We’ve written a couple of blog posts on the topic of “What If The Start-Up Has No $? (part1 & part 2). Let’s continue this topic with a post on bootstrapping. A post from ResearchWhitePaper defines bootstrapping as guerilla financing in their recent article “Capital Strategy: About Bootstrapping”.
Here are three tips they propose:
- Hire as few employees as possible.
- Lease, share, and barter everything you can. (And I would add, get as much as you can for free.)
- Use other people’s money.
As we mentioned in previous blog posts, utilize money from friends, families, and fools. The article from ResearchWhitePaper offers a few more bootstrap financing tips:
- Getting a home-equity loan.
- Offering equity to employees and vendors in lieu of salary or cash payments.
- Bartering for goods and services.
- Tapping your credit cards.
- Convincing vendors to accept extended payments.
- Starting your business part time while working a full-time job.
- Getting an extra job.
- Working from home or in your garage.
- Sharing offices with another company.
- Encouraging customer financing (deposits and early payments).
- Looking for angel investors.
- Pooling founders’ savings.
Starting a company can be very exciting. It also tends to be very stressful. The challenge is to minimize your overhead and expenses as much as possible. One of the biggest expenses can be renting office space. Fight this temptation as long as possible. Utilize coffee shops, co-working spaces, strategic partners, your home, etc. as your office. Creo Quality has been doing this for nearly three years. We are still virtual but have established relationships with several businesses around central Indiana as a “landing zone”, in addition to working at client sites.