How to bootstrap your impact startup to success with these 5 tips

Introduction

Starting a business can be fun but it can also be tough.

It takes a lot of time, effort and resources to develop your offering, understand your target market, and ultimately generate sales.

Many impact-preneurs think that you need to find wealthy investors to stump up lots of capital to get the business off the ground.

But this simply isn’t true.

If you have a passion for changing the world and want to start a business but you’re strapped for cash, there’s a way. Bootstrapping a business is a tried and true way of building a successful company.

From our experience, we’ve pulled together our top 5 tips for bootstrapping your business:

Tip 1 – Prioritise low cost business models that bring in cash early

One of the key things you need to do when bootstrapping a business is bring in cash early and consistently. So your initial business model should prioritise cash flow.

We started our business with offering consulting services (and still do) because all you really need is a laptop, your expertise, a way to find clients, and you can start generating an income.

Think about the lowest cost way to get a product into your customers hands. Having a brick and mortar retail store can cost thousands each month in rent, insurance, staff and so on. An e-commerce store on the other hand can be set up for $29 per month.

Also remember that the business model you start with does not have to be the where the business ends up – it is just a stepping stone to get you on the journey.

Tip 2 – Start to create a passive income stream

Passive income is about making money while you sleep. This is something we do today and it is the one thing I wish we had done earlier in our business journey.

There are lots of ways to create passive income for your business including:

• Create rental income (if you lease an office then rent out a spare desk)
• Affiliate marketing where you promote other businesses and products in return for a commission
• Turn your knowledge into an online course (this is what we do now)
• Sell a digital product like a downloadable template

The great thing about passive income is that it frees up resources to allow you to focus on other parts of your business without constantly being on the hamster wheel of just keeping the business going.

Tip 3 – Validate your idea before you build it

According to CB Insights 42 percent of startups fail because not enough people want the products they sell. In other words they created a solution looking for a problem.

To save you from making this mistake you should validate your idea by testing it with consumers.

When testing your idea you should find the cheapest and fastest way to get the feedback you need.

Some of our favourite ways to test ideas include:

• Interview your target customers
• A paper prototype or simple landing page
• A pre-sale

Tip 4 – DIY Everything

Whenever possible, do everything yourself in the beginning.

When I started my company I did online courses to learn how to build a WordPress website, write code, write sales copy, design Facebook ads, create organic website traffic, search engine optimisation and even learned about behavioural science.

One of the biggest benefits of learning how to DIY certain tasks is that when you eventually need to hire someone you will have a really solid understanding of what is required, how long it should take, and what it should cost.

That said there are some things you shouldn’t DIY unless you know what you are doing, in particular legal and financial tasks.

Tip 5 – Pay yourself first

A common mistake I often see founders make is that they don’t pay themselves because they feel that they need to reinvest everything into the business. This is a really bad habit to get into.

You should pay yourself from day one, even if it is a tiny amount, because this gets your mindset in the right space. The business is there to support you – not the other way around.

When I started my business I paid myself a very small wage (about 10% of what I was earning before starting my business) and increased this wage as the business grew. By the end of the first year I had earned the same amount as my previous job.