The glamorous world of high-flying startups with dizzying valuations is out of reach for most entrepreneurs. Without the right contacts, connections, business network or past results, how can most business owners expect to raise large amounts of capital and set their sites on a horizon filled with terms like “Series A”, “IPO” or “unicorn”?
The truth? Most entrepreneurs don’t go that route. They bootstrap. They raise the capital they need through their own means and channels. Is it easy? Definitely not. If you don’t have an income that supports you or if your debt outpaces the money that comes in month to month, your hands might be tied.
However, the best route for building up a business is to bootstrap it. But, what is it mean exactly? What is bootstrapping? We’ve all heard the term before. But, how many people truly understand what it means to bootstrap a business and take it from nothing to a substantial and well-established money-making machine?
Not many. The facts? Most businesses fail. After each consecutive year, less and less are left standing. That might be why so many people are envious of those who actually make it. The question? What separates the proverbial winners from the rest? What allows someone to bootstrap their business to success while others falter and fail?
Wikipedia refers to the term bootstrapping as “a self-starting process that is supposed to proceed without external input.” In business it means starting up “without external help or capital.” It means self-funding through pre-existing cash flow and being critical of outgoing expenses.
How to bootstrap your business.
Having a viable business idea is one thing. But, actually getting out there and building a self-sustaining, self-funded business is an entirely different thing. You need true grit. Determination. Blood, sweat and tears don’t aptly describe what you’re in for. But, how do you go about doing it? How do you bootstrap your business?
Sebastian Guthery should know. He bootstrapped a successful business selling Kratom, an herbal supplement that helps ween people off of harmful opioid addictions. Took it from a mere concept and thought to a booming sixty-employee, $20-million-per-year business. And he did it on his own. No bank loans. No venture capitalists. None. It was him. Working away. Slaving from nine to who-knows-when-at-night. And in the process, launched a non-profit as well.
Was it easy? Absolutely not. He’s faced a number of challenges as he grew the business. But, he did bootstrap it. All on his own. No outside help. No outside influence. No injections of capital. Not a single dollar. As a fellow entrepreneur, I wanted to know how he did it. Guthery tells me it all boiled down to eight strategies that he could pinpoint. Strategies that truly made the difference, allowing him to propel forward.
1. Take action daily and don’t be afraid to make mistakes.
Too many people face analysis paralysis. It’s easy to overthink things. Especially when you’re filled with fear and what-if scenarios. What if you leave your job and startup your own business? What happens if you fail and can’t pay the bills? What happens if you have to cower back to your life-sucking 9-to-5 job?
The cure to the fears that plague your mind? Take action. Guthery says that you shouldn’t be afraid to make mistakes. Power forward. Day after day. Even little gains can add up to big results over time. Try not to over analyze things to death. Just put in the sweat equity. Don’t focus on the long term. Strive to hit daily short-term goals. That’s it.
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2. Make sure you’re passionate about what you’re doing.
Guthery developed a passion for his business along the way because he saw the benefits it had on his customers. He heard the feedback. The rave reviews. He knew that what he was doing was helping others. It helped them battle their demons and fix potentially lethal addictions. That’s where his passion was born.
He says that you have to be passionate about what you’re doing. Otherwise, you’ll easily throw in that proverbial towel. You’ll call it quits. Give up. Say, I’m done. I’ve had it. That’s it. Never again. But, if you’re passionate. And, I mean, deeply passionate. You won’t give up. There is no turning back. No retreat. No surrender. The only pathway is forward.
3. Don’t borrow money if you can avoid it.
Guthery says that you should go it on your own. There’s nothing worse than owing people money. Especially friends and family that lend you capital to start your business. If you have to, max out your credit cards. But, don’t rely on others to give you the cash that you need.
Before even starting your business, you should be saving. Save up what you need and strategize on what it’s going to take to bootstrap your way to success. Whatever it is that you think you need, you’re going to need more. So don’t sugarcoat things. Take an honest look at what it’s going to take. Then pull out all stops to get there on your own.
4. Hit the phones and knock on doors.
You quite literally have to hit the phones and knock on doors. Get used to people saying no. Get used to having the phone hung up on your face or the door slammed right in front of you. Get used to the rudeness and crass that you’re likely going to experience. But, for every 10 or 20 no’s, there’s going to be a yes. And that’s what you focus on.
Guthery built his business one phone call after the next. He figured out the ailments that Kratom could treat, and he approached everyone he could find to sell his product to. It didn’t happen overnight. It was years of grinding. And he says that you shouldn’t be afraid to do that. Especially on your own. And especially in the very beginning.
5. Surround yourself with driven and successful people.
Joe Polish, one of the best business networkers in the world, is surrounded by people who are playing at the top of their game. Polish knows a thing or two about building up a powerful network of successful people. And Guthery feels the same way. You can’t expect to hang out with losers and make any progress.
People, especially those that are stuck in the status quo, will tend to want to see you fail. That’s just the honest truth. Don’t surround yourself with them. Find successful people. People who are playing at another level. People who know what it takes to go from zero to hero on your own. You should never aim to be the smartest person in the room. Never.
6. Accept that you’ll wear many hats.
In the beginning, you have to do it yourself. Everything. Don’t be afraid to do that. You’ll need to do the sales. And the customer service. You’ll need to manage inventory. Deal with refunds. Handle manufacturing. Complaints. Partnership requests. Accounting. All of it.
Don’t be afraid to do that. Don’t ever think that you’re too good to do any of it. If you think that way, you’ll likely fail. You can’t play that card and expect to bootstrap your business. The alternative is pricey. Have a great mentor by your side, but go it alone. Do everything you have to do to get yourself to where you want to be.
7. Negotiate everything and never take things at face value.
Don’t ever be afraid to negotiate. The truth is that everything can be negotiated. Everything. If you take things at face value, you’ll never realize just what you can shave off the price. Guthery says that he’s negotiated the price of nearly everything. From office space to cost per unit of raw ingredients. Literally everything.
The difference adds up. And when you’re bootstrapping, every extra dollar counts. You might not see it in the minute interaction that occurs from day to day, but it’s there. Keep careful track of your expenses no matter what. And especially ensure that you’re getting the best possible deal on whatever it is that you’re buying or signing up for.
8. Have fun doing whatever you’re doing.
Guthery says that whatever business you’re in and whatever it is that you’re doing, have fun doing it. If you’re not having fun, then you’re wasting your time. Yes, bootstrapping a business is hard work. But, it should also be fun. If you’re passionate about it, then you should in some way or another be enjoying the journey rather than solely focusing on the destination.
Remember, this isn’t a 9-to-5. It shouldn’t be the doldrums. It should be enjoyable. You’re building a business. A future. Something that you can pass down to your children. Possibly something that will last for generations to come. Enjoy it. Revel in it. Work hard, but have fun while doing it. That’s the ticket to bootstrapping your way to success.