages of Bootstrapping Startups
Disadvantages of Bootstrapping Startups
Advice for Bootstrapping Entrepreneurs
Tips for cost cutting and save funds for Bootstrapping Startup
Conclusion

List of some of the most successful bootstrapped companies

• MailChimp
• Github
• Shopify
• ShutterStock
• Zoho
• Wingify

Advantages of Bootstrapping Startups

Some of the advantages of bootstrapping your startup are:

Full control

The future of a bootstrapped business is determined by itself as it takes its full control. Owners are not answerable to any outsiders (investors) but themselves. Bootstrapped Business owners should have a clear direction of their own business. Their beliefs should guide them in the direction to take with their business. Sober decisions have to be made as this will determine if it will affect a business negatively or positively. Investors or any other money lenders come with their own vested interests and might give you different ideas from what you believe in. Bootstrapping startups works very well in such a scenario. There is freedom and you can run a business the way you wish. Bootstrapping removes unnecessary interruptions from outsiders and lets you focus on your goals.

Customer oriented and focused business

Bootstrapping Entrepreneurs need to treat their customers well because customers act as their bosses or investors. It is very easy for a bootstrapped business to die if the customers are not convinced to buy from that company anymore. If you are bootstrapped entrepreneur, think of your customer whenever you are making any move or decision with an aim to attract and convince them more and more.

Sustainable

Bootstrapping is considered a business model that is profitable. As business continues to grow, you gain more experience and sustainability. External funding cannot guarantee this. Startups that are externally funded might end up relinquishing in debts to a point of giving up. The business might end up not profitable to them.

Bootstrapping promotes efficient management of resources

Realistically, when you don’t have enough funds, you will be careful in spending any of them. This brings efficiency in terms of managing and spending the little cash you have into a meaningful sense.

Bootstrapping promotes creativity

Ideally, when you don’t have enough cash, you look for alternatives on how to sort out your problems. To make the ends meet, you will be required to identify the resources around you and make use of them. Bootstrapping makes you think of ways to get things done in a cheaper and affordable way, hence improve your creativity.

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Disadvantages of Bootstrapping Startups

Everything has two different sides. So, here are some of the disadvantages of bootstrapping a startup:

No Shared Risk

Investing in any business alone may attract a lot of personal risks especially when the business closes. If the business doesn’t make any profit everything will be lost. And the only person who will bear that all will be the founders.

Minimal Networking

Any business needs a lot of partnership so you may network. Capitalists and other investors have huge list of networks. Linkage creates opportunities for new market and makes you visible. Investors usually offer advice and full support required for any business. You may miss their expertise to run the business.

Slow Business Growth

Basically, when you don’t have enough money for start everything up from scratch, business growth will always be slow because you are operating with very minimal and limited resources. While bootstrapping your startup, you can only pace up with the growth when your business start making good money.

Advice for Bootstrapping Entrepreneurs

The idea of starting a new startup is fascinating, but in reality, it’s a tough nut to crack. There are numerous elements that should be considered before launching a startup and it’s a fact that 50%  of startups doesn’t survive a month. Launching startup needs a deep study of the product you are offering and deep market research is required.

Every startup needs a different kind of approach, but the general advice that a bootstrapping entrepreneur needs to enter the market are:

First sale, then production

The first and the important step to start a new bootstrapped business is to identify the market where you want to sell your product or service. It’s advised for Bootstrapped startup founders that first the market should be created before launching the startup. The demand for the product or service which you wish to sell should be examined and the product and strategy should be designed according to it. The 90% of the startups fail because they never assessed their market. The product that you are offering should be according to the preference of customers, not of your own choice. The customer is a king, so you need to sell what he wants to buy and not what you want to sell. This is a mantra for every startups.

Think hundred times before spending

It’s the harsh reality that startups have tight budgets. Bootstrapped startup founder should critically examine before making any purchase and try to avoid any unwanted expenses. The future of the startup is uncertain, so it’s best to save as much as you can for the future.

Go Virtual

The Internet is the biggest tool for the startups. Build your virtual office and save yourself from unwanted expenses on office rent. The different portals are available where startup owners can promote themselves and sell their products directly to the right audiences. The Bootstrapped startup founder can hire employees virtually to save the cost and pay according to the work. It’s a win-win situation for the bootstrapped companies and freelancers.

Select the right medium of advertisement

There are various mediums available where one can promote their product or service. But most of them are waste of time and money, as only one right medium of advertisement should be used according to the targeted customers. For example, if you offer services to the new business ventures then there is no need to advertise it on TV or radio. You need to visit business seminars and meetings to get the business venture opportunities. So it’s very important to select the right method to sell your services and product via the right advertisement medium.

Make books and follow regulations

The new startup owners should make themselves familiar with prevailing rules and regulations of the industry. The books of the accounts should be kept according to the law and it should be regularly evaluated by experts. This way, the entrepreneur can save money by not hiring consultants for everything.

Hire a business coach

Experience matters and to bootstrap your startup, seek the help of an experienced business coach, who can guide you at the time of crisis and provides all the technical knowledge. So ripe the experience of expert and learn something productive from them.

Tips for cost cutting and save funds for Bootstrapping Startup

Offering Discounts

Discounts should be small. You should focus more on starting and surviving rather than just acquiring customers. Offer the discounts only for a limited period and to selected people via competition or lottery. The people will be glad to get chosen for the discount opportunity and may promote your product among other people to show their own achievement. In this way, the money gets rotated and it can be saved for the further purpose.

Investing

For a bootstrapped company, the initial investment for the business should be savings. It should be the primary source of bootstrapped funding rather than taking money from family and friends. Entrepreneurs should estimate investment for the future. Higher Investments for the product or sales without assuming the demand may damage the economy. Depending on the supply of the product you should not estimate the funds required. The demand of the product should be considered more to decide the amount of investment.

Exact Planning

Avoid business planning for a vast reach of your company at the starting stage in order to save the money for the future development. The start should be local so that it costs less and make more profits. Once, you have your reach in your own area or city, then save enough funds and again bootstrap to start your service in other cities.

Estimations of buying products

You should estimate the assets you will need to start the business. If you overestimate, you will end up with useless resources and lose your money. If you estimate less resources, then you will have to waste your time to go and buy more assets. Estimations should be appropriate.

Spending money

While spending the money, the flow should be slow and steady. It should be maintained in the correct order that it should not affect the future economy of your bootstrapped company. The purchase of the goods or production should be kept limited in order to control finances.

Partnership

You can partner with another person so that he/she can help you with their expertise and share their savings with you. This way, you will share the risk with someone and both the parties will have lesser risk. However, getting a partner in a bootstrapped startup need trust. When you bootstrap, you put your everything in that company. And the partner have equal access to everything and can cheat you anytime. So, instead of asking random people online to become your business partner, find a trusted person from your friends and family.

Hiring

Hiring the staff in a bootstrapped startup is a very crucial activity. You don't have enough funds to pay the employees, neither the surety of success. So, hire only the enough amount of employees. Moreover, you should also avoid renting the unnecessary office space.

Suggestions

Don’t avoid others' suggestion of other people. They can help you take better decision. You can attend business events and talk about your bootstrapped startup to know their views about it.

Marketing

Marketing is the best investment for any business. Instead of going for expensive paid marketing campaigns, you can create content related to your company which can go viral. For an instance, Dollar Shave Club became famous after their viral video ad titled "Our blades are ******* great". Social media is a great place to get heard.

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Conclusion

Many Bootstrapping Startups become very successful. Their founders are careful and wise in spending funds and accountable for their decisions. They get business experience at every stage of their business growth. They also develop their own strategies on how to execute the business. They establish a customer base hence increase the sales. To start, bootstrapped startup founder requires an optimum level of dedication and hard work. So it’s advised to you all young ambitious entrepreneurs to make a leap and start your journey with a positive attitude.