Bootstrapping the Smart Way

Bootstrapping a Startup is hard work, but it can be done.

It involves more than just sweat equity.

A lack of capital usually leads to startup failure.

Below is how I am making it work:

1)    Make a Budget and Follow It:

The first thing you should do when deciding to bootstrap your startup is to build a budget. The budget will let you identify how much you need to keep your startup running month to month. It is easy to lose track of all the different expenses you are paying to keep the startup alive. The easiest way to create a budget is to use an excel spreadsheet. A spread sheet makes it easy to sum monthly expenses, add new expenses, and forecast new expenses. You should have your budget forecasted out at least 12 months.

2)    Create a Burn Rate Calculator and Watch It Closely:

I recommend using a spreadsheet to make your burn rate calculator. The burn rate calculator measures how long you can stay in business given your investment, monthly income, and monthly expenses. The burn rate calculator takes your forecasted monthly expenses and subtracts it from your initial capital, monthly income/additional investment to find out how long you can stay in business. The spreadsheet will show when you are out of money and cannot meet your expenses without more investment, more income or less expenses. If you are savvy with spreadsheets you can tie your burn rate calculator with your budget spreadsheet. This will save you time and ensure that you do not make mistakes in transferring information between spreadsheets.

3)    Sweat Equity Does Not Replace All Money Requirements:

Unless you have a lot of money to invest in your company you will need to use some sweat equity. The more you can do yourself the less things cost. This reduces your monthly expenses. But sweat equity is not the answer to all your needs. You will still have bills to pay to include website hosting, internet, phones, marketing collateral, and other consulting services. Sweat equity is valuable in boot strapping your startup but you still need to have a budget and have a burn rate calculator.

4)    Using Contractors

Sometimes the best option is to hire a professional and have them do them work. My two favorite sites to hire contractors to support my business are 99 Designs and UpWork. 99 Designs is great for things like logos, graphic artwork, even app interface design. The thing I like best about 99 designs is you can get several contractors to give you recommendations / designs and you just pay for the one you use. UpWork is a great place to hire all types of professionals. You can hire graphic artists, User Interface / User Experience designers, programmers of all types, along with any other business services you may need. Using remote consultants saves money. It does add a level of difficulty. There may be language issues, difficulty synching schedules, and performance issues.

5)    Using Interns:

Interns should not work for free. This is my own personal philosophy. Everyone deserves to get paid. This does not mean you pay them a full salary but a stipend. Since you are not paying full salary you should make sure to provide mentoring, be flexible with work schedule, accept mistakes sometimes, and be encouraging. I currently have both a marketing intern and programmer interns. Since interns are just learning, you need to accept some things may be beyond their capability and result to hiring a consultant. Interns lower your monthly cost so can help you get more done with your budget.

Summary:

These are some of the things I am doing to bootstrap building my app Want2Remember. The app is being developed to help those with Traumatic Brain Injuries (TBI) or other cognitive impairments. Even with implementing all these strategies, I still find myself strapped for cash at times. Regardless of all this the unexpected may happen (Covid) that impacts your business so plan for the worse and expect the best. I will expand on each of these topics in future posts.