Starting a business from scratch can be intimidating, but according to Entrepreneur Magazine, more than 550,000 people do it every single month. And a popular way to do that is by bootstrapping, or starting a business with very little or no capital. We won’t lie and tell you it’s easy, but the bottom line is that it can be done. All it takes is some creative thinking, frugal planning, and a few of these helpful tips.
Use free marketing
It’s often said that word-of-mouth marketing is the most powerful advertising tool you can use. And in the day of social media, you have a plenty of ways to generate that for free. You can use Facebook, Twitter, Pinterest, Instagram, and YouTube, just to name a few, to generate leads and spread the word. And you can ask your social media connections to continue to share your message. Of course, the best way to get them to pass it on is to convince that them your service is share-worthy, which might mean giving away your services to a few Tweet-frenzied friends.
Do your homework
The sad truth is that nearly half of all businesses fail during the first year. And one main reason for this is that the business owner doesn’t investigate the market. Don’t jump into a business with blinders on unless you are thrown into a situation where you don’t have a choice. Do tons of research and talk to other people who run the same types of business. And if you have a steady income, test the waters with your business before you make it your full-time venture. Put in the work after hours until you replace your income consistently every month. In addition, take courses to educate yourself in your particular field. A lot of entrepreneurs make residual income by selling online courses teaching you their business models. Do a little research to make sure they’re reputable. Then, take advantage of all you can afford.
Know your financial obligations
Don’t find yourself at the end of the year owing Uncle Sam everything in your account. If your business is making a profit, you need to speak to an accountant ASAP. Your best bet is to find one who specializes in your type of business, such as an ecommerce accountant who fully understands the ins and outs of entrepreneurial endeavors and online business.
In the beginning, you will want to avoid getting into debt. The whole point of bootstrapping is to make a little money, put it back into the business, and repeat. Start as small as you can and keep turning a profit until you are soluble enough to take a draw for a salary.
Know your legal obligations
You may think hiring a lawyer is a frivolous expense, but anyone who has encountered legal issues with their business will strongly disagree. You don’t have to keep an attorney on staff, but it’s important to set up a meeting to talk to one as soon as you can. You’ll need advice on matters such as trademarking, incorporating, contracts, and more.
This is especially true for a service-based business. With so many entrepreneurs starting businesses every day, your competition is fierce in almost any industry. Find a way to distinguish yourself and your product by going the extra mile. Overdeliver, offer add-on services, and always be on time. Your clients will appreciate your integrity so much that they won’t even flinch if you have to raise your rates in the future. Not to mention the fact that they will be extremely unlikely to ever hire a competitor.