HOW TO START A BUSINESS WITH NO EXTERNAL FUNDING

1. The gospel of bootstrapping
By
Angela Ihunweze
The gospel of bootstrapping

2. What is bootstrapping
Bootstrapping in business is to start a business without
external help/capital. Startups that bootstrap their business
fund development of their company through internal cash
bootstrap their business fund development of their
company through internal cash flow and are cautious with
their expenses. Generally at the will be set aside for the
bootstrap process.
It means using your own resources and effectively
managing your cash flow1 to internally generate the funds
that you need to operate your startup or relatively new
business.

3. Reorganizing your business for
bootstrapping
Start A Service
Service businesses generally require less startup capital than product
based businesses and you can bring money in right away.
Figure Out What Makes The Most Money
Don’t spend time doing the things that don’t bring in money. As a
startup you need money in the door as soon as possible! Defer,
delegate, or ignore the rest.
Get Volunteer Help
High schools and university undergraduates
Hire Part Time
Get someone to do the admin tasks for your business on a part time
basis. You don’t have to hire full time until you have more money
coming in. The first person I ever hired was working for me one hour
per day to start.

4. Reorganizing your business for
bootstrapping Part 2
Automate
Even better than hiring someone is automating your tasks! Think about what
you do repetitively and find a way to make it more automatic. It will save you
time and help you avoid having to take on a staff member’s salary. Automate
the regular and humanize the exception.
Form Partnerships
Find businesses who also sell to your customers and form partnerships with
them instead of spending money on costly advertising.
Leverage The Media
Choose a hot topic the media is covering and present yourself as an expert. The
media is always looking for people to comment on the day’s issues so you’re
making their job easier if you have valuable information to share.
Think Big, Start Small
Have a big picture plan but get started today. Remember that little steps lead to
big steps and before you know if you’re a success! Entrepreneurs tend to
overestimate what they can do in the short term and underestimate what they
can do in the long run.

5. Reorganizing your business for
bootstrapping part 3
Do Something Every Day For Your Business
Even if it’s answering one email, sending out one press release, or commenting
on one blog, do something every day to help you move forward. Never let the
business building momentum die.
Don’t Quit Your Day Job Until You Can Afford To
If you quit to go full time and then run out of money six months later you’ll have
wasted the opportunity to really build something great because you didn’t have
enough time. Start off slowly and make sure you can support yourself before
jumping in full time.
Turn Everyone Into A Referral Partner
Your friends, family, suppliers, customers, investors, etc all have the ability to
refer business to you. Let them know that you’re looking for new clients and
that you would really appreciate their help. You can even offer a financial
incentive for them to help you out.
Watch Your Payments
Try to extend your payment dates for suppliers and also get money more quickly
from customers. Starting a business is a cash-flow game so get money in as
quickly as you can and pay it out as slowly as you can.

6. Reorganizing your business for
bootstrapping Part 4
Start At Home
Don’t expand your business and get an office until you’ve proven the concept
working from home and are sure you have a revenue base to support yourself.
Share Your Office
Once you are ready to move out, try to share an office. The first office I had was
just a desk out of someone else’s office. Once I had enough money to expand, I
got my own place.
Barter
Can you trade what you’re selling for something you need? If you’re an Internet
programmer, for example, and need business cards, can you design a website
for a printer in return for the design and cards that you need?
Lease Don’t Buy
In the long term it might cost more to lease but it helps with your cash-flow.
When you’re faced with making a major purchase like a computer, car or other
equipment, lease it to start so you can ensure your company has enough money
to continue running.

7. Reorganizing your business for
bootstrapping Part 4
• Hire Friends / Family
• Especially at the beginning, you can usually get friends or family to help
you because they care for you and want to see you succeed. They might
work for free or you might have to pay them but you can usually get
away with lower than market rates at the beginning while you’re
building.
• Create A Rainy Day Fund
• Every entrepreneur runs into rainy days where a major financial
expense comes up. Maybe your computer broke down and you need a
new one, maybe your website crashed and you need to hire an
expensive programmer to fix it, or maybe you run into a serious
personal issue and need more money than before (all three have
happened to me). Make sure it doesn’t put you out of business by
buildling up a “rainy day” fund as soon as you can. Every little
contribution helps!
• Good luck and keep bootstrapping! What other bootstrapping methods
have you used to help your company get going?

8. FYI
• To prepare this lecture some help was got
from articles from the internet