5 tips to help you Bootstrap your Startup


For the uninitiated, bootstrapping a startup basically means commencing your business with whatever you have in your pocket (which generally is very little) – no venture capital, no angel investing, no bank loans or external financial aid. [Wikipedia meaning here]

A successfully bootstrapped business would mean surviving purely on profits out of sales, a steady cash flow or already existing internal monetary resources. Most successful bootstrapping ideas of famous entrepreneurs come out in the public domain when they publish their how-to success books.

Most of these ideas can range from smart to whacky to unthinkable – to say the least. Here are some tips that may help you in successfully bootstrapping your startup.


Avoid long term fixed costs

If you’re thinking of starting out with a rented office in a commercial complex, you’re probably not born to be an entrepreneur. Even if it is an office space that you receive for free, you will eventually start running up unseen recurring expenses on it very soon.

Depending on the service or product your company offers, work with the most limited resources you can. Scrap those snacks and coffees, use public transport instead of taxis, work out of home, buy professional software with joint funds from a friend, be your own Man Friday and finish the job of 5 people yourself, do another part time/ freelancing job to fund your core startup and so on.

Create win-win barter situations with human resources

When you were in school, how did you get your homework done the illegit style from friends? "Hey, why don’t you finish my science assignment while I make sure I get you a date with that girl you have a crush on?"

The same applies to successfully bootstrap a business. With paucity of funds, you’re not going to be able to hire professionals or experts. So, you might as well start striking relationships from your existing contact base. Get your website built from that long lost friend who used to learn computer graphics or get an ex-factory employee to advice you on how to repair a piece of machinery in your value chain in return for a cup of coffee. Think simple and find creative & cost effective ways of getting work done!

Increase your Plowback ratio

No, we’re not going to discuss the formulae of plowback ratios as used in accounting. All we’re talking about is not taking away any money OUT of your business, whether it is in the form of salary, frills and expenses or variable costs.

Pumping your profits or a steady cash flow back into your business might keep you from earning a single penny for yourself for a few months, but it will be worth the wait. As backup you must plan an exit strategy, how much money you’d have to pay to various vendors and how much funds you may need to stay afloat for the next 6 months. One of the most important tips to successfully bootstrapping your startup is to not get your savings account into negative balance!

Freebies and free marketing

Why do big multinationals make young teenage marketers spend an entire day in the middle of a mall and hand out freebies of their products like noodle packs or face cream sachets?

That’s because nothing works like physical word of mouth, viral campaigns or creating a buzz on social media. We understand that as a startup trying to bootstrap successfully, you can’t set aside budgets to give out a million freebies at the mall. But planning a small marketing stint at your neighborhood would be a great start. Think of friends wearing bright coloured tee shirts shouting your product or emailing your community about a free first time trial of your service.

Make extended friends and family guinea pigs

Testing the waters, observing the markets or getting first hand product reviews – call it what you will. Getting uninterrupted, honest reviews of your product or service from friends and family is the best way for bootstrapping business to avoid heavy costs on product failure on market release.

Why do restaurants have soft launches for their promoters’ friends? Why do Hollywood movies have private screenings before release? The same concept applies. Be ready to face some brash truth about how much your friends would pay for your product or service, what changes they suggest, any features they would like to tweak and so on. You will find these tips highly valuable in hindsight when your product / service offering becomes successful.

These are just some of basic tips for bootstrapping your startup. However, there are 100s of more creative ways that you can employ. The most important factor that you should remember is that every penny you spend from your pocket should give you maximum mileage and should be spent on making your startup successful and nothing else!

"5 tips to help you Bootstrap your Startup", 5 out of 5 based on 1 ratings.
  1. Indraneel Chakrabarty says

    thanks for sharing.

  2. V Kamalika Amit Kumar says

    Thank you Kaushambi for the great insight on how to start a new venture from scratch. I was also going through another site that can be of great help. Check out http://www.smallbusinessindia intuit.com.

  3. Amit says

    great article on bootstrapping. feels like you have done it yourself :)

  4. Robin Williams says

    I agree it was inevitable to think simple, find creative & cost-effective ways of getting work done more perfectly. I truly appreciate all your work and moreover delivering a great deal of vital tips to the readers.

  5. Ashley @ India Price Buzz says

    Hey Kaushambi, That was a nice artilce written by you. From your writing it seems that you have experienced how start up should grow. Anyway I perfectly agree with you. Sometime we make some mistake and our cost go high unnecessarily.

    I like your concept of reinvesting funds in start up. That is really required.

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