Did you know that 99.95% of entrepreneurs do not receive any form of external funding or venture capital when starting up their business? Venture capitalists, funding only 0.05% of startups, are perhaps the definition of “picky” – and if a startup fails any of their requirements, they’ll be rejected.
This means that most entrepreneurs are completely on their own when it comes to funding their new business. The good news is, it’s not impossible. In order to create a successful, healthy business without outside financial support, you need to go all in and be prepared to work extra hard and do extra jobs to get the business you want.
Here are some tips from the entrepreneurs who have been there, bootstrapped their startup, and come out the other side.
Get important people on your side
It’s good to remember that you’re not alone in this situation, others have been there before and their knowledge, experience and mistakes are more valuable than any venture capital or funding. Reach out to people who might be able to give you a little push when you find yourself in times of need
“The single smartest move we made when starting out was to build relationships with investors from day one for what they know, not what they have. Everyone focuses on their pitch to get funding, when bootstrapping we would recommend first perfecting your pitch to get smart people in your corner who have been there before and understand the entire business landscape.
“Having a few key people to reach out to at challenging moments has been worth its weight in gold and has saved us both time and money which is key when bootstrapping.”
Michael Thompson, Brand Manager and Co-owner of CORPORE Wear
Be frugal and focus on what’s important. You have to be prepared to do as many jobs as you can yourself.
“Firstly, decrease uncertainty by confirming you are solving a real problem and minimize waste by conserving cash through discovery and validation. Secondly, hustle hard to get your first customers – this includes talking to people and asking them for money. Finally, focus on a maximum of two or three priorities and avoid the hundreds of other distractions.”
Ron Spreeuwenberg, Co-founder and CEO of Hi Mama
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But don’t be cheap
Of course, you have to make sure the important aspects of your project get the attention and investment needed. You need to assess your spending habits and make sure you get your priorities right.
“Be cautious and frugal, but don’t be cheap in the areas that matter most. Too often I see fellow entrepreneurs go cheap on building their products or distribution channels. You’ve got to get your product right, so make sure you are spending enough to build a quality business around a great product.”
Joe Saumweber, CEO of RevUnit
Fund your startup with another job
If you don’t have the funds necessary to start your business straight away, working another job on the side whilst developing your project is a good idea. It will put your mind at rest and ensure nothing is rushed or neglected in order to save time and money.
“I was able to freelance part-time in my industry to pay my bills while building our application. It definitely helped relieve the pressure and give me some room to breath while the product was being developed.”
David Leibowitz, founder of Picket Fencer
Excellent customer service
Ultimately, your customers are the ones who determine whether your business is going to be a success or not, so treat them good and keep them happy.
“Treat each new customer like gold. Cross-sales, reorders are the least expensive way to increase the bottom line.”
Ted Bremer, CEO of Nature’s Aide
There are many ways round starting up a business without external funding as the “startup explosion” has proved. Be wise and cautious when bootstrapping your company and there’s a big chance it’ll be a success.