How to Scale your Startup on a Tight Budget
Access to capital is one of the most common challenges startups face globally. And without sufficient funding, any growth efforts would be hampered.
But the great news is that you don’t need money to push forward with some of your plans. Of course, money is essential, it’s the reason you’re in business after all – but it’s not everything.
Bootstrapping is the idea of growing a business by only relying on resources that are readily available at hand. It is an effective approach when running a startup because eliminates the need to waste time endlessly pitching financiers.
Startups that rely on outside funding are often forced to spend years and years repaying debts, which can limit their growth severely. Others that take funding from investors not only have to give up some company equity, but also take on board shareholders who in many cases end up becoming a source of problems.
Bootstrapping is the way to go, as you’ll neither have to worry about repaying loans nor problematic shareholders. Its biggest challenge is that you’ll be forced to make sacrifices and endure periods of hardship while you try to establish your business.
5 Bootstrapping Strategies for Startups and Small Businesses
1. Cut down all non-essential costs
This is what bootstrapping is all about – cutting down on expenses that are non-essential. Doing so will help you save money that can then be used on more important things.
Evaluate your current situation and then note down all your business (and even personal) expenses. From the list, you’ll be able to determine what expenditures you can either cut down or eliminate.
For instance, if you’re spending money on an office, you may want to consider working from home instead to avoid paying rent. If you have 5 full-time employees, perhaps it might make sense to reduce the number to 3, and then redistribute the left-over duties.
You can even consider hiring part-time contractors and freelancers instead of full-time employees. That will help you save on salaries and taxes. You can reduce your internet and phone bills by downgrading to cheaper plans. There are countless ways to cut costs while still running a fully-functional operation.
Since bootstrapping is a sacrifice you’re making for the sake of your business, you can even consider cutting down on some of your personal expenses to free up more cash to invest in it.
2. Take advantage of free offers
Why pay for something when there is a free (or highly discounted) alternative that can help you achieve the same goals?
Many companies offer freebies in the hope of luring customers and then converting them at a later stage. All you need to do to find such free offers is a quick Google search for whatever you need, along with the word “free”. For instance, if you’re looking to get accounting software, you can do a Google search for “free accounting software”.
You can also get free advertising credit on most major ad platforms including Google, LinkedIn, and Snapchat. This article goes over some ways to get over $1,000 in free credit.
You can get a free business website on platforms like FreeWebDesign, a free domain name on Freenom, free hosting on Google Sites. There are tons of free offers you can find online to help you save hundreds or even thousands of dollars every month.
Related: Growth Hacking Tools: How to get a free website, domain, hosting, and business emails
3. Focus on social media
Marketing is often one of the biggest expenses for most businesses. Unfortunately, it is so important that it cannot be neglected. You need to figure out a way to get your message across to your target audience otherwise your startup is doomed.
Since you’re working with a shoestring budget, you can focus your marketing efforts on social media, since it is free. It doesn’t matter what industry you’re in, chances are your target customers are on social media.
Have a look at your buyer persona and then determine what platforms they’re most likely to be on. For instance, if you’re products are designed for HR professionals, then they are more likely to be found on LinkedIn as opposed to Snapchat.
Make sure that you have business pages on at least 2 major platforms and then keep them active by posting regularly and engaging with your followers. You can even do occasional competitions to help increase your engagement rates and get people to talk about your brand.
The competitions can take many different formats. For instance, you can get people to share your photos or use your hashtags for a chance to win exclusive prizes. Doing competitions is one of the best ways to build social proof and increase your following.
4. Build an email list
An email list will give you on-demand access to your target audience. Unlike most social media platforms, you can easily get your message delivered to a significant portion of your list without any restrictions.
Social media posts usually have a limited reach to force companies to spend money on ads. Email on the other hand has no such restrictions – that’s why email marketing to this day remains one of the most potent ways to get a message across to an audience. Email campaigns have an average ROI of 4,400%.
The easiest way to start building your email list is by adding an opt-in form on your website and then offering free things such as e-books and gift vouchers to get people to leave their contacts.
5. Form strategic partnerships
Partnerships are great because they can help you achieve things you otherwise would not have been able to singlehandedly. You can look to partner with other startups or even established businesses and then offer each other support in various ways.
For instance, you can offer your in-house expertise or propriety technology to help them augment their products, and they would reciprocate by doing the same.
The easiest type of partnership to form is a cross-promotion partnership, as the only thing required is to actively promote each other to your respective audiences.
In such a case, you can look for companies that are in a different niche, however target a similar audience as you, and then send them your proposal. It will cost them nothing and they will benefit by increasing their brand awareness. Since you’re not in competition with each other, there’ll be no conflict of interest or risk of stealing each other’s client base.
