How to bootstrap your way to a fortune! PLUS! 50 businesses you can start for under $500.
You don’t have to spend a mint to start your own business. In fact, starting a business on a shoestring budget is becoming the most popular way for entrepreneurs to launch their dream venture. Not only is bootstrapping the perfect way to realize your small business aspirations, it is absolutely essential in most situations.
Bootstrapping is a popular term used by entrepreneurs to describe their shoestring startup approach to launching a new enterprise. It’s a lowcost way to get your biz running.
“Boostrapping” is a 19th century term. Bootstrapping was used to describe someone “pulling themselves up by their bootstraps.” That phrase—which refers to 19th century high-top boots that were pulled on by tugging at ankle straps—generally means doing something without outside help. Independent and solo.
Today’s bootstrapping means to launch a small business without any external funding. Companies that “bootstrap” rely on self-funding only. They might use their savings, credit cards, sweat equity and penny-pinching to get their new business up and running.
They don’t want to seek outside help or outside funding (bank loan, money from friends and family, venture capital, etc.). Bootstrappers prefer to be independent and run the show themselves from Day One. When the business begins to produce revenue they have no one to pay back, no loans to worry about and can choose to put the income back into the business.
Shoestring or bootstrapping startups are also referred to as Lean Startups. Entrepreneurs do whatever they can to cut costs, eliminate waste while maximizing existing resources.
The Crowdfunding Option
Crowdfunding has become a popular way to generate funds for those wishing to start their small business. The Internet is the source for entrepreneurs to launch their “crowd funding” campaigns.
According to dailycrowdsource.com, crowdfunding is asking a crowd of people to donate a defined amount of money for a specific cause or project in exchange for various rewards.
Crowdfunding initiatives could be a nonprofit (e.g. to raise funds for a school or social service organization), political (to support a candidate or political party), charitable (e.g. emergency funds for an ill person or to fund a critical operation), commercial (e.g. to create and sell a new product) or financing campaign for a startup company.
Crowdfunding models involve a variety of participants. They include the people or organizations that propose the ideas and/or projects to be funded, and the crowd of people who support the proposals. Crowdfunding is then supported by an organization (the “platform”) that brings together the project initiator and the crowd.
Entrepreneurs who want to start a crowdfunding campaign can begin immediately. They select a platform, write up a convincing pitch to potential funders, or create a great video to describe what they want to do, and hope that enough interested visitors to the site will want to help them start the business. Visitors to crowdfunding sites contribute money usually in exchange for a gift, a product, a commemorative t-shirt or hat, or a mention on the company website.
There are three general categories crowdfunding can fall under: Equity, Donation, and Debt.
Equity-based crowdfunding is asking a crowd to donate to your business or project in exchange for equity.
Donation-based crowdfunding is asking a crowd to donate to your project in exchange for tangible, non-monetary rewards such as a t-shirt, pre-released CD, or the finished product.
Debt-based crowdfunding is asking a crowd to donate to your business or business project in exchange for financial return and/or interest at a future date.
Pros and Cons of Crowdfunding
Crowdfunding is useful for a variety of opportunities, whether fundraising for disaster-relief, creative projects, creating a salable product, or creating a start-up.
• Crowdfunding platforms allow you to market your project, generate interest, and receive funds.
• Crowdfunding backers can provide useful feedback.
• Once you get a solid base of support, there is no limit to the amount of projects you can fund.
• Crowdfunding your project exposes your ideas to copycats.
• Crowdfunding may limit the amount you can receive.
• Crowdfunding regulations can be difficult to work with.
Summary of Crowdfunding
Crowdfunding is not limited to a specifc type of product or project. Crowdfunding can be fast, efficient, and effective if done right. There can be little risk involved compared to other business ventures. The more creativity and fun you have, the more likely you’ll get funded.
The techniques of Guerrilla Marketing can help any bootstrapping entrepreneur launch their business on a shoestring budget.
Jay Conrad Levinson is credited with coining the phrase, “Guerrilla Marketing,” and has written books and developed a website to help entrepreneurs develop their own low or no budget marketing campaigns. The books are widely available.
The first Guerrilla Marketing book was published by Houghton Mifflin in l984. Today there are 58 volumes in 62 languages, and more than 21 million copies have been sold worldwide. The book is required reading in many MBA programs throughout the world. The author taught the topic at the University of California, Berkeley Extension Division. He lectures on it worldwide.
In the words of the Father of Guerrilla Marketing, Jay Conrad Levinson, this describes guerrilla marketing:
“I’m referring to the soul and essence of guerrilla marketing which remain as always – achieving conventional goals, such as profits and joy, with unconventional methods, such as investing energy instead of money. Guerrilla Marketing started out a single volume and has since acted biblically by being fruitful and multiplying into a library of 35 books and counting, an Association, a lush website, an abundance of video and audio versions, an email newsletter, a consulting organization, an internationally-syndicated column for newspapers, magazines, and the Internet, and presentations in enough countries for us to consider forming our own Guerrilla United Nations.
“Because of big business downsizing, decentralization, relaxation of government regulations, affordable technology, and a revolution in consciousness, people around the world are gravitating to small business in record numbers. Small business failures are also establishing record numbers and one of the main reasons for the failures is a failure to understand marketing.
“Guerrilla marketing has been proven in action to work for small businesses around the world. It works because it’s simple to understand, easy to implement and outrageously inexpensive.
“Guerrilla marketing is needed because it gives small businesses a delightfully unfair advantage: certainty in an uncertain world, economy in a high-priced world, simplicity in a complicated world, marketing awareness in a clueless world.”
Visit http://www.gmarketing.com/ to learn more about Jay Conrad Levinson.
Whether you want to pick up extra cash or start a full-time venture, a shoestring startup is for you! Here are our 50 suggestions that can be started on a shoestring budget for $500 or less. The shoestring startup businesses are listed in no particular order.
1. Seasonal Pop-Up Shop: You can sell umbrellas when it is raining, watermelon on a hot beach, sunglasses when the snow is blinding, etc. Make sure you don’t need a local license.
2. Laptop Inventory Service: Every year people say they are going to make a video or a list of their home items for insurance purposes in case disaster strikes. You can carry your laptop and camera around, or just take your iPad, and prepare documents for them.
3. Social Media Maven: Every business today needs to have a facebook account and a twitter account. Many don’t know what to do. You come in and start them on their journey to social media stardom. You can also help them make and post YouTube videos.
4. Flower Arrangements: You can buy wholesale flowers and finesse them in fine style for local restaurants, doctor’s offices, and businesses. Create a photo portfolio and go around and book your clients.
5. Window Washing: We talk to local window washers who make six figures every year. They have to hire help to get all of the clients’ homes and businesses serviced. An enviable position.
6. House Painting: We know a retired fireman who makes more than $100,000 a year painting homes for six months a year. It’s a lucrative small business opportunity. Get a partner, have fun!
7. Bed & Breakfast: If you live in a college town or resort area and have an extra room or two and a bath, you can rent it out. Find out what the going rate is and start your guesthouse business.
8. Baking Biz: Cupcakes, scones, cake pops, bread and custom-made cakes are popular items in any economy. Start baking and find your own recipe for riches.
9. Maid Service: Cleaning businesses always seem to prosper. You can specialize in residential or commercial. Charge what the market will bear.
10. Appointments Plus: There are many hours lost waiting for the cable guy, the plumber, the pool guy, etc. You can start a business arranging appointments for your clients and you’ll be the one to let them in and oversee the work.
11. Tutor: Do you have a language skill? Are you good in math? Can you play a musical instrument? Congratulations, you can start a tutoring business. You can offer the class on your premises or in the home of your student. Combine a few students in one session and you’ll maximize your time.
12. Sell Personalized Products: Who doesn’t love a pen emblazoned with the name of their business, or a hat or bag with a favored logo? You can go online and Google various opportunities to help you get started. You can outsource the actual printing process so you just book the goods and deliver them to your customers.
13. Photographer: You don’t have to be a world famous photographer to book a lot of jobs. Many weddings today book a pro for the wedding party shots but want a fun photographer to do the candid shots. Couldn’t that be you? Research various opportunities in your community.
14. Sell Your Crafts: Etsy has made it easy for you to formalize and professionalize your jewelry and craft making into a business. Check out the site, build you own virtual store and start selling.
15. Gift Basket Business: Someone always needs to order something special, customized for a certain event. You buy the goods wholesale and then resell the end product at a large profit.
16. Scrapbooks: You can offer memory books for special occasions such as 50th wedding anniversaries, business celebrations, grand openings and more. Any party or special event is a potential moneymaker for your business.
17. Shuttle Service: Kids need to get to sports events. Pets need to go to the vet. Senior citizens need to get out to the store or go to a medical appointment. Beef up your auto’s liability insurance and see if you can establish this type of service business in your community.
18. Move-In Service: Haven’t we all moved into an apartment or home rental and wished someone had come in right before us and cleaning out the refrigerator, the shower and maybe painted the hallways? Yes! You can start a service performing these tasks for landlords, property owners and new renters.
19. Organizer: Kitchen/Closets/Basements, etc. are your specialty. Charge by the hour, and get your clients’ homes and businesses in shape. Positive word of mouth will help you grow your business.
20. Handyman: We’re not suggesting you become a major contractor or homebuilder but there are dozens of tasks that home and apartment dwellers don’t want to tackle. Make a list of what you feel comfortable offering and place an ad in a local newspaper or circular. It would be a good idea to make sure your don’t require a special license to perform these tasks before you start.
21. Parking Lot Cleanup: It seems hard to imagine, but we know of an individual who makes more than $120,000 a year, sweeping up parking lots. Go around and book your clients. Return during off hours and pocket your earnings.
22. Organic Vegetable Gardens: You build Victory Boxes on the premises of your clients and establish an organic vegetable garden. Charge more if they want you to come back every week and care for it and harvest the crops.
23. Pet Biz: Pets are a $50 billion industry just in the U.S. alone! Shouldn’t you be grabbing a piece of this pie? Start a pet sitting/walking/furniture/clothing, etc. venture.
24. Sell Wholesale: Find a product that clicks with our culture and buy it wholesale: sell at a whopping profit.
25. Lawn Service: Americans love a green lawn but often can’t get results or take the time to care for it.
26. Window Displays: Every storefront has a window that could be your next moneymaking assignment. If you have a flair for design, consider offering this service.
27. Delivery Service: Find a number of businesses in your community that don’t offer delivery and ask them if you can start a freelance delivery service. It’s a win-win.
28. Freelance Writer: If you have some talent as a writer, you can make money putting together anything from press releases, to web content for a wide variety of clients.
29. Video Business: You can take your old Flip video camera or invest in a better digital camcorder and start making clips of sports events, local rock bands, events, small business celebrations and grand openings, parades, local clubs, etc.
30. eBay: Sell your wares on the online auction site.
31. Blog for cash: You can visit blogger.com and start blogging today. Sell ads on your own site or blog for others for money. Canvass local businesses.
32. Tailor: If you have sewing skills you can make a mad mint hemming pants, taking in dresses or taking out an outfit. Work at home or piggyback on someone else’s facility. Explore opportunities.
33. Flea Market Entrepreneur: Become a professional flea market salesperson. You can keep your own job and just run your small business on weekends. Find an old table, and some goods to sell.
34. Holiday Decorating: There are dozens of holidays throughout the year that offer decorating potential. Scope out restaurants, diners, and other small businesses to see if they’d be interested in your work.
35. Crowdfunding: Help other organize and run their crowdfunding campaigns on IndieGoGo, Kickstarter and any of the other 600 money-raising platforms. You take a percentage of what you help earn on the site. Research crowdfunding sites.
36. Junk Removal: Plenty of people have junk around but don’t know how to get rid of it, or they don’t have a van or truck to haul it. This is where you come in and turn their trash into your treasure.
37. Garage Sale Organizer: There are garages all over the United States that are full of items that could be sold. You sell it for the homeowner and pocket a commission. Make a flier for distribution.
38. DJ: A mobile disc jockey business is a very lucrative career. You can work your own hours and party your way to profit.
39. Errand Service: There are plenty of businesses and individuals who need help with chores and errands and you can launch a service helping them get the jobs accomplished.
40. Gutter Cleaning Biz: Every homeowner dreads gutter cleaning. Combine this business with a few other seasonal offerings and you are on your way to success.
41. Concierge Business: You can start your own concierge service right from your home. Local businesses can use your service as well as tourists to the area.
42. Assembly Service: Have you mastered the little pieces from the Ikea box? Then you can start a business assembling furniture, gas grills, bikes, etc. for your customers.
43. Detailing: Boats/Cars/RVs: People like a clean machine but don’t have the time nor the inclination to get the job done properly. There are a number of products you can purchase to make the job an easy one.
44. Digitize Movies: That old video is fading fast and your customers will be delighted that you will transfer the treasured memories to a DVD. Google the various ways you can do it and place an ad in your local paper today.
45. Just Weeds: Weeds are everywhere and there are a number of small business owners who make a living just pulling weeds.
46. Power Wash: If you have a power washer you can start a business cleaning homes, decks, etc. for your clients.
47. Food Delivery: This is a good business in any community where there are senior citizens living or single parents who are too busy to get out and do the food shopping. You can also coordinate with local restaurants and diners to deliver their products. Make the rounds and investigate.
48. Space Rental: Do you have extra parking space in your driveway for a commuter who can’t park at the local train station? Do you have extra space in your garage for that vintage car lover who doesn’t own a garage? Consider renting your space for cash.
Visit our website at sbomag.com to learn more about connecting with free resources to help you start your own small business on a shoestring budget.
49. Personal Assistant: There are plenty of lawyers, accountants, small business owners, local figures and more who need help with their email, shopping.
You can take on as many clients as you can handle.
50. Herb Garden: People love to cook with fresh herbs but who has the time to start a garden? You do, for money. Buy some pots and start growing. Set up the gardens for your customers.
Creating Your Business Plan
As you work on developing your small business concept, you should consider making a business plan. Creating a business plan is one of the most important steps you will take because the plan serves as your road map for the early years of your business. The business plan generally projects 3-5 years ahead and outlines the route a company intends to take to reach its yearly milestones, including revenue projections. A well thought out plan also helps you to step-back and think objectively about the key elements of your business venture and informs your decision-making on a regular basis.
SBA’s Business Plan Tool provides you with a step-by-step guide to help you get started. All of your information entered into this tool is 100% secure and can only be viewed by accessing your account using the password you have specified. Not only can you save your plan as a PDF file, you can also update it at any time, making this a living plan to which you can often refer. You can also use your completed business plan to discuss next steps with a mentor or counselor from an SBA resource partner such as SCORE, a Small Business Development Center (SBDC) or a Women’s Business Center (WBC).
Complete each section of SBA’s Business Plan Tool at your own pace. Save your work at any time and pick up where you left off the next time you log into the tool. Your information will be saved for up to six months after your last login date.
During the step-by-step process, this tool will update the status of your business plan. Once you save your information and move to a new section in the business plan, a checkmark will appear in the numbered section menu at the top of the screen denoting when each section is complete.
Get started now by logging in or registering for a new account. Visit http://www.sba.gov/tools/business-plan/1 to start writing your business plan.
Tips for Wise Decision-Making
As you manage your business, you will be faced with important decisions that may impact the future of your company. This may seem stressful, but keep these tips in mind and you’ll find yourself making wiser decisions in no time:
• Define, as specifically as possible, what the decision is that needs to be made. Is this really your decision or someone else’s? Do you really need to make a decision? (If you do not have at least two options, there is no decision to be made.) When does the decision need to be made? Why is this decision important to you?
• Brainstorm, and write down as many alternatives as you can think of. Be sure to use your resources (experienced friends and family, the Internet, etc.) to find out more about the implications of each option.
• Visualize the outcome of each alternative. Do you feel more satisfied with one outcome than with the others?
• Do a reality check. Cross off those alternatives that most likely will not occur.
• Once you have made your decision, get moving on it. Worrying or second-guessing yourself will only cause stress. You have done your very best. Remember, no decision is set in stone!
Common Decision-Making Mistakes
Have you ever tried to learn ten new things all at once? If you have, you know that it is very easy to become overwhelmed and end up learning very little at all.That is because of the way the brain works. Our brains screen and categorize information so that we can understand the world around us without being overwhelmed by it. We get into trouble when we fail to realize that many of the perceptions we hold are based on what society (i.e., parents, teachers, the church, all institutions, etc.) teach us, not what we actually know to be true. Here are some common mistakes leaders encounter when trying to make a decision:
• Relying too much on expert information. Oftentimes, people have a tendency to place too much emphasis on what experts say. Remember, experts are only human and have their own set of biases and prejudices just like the rest of us. By seeking information from a lot of different sources, you will get much better information than if you focused all of your energy on only one source.
• Overestimating the value of information received from others. People have a tendency to overestimate the value of certain individuals in our society and underestimate the value of others. For instance, experts, authority figures, parents, high status groups, people who seem to have it all together, and people we respect have a way of swaying our opinion based simply on the fact that we believe they know more than we do. When you find yourself doing this, ask yourself: Do they know as much about this problem as I do? Are their values the same as mine? Have they had any personal experiences with a problem like mine? In other words, keep their opinions in perspective.
• Underestimating the value of information received from others. Whether we realize it or not, we also have a tendency to discount information we receive from individuals such as children, low status groups, women (yes, believe it!), the elderly, homemakers, blue-collar workers, artists, etc. This is unfortunate since many times these groups can paint a good picture of the other side of your problem. In other words, these groups may use entirely different values and perceptions in their answers to your questions. The result is a larger perspective of what the issues really are. Just make a note that if you find yourself discounting the information you receive from anyone, make sure you ask yourself why.
• Only hearing what you want to hear or seeing what you want to see. Try this exercise. Ask a friend to look around them and make note of everything that is green. Now, have them close their eyes. Once their eyes are closed, ask them to tell you what around them is red. Almost everyone you ask will not be able to tell you what was red because they were focusing on what was green. Our perceptions work the same way. If we have expectations or biases that we are not aware of, we tend to see what we want to see. Likewise, if someone tries to tell us something we do not want to hear, we simply do not hear them. This is a common mistake that many people make. The key is to be aware of your own prejudices and expectations while at the same time staying open to everything that comes your way.
• Not listening to your feelings or gut reactions. Have you ever made a decision only to have it be followed by a major stomach ache or headache? This is your body talking to you. Our brains are constantly taking in more information than we can consciously process. All of this extra information gets buried in our subconscious. Although we may not be able to retrieve this information, our body stores it for us until it is needed. In moments when we need to make a decision, our bodies provide clues to the answer through feelings or gut reactions. Unfortunately, our society teaches us to ignore these feelings, but by tuning into your intuition, you will find that you will make much better decisions in the long run.
You planned on getting to work early to finish the project that’s due today, but now the car won’t start. You know you wrote the mechanic’s name down somewhere, but now you can’t remember where you put it. You frantically search through your notes, but you can’t find it anywhere. There’s no way you’re going to have time to finish your project. You start to panic.
The clock just keeps ticking.
Most of us have felt swamped at one time or another. With hectic work schedules, family responsibilities, and social engagements, there just doesn’t seem to be enough time for everything we need and want to do. However, there is light at the end of the tunnel. Although life will always provide us with its little twists and turns, once we learn to manage our time wisely, much of the day-to-day chaos in our lives can be reduced or even eliminated.
The first step in learning how to manage your time is to develop a general work schedule. Your work schedule should include time for yourself as well as time for the maintenance of your business.
After you’ve defined the major elements of your workload, the next step is to prioritize them by identifying critical deadlines, routine maintenance items, and fun/relaxation time. Answering questions like “How much time do I have to make this decision, finish this task, or contact this person?” will help you to start identifying what needs to be done immediately versus what can wait. Setting priorities depends on deadlines, how many people you must call to get the information you need, and whether you can delegate or get assistance from others. If you are involved in group projects, reserve additional time for communication and problem-solving.
Once you have identified your priorities, look at all of your options for achieving them. Evaluate and move forward with the ones you feel are the most useful for you. The only time to consider changing approaches mid-task is when you know the change will save time. If you are in doubt, it is usually best to consider in the direction you started.
By setting up your work schedule and identifying your priorities, you have already started down the road to more effective time management. Other time management suggestions you may find useful for managing both your business life as well as your personal life include the following:
• Contract out tasks. Contract out tasks you do not have the expertise to complete. Your client will appreciate your honesty and effort to get the best result.
• Start with the most worrisome task. Start the morning, afternoon, or evening with the most worrisome task before you. This will reduce your anxiety level for the next task.
• Complete deadline work early. Not only will this reduce stress and lighten your work schedule, but it will also give you more self-confidence about managing your schedule.
• Know your capacity for stress. When you are hitting overload, take the break you need (even if it is a short one) when you need it.
• Stay organized. Take time at the end of each day to briefly organize your desk and make reminder lists of tasks for the next day or week.
• Take advantage of down time. Allow yourself some down time between busy periods to review your schedule and reevaluate your priorities.
• Get physical. Physical exertion such as walking, bicycling, swimming, or organized sports activities helps to discharge stress. Stretching, yoga, jumping rope, sit-ups, playing with children, or doing yard work are other types of therapeutic breaks you should consider during times of stress.
• Have fun. Be sure to have some fun while working or playing; a good sense of humor can keep most problems in perspective.
• Divide up your time. Decide how much time to spend on business development, personal needs, volunteerism, and family. Start by allowing 25 percent of your time for yourself. Each time you make a commitment, set a timeline for your involvement. Remember that maintenance takes at least 25 percent of the time you spend on any project whether it’s business, marriage, or serving on the board of a non-profit organization.
• Build flexibility into your schedule. Your availability to family and friends depends on the flexibility you build into your schedule. Female business owners frequently have the primary responsibility for making sure family members are cared for when they are dependent or ill, so it’s necessary to leave some time in your schedule for emergencies or to have good backup resources. Get to know your neighbors so you know who to call on for help in times of crisis.
In the bigger picture, consider the relationship between your business life and your personal life. Be as realistic as possible when answering the following questions, keeping in mind what is most important to you:
• What are your long term goals? Your partner’s goals?
• Where are the conflicts, and where are the similarities?
• What is it that you really want to do? List all possible ways to accomplish this.
• How long will it take you to reach your goal?
• How do your timeline and goals affect your family (parents, siblings, partner, children)?
• How do your personal goals conflict with or match your business goals?
• How much time can you donate to community programs?
• Have you talked about your personal goals with your business partner?
• Have you talked about your business goals with your personal partner?
Don’t underestimate the toll that emotional stress takes on your physical health and your ability to concentrate on your work or enjoy time with your family. Make sure you have time for the important people and events in your life. Visit sba.gov for information.