What is a major problem to turn your well-thought idea into business? No external money to start the business!
So how will you overcome that? Do you quit your current job? Do you invest your life savings into your idea? How do you proceed?
Firstly, I strongly believe you really need to decide that you will go ahead with your idea. And for at least a minimal time of 1 year without looking into other professional activities. In our case I had in my mind that we need xyz small amount of money to go through our first year as a startup. We tried crowdfunding but it ”failed” financially (check previous post 27.03.2015).
Then what? Bootstrap! The self- sustaining process that you attempt to fund and start building your startup from your personal finance.
Some benefits :
- Maintain control over all decisions.
- Increase startup’s valuation.
- Learn to be frugal.
- When you pay your own money you learn faster and you spend less.
Personally, I took my pension money – something that is possible in Switzerland- and used them to start building our startup. Most people would say that I am very risky and a few would say that I am very confident. According to my DNA is confidence 🙂 In addition, the startup road includes many risks and you should be aware of that.
To achieve all that, you definitely need external support from your close family and friends. Meaning not to call you crazy of what you are planning to do and sometimes to offer you the drinks 🙂
However to go ahead with bootstrapping you mainly need:
- A detailed budget for the next months/year.
- A reduction of your personal expenses. You can still live if you go less times into bars & restaurants, if you reduce your holidays, if you buy less clothes etc.
- You also have shares instead of money. You can give shares to people that really can help your business grow, even if that means that you will not be the only decision maker. Again some people agree and some people disagree with this approach. It’s up to you!
What else… Network and find alternative solutions. We live in the years of internet. Check prices around the globe. Order online. Outsource. Negotiate offers for the tools you need to build your business. You are a young company and if you grow big you will appreciate and continue doing business with the business people that initially helped you.
When you run out of cash, use your brain and skills, find a way to do it yourself. Ask for discounts. 100usd is nothing for most businesses but for you is the annual registration fee of your website!
No-one does better something that you have in your own mind. Work your way around. You are an entrepreneur!
Finally, if you seek for investors, add your business proposal online, as we did. Eventually, it turned out into a good deal. Something that I will talk in my next post 🙂
How would you bootstrap your own idea into business?
ps: bootstrapping is not about self-financing and money, it is about how you make things work and how you react under difficult and stressful circumstances. Invaluable!