3 Mistakes To Avoid When You’re Bootstrapping Your Business

bootstrapping your business
The definition of bootstrapping your business is to use existing resources to go from startup to successful enterprise.

Most of us solopreneurs and small business owners don’t pitch our companies to big venture capitalists to raise funds, and as a result we tend not to grow as quickly. But we also retain full ownership over our businesses, and that means we get to call the shots.

Bootstrapping Your Business? Watch this.

So what are the 3 biggest mistakes I’ve noticed and experienced myself while bootstrapping my business? Here they are.

1. Not having enough startup capital

This is a pretty obvious one, but if you don’t have enough money in your bank account to pay your rent or put food on the table, your business isn’t going to survive very long.

In this situation, I’ve seen people give up on their businesses entirely. Another approach might be to get a “bridge job” where you work in someone else’s business or in a regular dollars for hours job to make ends meet while you grow your business on the side.

The definition of a bridge job is that it isn’t a full time gig that zaps your energy. It’s also usually not another business where you are required to get clients and make sales for it to support you.

During this phase of your business, you’ll want to focus on bringing money into your business as quickly and easily as you can, so you can phase out of your bridge job. But there’s nothing wrong with taking on a part time contract to help cover expenses while your business is starting up.

2. Having too much startup capital

What? You might be wondering how having too much startup capital could be a bootstrapping mistake. Well, technically it’s not a problem unless having a lot of money in the bank keeps you complacent.

This was the case for me when I first started my business right out of college. I had the good fortune of having paid internships during college and I graduated debt free, with enough money in the bank to feel safe and secure for many months.

As a result, I didn’t do the daring things in my business that would have really gotten me the clients, experience, and money I needed to build my business right from the get go.

I ended up spending most of this money buying information products, and not implementing what I was learning. Trust me when I say that I believe in the power of knowledge and training, but I just wasn’t taking things seriously enough to put things into practice and put myself out there fully as a business owner.

It wasn’t until my startup stash had all but dwindled and I made a big investment into a high level mastermind program that I finally got my butt into gear and started making serious money in my business.

3. Paying yourself at the right time

Investing in your business is usually a necessary thing. It’s part of the entrepreneurial path to invest time and money into something when you don’t know whether it will work or not.

As a bootstrapper, you’re likely hardwired to re-invest all of the income from your business back into it, to help it grow and prosper. I certainly was, and for many years while my business income was increasing, my net at the end of the year wasn’t.

It wasn’t until I recognized that I had to pay myself like a regular employee that I realized my bootstrapping mistake.

If you don’t pay yourself a salary, and you believe that you’re working for free as you build your business… you might end up with a rude awakening when you need to hire someone to replace you or close down your business, with little to show for it in your personal bank accounts.

Paying yourself a fair market wage out of your company means that you treat your business with respect, and it treats you with respect too. It helps you make better hiring and outsourcing decisions, because you know what the value of your time is worth to the company.

It also makes things easier at tax time, and can even save you money – definitely check with your accountant and attorney on how best to approach this topic.

So these are my biggest realizations around successfully bootstrapping your business.

What are your tips for bootstrapping your business?

Now I’d love to know what you’ve learned along the way about growing a business from scratch – any tips and tricks you’d like to pass along to your fellow entrepreneurs?

Leave a comment below!

#065: Mistakes To Avoid When You’re Bootstrapping Your Business

Off The Charts Business Podcast

Most of us solopreneurs and small business owners don’t pitch our companies to big venture capitalists to raise funds, and as a result we tend not to grow as quickly. But we also retain full ownership over our businesses, and that means we get to call the shots.

So what are the 3 biggest mistakes I’ve noticed and experienced myself while bootstrapping my business?

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Go From No Clarity To Lucid Living Without Being Seen As Another Dreamer

Lucid Living

You have big dreams, but not enough clarity to get there. Here’s how to live into them without being just another dreamer.

I love dreaming up big things. But I’m not just a dreamer, I’m also a doer.

One thing that can keep you stuck in dreamland without any results to show for it, is not having enough clarity.

You might know how you want to feel or what you want things to look like, but you don’t quite know how to get from point A to point B.

So you put your thinking cap on, and you try to figure it out. You might even draw it out, and come up with tons of great ideas and plans… but at the end of the day, you still feel a little fuzzy and unclear on how you’ll get there.

How To Go From No Clarity to Lucid Living

The definition of the word lucid is: expressed clearly; easy to understand.

Clarity is crucial for so many things in business: from your products, your website navigation, to your communication. It all needs to be easy to understand, and easy for people to say yes to.

But if you’re muddled and confused, it’s going to be hard for you to get your point across clearly.

One of the ways that we stay stuck in confusion is by trying to do mental jumping jacks.

One of my favorite sayings is:

Getting your thoughts out on paper helps clear the brain cobwebs. Re-reading what you wrote will also tell you if you need to go deeper, make things more specific, or if you hit the jackpot.

It also helps to get feedback from peers and ideal customers. This is the magic ingredient that takes dreams and turns them into reality.

If someone else can’t understand what you wrote or doesn’t “get it”, don’t assume they’re wrong. Find the truth in their perspective and find out how you can more clearly explain and show the benefits of what it is you’re selling or providing.

Some of my best business decisions came out of feedback, and sometimes it hurt to take in someone’s negative comment but underneath my ego I could see that there was a kernel of useful information that I could apply to help other people “get it” more.

Now notice that all of this started with writing and then putting your writing in front of other people.

If your business isn’t on the web or writing isn’t your main form of communication, try other forms of creation.

Paint, draw, sing, speak, build, record, weave, code, dance, make…

You’ll find that when you’re in creation mode, your mind isn’t as loud and you’re not stuck in your thinking or doubting place anymore.

Things that bubble up to the surface will ring true and clear.

The feedback you get from the marketplace will give you signals that you can easily understand. You’ll know if you’re creating in the right direction, or if your creations need to be adapted to the current ecosystem that you’re operating in.

That’s when you’ll know you’ve crossed into the land of both the doer and the dreamer, and you’ll be on your way to lucid living.

I’ve found that sometimes if you’re unclear in one part of your life, it can spill over into other parts, too.

So if you’re having difficulties being clear in your business, try being more clear in your personal relationships or your health.

Or start with the place that’s easiest to get clear, and watch how clearing clutter or creating clear boundaries can turn into clearer communication and business ideas, too.

From Dreamer to Clarity Finder… Your turn!

Now I’d love to hear about your relationship to clarity. Do you feel like clarity is your friend, or do you need to cultivate a little more clarity still? Leave a comment below and let’s keep these comments lucid, shall we?

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