Bootstrapping a New Business

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  • Author Calum Macleod
  • Published April 23, 2012
  • Word count 684

The process of bootstrapping in reference to a new business means setting up a new venture without any substantial capital being invested. With a constant stream of new online businesses starting up the bootstrapping strategy has become more popular than ever.

How it’s done?

Bootstrapping a new business involves keeping the start up and running costs as low as possible and reinvesting any profits back into the business.

Traditionally setting up a new business is something that requires a certain amount of investment. "It takes money to make money" goes the popular quote. In the internet age is that still true? The answer is yes and no. Taking a traditional business model such as retail online is still going to incur expenses but these will be far less than that of a retailer with a physical shop. There are new markets such as eBooks and apps which can be created at a low cost providing the skills are available to produce them. Whereas in the past new businesses would need to plough money into premises, and traditional advertising channels this part can now be sidestepped for a number of new businesses.

Why now?

The internet has made things possible that simply weren’t before. Within 1 month it is possible to create a well branded company image, get it online and start selling a product. Ads can be bought to bring customers to the site straight away where the brand and website can be measured and tweaked. There are a lot of people who are aware of this which is why niches are filling up fast. There is still room for inventive, useful and creative ideas though.

Bootstrapping tips

There are a number of things you can do to create a business presence that will allow you to compete alongside your better funded competitors.

  1. Brand and Design.

The brand that you build starts with the name of your business and carries on from there to include everything that your business does. From the logo and web design to how you come across in an email. Everything that your business does needs to convey the brand identity that you want to foster. How you use social media, answer telephone calls, and come across to clients all present an image of your business to your customers. This does not have to be expensive.

You will need a professional designer to create your brand identity but there are websites to find decent freelancers to get the work done on a reasonable budget. If your business needs to receive calls you can take the calls yourself ensuring a professional manner at all times or you can use a virtual office answering service which will cost you a lot less than hiring a receptionist.

  1. Shop around for suppliers

Gone are the days where you would need to travel to China to find a cheap wholesaler. While visiting a wholesaler to see the products first hand has its merits it is possible to find products you need by doing your research online. Do your maths at the beginning to figure out your margins and how much profit you will be able to invest back into your business. If your new business is ecommerce based you could try drop shipping which would allow you to sell products without ever touching the stock.

  1. Test the market first

It is even possible to test your market to a certain extent before fully committing. No matter how good your research is there may be things you only discover once you have gone to the effort of creating your brand and organising your products or service. Through paid online ads you can get instant traffic and assess the interest in your new venture.


Of course, there are some drawbacks. The bootstrapping strategy is not suitable for every business. If all of your competitors are heavily funded it may take you a long time to reinvest enough of your profits to be able to compete with them. However if you pick the right niche and create a worthy brand bootstrapping can help your business thrive.

Calum Macleod writes for BSQ Virtual Offices a site that provides telephone outsourcing options for new and established businesses.

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