Tools for Bootstrapping Your Startup
Launching a business can be a costly thing to do and bootstrapping your startup is an effective way to manage these costs. This guide will explain to you what bootstrapping is about and provides you the resources to cut down costs without sacrificing the quality when launching a business.
WHAT IS BOOTSTRAPPING?
To find the truly great tools for bootstrapping, you must first understand the essence of the practice. What do we mean when we talk about bootstrapping? Bootstrapping a startup means:
“…to sustain the business using personal resources and the revenues generated from the new business.”
Therefore, an entrepreneur is bootstrapping when they are attempting to build a company without taking outside capital. They would be using either personal finances or the operating revenue the new company would create.
Why should you consider bootstrapping?
The biggest benefit of bootstrapping is its effective and inexpensive way to ensure your new business has a positive cash flow. You aren’t borrowing money and thus having to deduct interest costs and make repayments down the line. The money you start generating with the business can be used directly as an investment or profit, not to pay back your borrowing.
As well as improving the cash flow and financial independence of your business, you’ll also maintain further control over the business. Unlike in a situation where you might use venture capital, you don’t lose control over your business when bootstrapping. Instead of having to ask investor’s permission and opinion to make decisions, you’ll be able to decide when, where and how you spend your money.
This essentially allows you to focus on the things that matter. Instead of having to appease your investors or put projects on hold to payback lenders, you can grow the company the way you see fit. Decision-making will be based on what is good for the business, not what also benefits the investor or helps you repay lenders.
While bootstrapping your business is by no means easy, the limited resources at hand can help in decision-making. Since you are operating with limited resources, you are forced to think carefully what are the aspects that generate the most growth. Limited resources can provide more clarity to your decision-making process and help you prioritize your approach.
Watch the below talk on the lessons bootstrapping a startup provided to this entrepreneur:
BOOTSTRAPPING TOOLS TO DEFINE YOUR IDEAS
Before you launch a business, you need to take a moment to define your ideas. The failure rate for startups is above 90% and much of this is due to inadequate business ideas.
Learn about launching a business
Launching a business involves so much more than just a good product idea. You’ll need to understand the legal implications, master the art of running a business and being able to make sound financial decisions.
Bootstrapping is essential during this learning curve, as you don’t want to waste your resources fixing things later down the line. You want to be able to do as many jobs yourself as you can and taking a course on how businesses can be launched will help you achieve this.
- How to Start a Startup – Stanford University has a free online course called How to Start a Startup. It’s a collection of sessions where startups can learn more about the challenges of running a business. You’ll hear from other entrepreneurs and get an insight on things such as management, hiring, marketing and business strategy.
- The 7 Day Startup – The 7 Day Startup is another great guide to help you launch a business. The free challenge runs online regularly and the crash course in entrepreneurialism lasts for one week. It involves daily sessions from other successful entrepreneurs and you’ll get to talk to other startups as well.
Keeping track of different ideas can be difficult. More importantly, losing sight of good ideas can be costly. Sometimes coming up with a business idea can take time and inspiration. You don’t want to spend an eternity coming up with ideas, as you need to get started quickly in order to save money.
- Elevatr – Elevatr ($4.99) is a fun app allowing you to organize the ideas around your business. You can add information regarding the idea, the market, the product, the business model and collect information on your execution.
- MindMeister – If you seem to have many ideas, but not sure what to make of them, check out MindMeister. This mind-mapping app makes more sense of the ideas you have and it’s perfect for collaborating with business partners. As a bonus, the app makes creating presentations easier. The basic version is free, but you definitely should consider the Pro and Business versions. We also interviewed the co-founder of MindMeister. Feel free to read and hear our podcast with Michael.
Define and refine your business model
You can structure your business in a number of ways and the best model for your business depends on a number of things. If you want to start a startup by bootstrapping, you need to find a model that allows quick cash generation.
- Business Model Canvas – The Business Model Canvas is a stunningly easy to use strategic management tool. You can use it to define your ideas, invent a workable business model and design the solutions that work for you. The business model canvas itself can be used freely, as it operates under the creative commons model. All you need to do is link back to the creators, if you decide to use it. You will learn about Business Model Canvas here more in details.
- Experiment Board – You could also consider subscribing to the Experiment Board. It’s suitable for lean startups looking to validate their business model. You’ll be able to examine other startup ideas and models, while getting verifications for your own plans. The platform is currently still in beta, but over 31,000 innovators are already signed in with the service.
Find the name for your business idea
Another big aspect of launching a business is finding the perfect name for your company. So you want decide on your company name before you spend lots of money for creating a branding business design for it.
On the other hand, you do not want to make the mistake of picking a name that’s already in use, so use these tools for generating and checking your name ideas.
- The Name App – Have ideas for the name but don’t know if they are free? Use the Name App to check your business name ideas and see whether the domains for the name are free. It even checks the name’s availability in social media platforms such as Facebook, Twitter and Instagram.
- Namemesh – This tool is specifically designed for creating the best possible domain name. If you were launching an online-focused business, then you’d definitely want to check out Namemesh. You don’t need to have ideas already in mind – just use certain words close to your business idea or product and the app will suggest ideas for you! The app is completely free to use.
BOOTSTRAPPING TOOLS TO FIND A PARTNER
If you are trying to start without additional finances, it might be a good idea to find a partner for your business venture.
Find a co-founder or team
Additional team members can help cut down on costs, as you’ll have more people building the business. You can divide work between different members according to everyone’s specialized skills.
- CoFoundersLab – If you don’t like the idea of launching your business alone, you can find likeminded people through CoFoundersLab. You can find members based on their role, industry of expertise and even simple location.
The Basic Membership is free and good enough to get started. If you are looking for features such as priority listing and recommendations, the Pro memberships might be worth the small fee (between $15-$19.99 per month)
- Founder2Be – Another free platform to try is Founder2Be. It’s mainly aimed at finding co-founders for your products, although there are marketers, developers and the like available to help your business venture as well. You can even use it to help find funding for your projects if you are struggling with resources!
Outsource aspects of your startup
There are going to be things you might not feel comfortable doing yourself. But when you are tight on resources, you shouldn’t hire a full-time team member for occasional and temporary jobs.
Instead, consider outsourcing some of the trickier aspect of starting the business. Perhaps you’d need some help with the website or you want an editor to read your marketing material. Hiring a virtual assistant or a freelancer for small jobs can be cost effective.
- UpWork – UpWork is a great place to find freelancers for any type of project. The site is free to use, although it’ll impose certain fees on you as you hire and pay workers. Nonetheless, it adds that extra layer of security to your hiring and you can see the freelancer’s previous experience and rating as well.
- SmartUp Legal – Legal issues are often the trickiest to do on your own as a non-professional. SmartUp Legal is a platform that connects qualified specialists with startups to solve common business issues. Whether you need help with entity formation, patents or trademarks, you should book a free consultation with the platforms’ experts.
BOOTSTRAPPING TOOLS FOR COLLABORATING
Startups are all about collaboration. But when you’re bootstrapping, you often encounter further problems with co-operation. You might not yet have an office and members of your team might even live in another city, which can quickly add costs.
Get things done
If you want to get things done on time, share tasks with other people and ensure everyone is focused on the task, add these tools to your business plan. They make getting things done easier and both have free versions available.
- Trello – Trello allows you to keep track of tasks and their deadlines.
- ToDoist – Perfect for keeping up to date with to-dos.
You can also begin sharing your ideas with the team, with the following tools. If you come across a cool story on the Internet or see a funky design on your night out, the platforms are suitable for collecting, sharing and changing ideas.
- Evernote – Allows the organization of ideas and inspirations easily and for free.
- Dropbox – Perfect for storing large amounts of data.
- io – Free and private image and file hosting platform.
- Slack – Real-time messaging for business teams. Great for talking with the team even if you aren’t in the same location. The free version is suitable for small teams, but at $12.50 per month, even the Plus version isn’t too expensive.
BOOTSTRAPPING TOOLS FOR TESTING YOUR IDEAS
Once you’ve refined your ideas, it’s of course time to start testing them. Ultimately, it’s only sensible to focus on spending more time and money on ideas that pass the consumer test.
Conduct market research
First, you must conduct proper market research. While this can often be among the costliest thing startups do, there are clever ways to bootstrap your market testing.
- Statista – Statistics relating to your product can be important in determining whether your idea could work. Statista is the leading portal for finding statistics on almost any topic possible.
While the platform is not free to use, the cost is definitely worth it. You can test the platform with the free basic membership and consider upgrading ($49 per month), if you find the statistics and industry reports useful.
- Google Trends – If you want to look at current trends without having to pay, you can also use Google Trends. This is great for figuring out whether the product has a market space out there, find out what competitors are doing and devise marketing strategies in terms of search engine optimization.
Validate your ideas
You should also validate your ideas by talking directly with the potential customers. Luckily, the Internet has made it easier to reach hundreds of people without having to launch a product.
- SurveyMonkey – SurveyMonkey allows you to create surveys for free. These can be great for figuring whether consumers are willing to pay for your product and even determining the right pricing and marketing strategies.
- Moat – Validating your ideas can also be done by looking at what your competitors are doing. The Moat platform allows you to analyze your competitors’ advertising and marketing campaigns in real time. Check out the Moat demo to see whether the platform is helpful for your business.
BOOTSTRAPPING TOOLS FOR BUILDING YOUR IDEA
Once you are done validating your ideas, it’s time to start acting. If your startup is centered on a product, the development of it will be a crucial, yet a costly step to take.
But you shouldn’t go all out and spend all of your resources on product development. Here we have a few ideas on how to bootstrap building your idea.
Build a Minimum Viable Product
Instead of creating the perfect version of the product, start with a Minimum Viable Product (MVP). This can be more cost effective, as it helps you identify the problem areas in production, test different concepts and get feedback from the consumer before creating the actual end-product.
- QuickMVP – QuickMVP allows you test and validate your product ideas. It provides you access to test business ideas, calculate the projections for different business opportunities and organize real customer feedback.
The platform allows the setup of a working website (for testing), different ways to test advertising and social media reach. The Risk-Free Trial is free for 10 days, after which you’ll need to pay a monthly fee.
- Optimizely – Optimizely offers website as well as mobile testing. It’s easy to use and you’ll gain access to plenty of data from customers around the world.
You can select between three types of product testing: A/B testing, Split testing and Multivariate testing. You can even use the platform to improve the personalization of your products and offer a unique experience for your customer.
The starter kit is completely free to use and will be sufficient for most startups. You can also get a personalized package built around your needs.
Launch Your Website
Website’s are another great bootstrapping tool for startups. It allows you to improve your marketing without much of an effort and be in direct contact with the customer. Launching a website right from the start can also help you validate your business idea.
Launch your website on platforms such as WordPress. The platform is free and you can choose from different templates according to the type of business you have. It’s also extremely easy to scale the website, as your skills improve and your business grows.
Build an app
Certain business might also benefit from creating an app. Instead of spending a lot of money hiring a developer for your app, check out Proto.io. It enables users to create fully functional mobile app prototypes for testing. The 15-day free trial will help you check whether the platform is good for your business.
BOOTSTRAPPING TOOLS FOR DESIGN
Creating the right design and look for your business is an important part of branding. Taking advantage of already existing designs, which are free to use, can easily bootstrap branding. Sometimes even browsing these ideas can be enough to get your own unique idea and create a design without spending money on a creative designer.
The following tools and platforms offer plenty of free and cost effective ways to add a design to your brand.
- Pixlr – The system is similar to Photoshop, as in that it allows you to edit and design your own images. But unlike Photoshop, Pixlr operates as a browser system, allowing you to use it wherever. It’s easy to use and won’t cost you a thing.
- Recite – A fun, little tool that allows you to turn quotes into a visual masterpiece. Perfect for adding fun and color to your business website.
- Canva – If your business has a blog, then Canva is the tool to use. It’s free to use and allows the creation of stunning designs from your existing images and designs. Good for learning more about design.
- Pixabay – Free images can be found around the Internet for professional use and Pixabay is one such site. These images can be great for creating websites, presentations and other marketing material.
BOOTSTRAPPING TOOLS FOR MARKETING AND SOCIAL MEDIA
Bootstrapping marketing is among the easiest aspects of starting a business without extra financing. The Internet allows you to leverage social media for marketing purposes and market analysis can be cost effective.
Analyze and start marketing of your product
Consider using e-mail marketing as a method to stay in touch with customers. You should also examine different marketing strategies and find the most successful methods.
- Buzzsumo – Buzzsumo platform helps you analyze and compare your marketing content against those of competitors. You can enter a topic or domain ideas and see how they’ve performed in the past in terms of social media presence, for example. The Pro version costs $99 per month and is sufficient for small startups.
- Mailchimp – Cut time and therefore costs by using Mailchimp. It helps you create e-mail marketing campaigns, test how the campaigns work and receive further analysis about your efforts. The platform has a free plan, which is perfect for starting up. You can scale your features as your business grows.
Leverage social media to make your business idea more known
One of the most cost effective ways to build a name online and market your business is on social media platforms. The platforms are free to use and allow you to use hundreds of people around the world. Social media also allows consumer generated marketing, as shares and likes are automatically increasing the reach of your business.
- Hootsuite – Hootsuite is a social media dashboard tool, which helps you manage different platforms at once. You can integrate it with Twitter, Facebook and Instagram, for example. This makes posting easier and you can easily schedule messages and posts without having to jump between different platforms.
The free plan can work for a startup, but you should also consider the Pro version. It’s only $6.99 per month, but has a free 30-day trial to test it out.
- Buffer – Buffer is another great tool for making social media use easier. The platform allows scheduling, sharing on multiple platforms and it also supports video and image editing. The free version is typically aimed only at individuals, so you might want to consider purchasing the small team version for $99 per month.
BOOTSTRAPPING TOOLS FOR FINANCES
Finally, financial management is an important part of bootstrapping your business. You need to ensure you make the most of your limited resources and different tools to track and analyze spending can help you do so.
The following tools are perfect for ensuring you know exactly where your money is going. Use the tracking tools also for analyzing your spending in terms of returns. You don’t want to be spending money on tools or people that aren’t providing good enough returns.
- Fastbill – You’ll naturally want to start billing as soon as possible. Many invoicing software solutions tend to be costly, but Fastbill offers a simple, web-based solution for moderate prices. You can test it out for 30-days for free, after which the most basic account costs just €5 per month.
- Wave – Wave offers extra, as it can also help with accounting and payroll management. It’s the perfect tool for analysis as well, with the charts providing you an interactive view of your finances. Not to mention it’s free to set up!
- Invoiceable – If your business has plenty of invoicing needs, the Invoiceable is a great free-tool. You can us it to create invoices, automate them and manage client information online.
THE BOTTOM LINE
The above tools can offer plenty of free and cost-effective ways to bootstrap your startup. The key to bootstrapping is about understanding the trade-offs between parting your money and not. Don’t simply go for the free apps or money-saving solutions as the first option. Consider carefully whether you could actually benefit more by hiring another team member or subscribing to a monthly subscription package instead of finding free alternatives.