Getting a new business off the ground takes time, effort, knowledge, energy… and money. In some cases, lots of money. The kind of money that, unless you’re independently wealthy, you don’t have laying around.
Don’t worry; plenty of other folks do have that kind of money laying around, right? And possessing the right entrepreneurship traits puts you ahead of others, doesn’t it? Maybe, but that doesn’t mean they’re going to give it to you unless you give them a good reason to do so, and even then, your chances aren’t great.
Here’s the sad truth: traditional banks almost never lend to small business owners anymore, at least not before they’ve proven their ideas six ways from Sunday. You can walk into a bank with a great idea and a sunny smile as much as you like, but you’re soon going to get sick of having the same conversation over and over (and over) again — and probably getting laughed at from time to time, too.
That’s why ambitious business owners are increasingly bypassing the bank and raising capital elsewhere — or stretching whatever capital they do have as far as possible. This practice is broadly known as bootstrapping, and there are plenty of ways to do it. Here are nine of the most effective:
Seek Help from Friends & Family
Ah, the old “friends and family round.” It works, people. Even if you don’t have the proverbial rich uncle, or know anyone who’s doing well for themselves at the moment, you can still raise modest sums with a convincing pitch and an appeal to your friends’ and relatives’ empathy. Just remember to pay them back eventually.
Start a Crowdfunding Campaign
Crowdfunding comes in two main flavors: rewards-based crowdfunding that rewards contributors with complementary products or experiences, and equity crowdfunding, a newer option that gives each contributor a small ownership stake in the business. Equity crowdfunding carries a higher legal burden, but it has greater capital-raising power.
Use a Low-Interest Business Credit Card
Many business credit cards offer low- or no-interest introductory promotions to encourage new cardholders to spend, spend, spend. As long as you can see your way clear to paying back your charges, preferably before the regular interest rate kicks in, this is a great way to raise some free money.
Join Local Entrepreneur Networks & Groups
Don’t let anyone tell you that building your own business is a lonely endeavor. Sure, the buck stops with you, but that doesn’t mean you have to make every decision on your own. You’ve got a wealth of accumulated expertise that’s just begging to be tapped — if you know how, where, and when to tap it. Hook up with small business groups and entrepreneur associations in your area such as The Entrepreneurs’ Group, The Alternative Board, or other groups that are active in your neck of the woods.
Take Classes & Seminars
Even if you dropped out of school to start your own business, you can benefit from business classes and seminars. Check with your local business school university, Chamber of Commerce, or Small Business Administration office for times and dates.
If you need something done and can’t afford to pay cash, don’t. Instead, offer to barter something you can provide for whatever it is you need. It’ll be just like old times (literally).
Market testing is expensive and time-consuming. Before throwing your team into a full-scale trial, start small. Opt for a truncated beta run or ad hoc sales through a third-party platform, moving a few units or packages here and there. If it seems like people want to buy what you’re selling, scale up into a proper test.
Handle Your Own PR & Marketing
Don’t bring in the big guns when the farm team will do just fine. Hire a couple copywriters and designers, slap a marketing director above their name, and task them with pumping out your marketing and PR material. You’ll save gobs of money relative to a big agency and you probably won’t even be able to tell the difference.
If At First You Don’t Succeed…
There’s no such thing as a smooth rocket ride from idea to multi-million-dollar success, even if funding isn’t a problem. But that doesn’t mean you should get discouraged at the first sign that things aren’t going your way. As you make your way through the entrepreneurial wilds, don’t be shy about turning to those who’ve come before you for some friendly advice. One day, you just might find yourself in a position to repay the favor with the next generation of ambitious, young entrepreneurs.
Image from http://www.junloayza.com/funding/funded-startup-vs-bootstrapped-startup/