I don’t blame business owners for dreaming of becoming unicorns. Who wouldn’t want to receive a massive cash infusion and become a respected “player” literally overnight? It’s a venerable American dream—the rags-to-riches story. It should go without saying, though, that unicorns are extremely rare (hence the name.) The vast majority of startups will have to self-finance. Like me, their owners will have to bootstrap the companies from abstract concepts into concrete realities. When I launched my company, for example, I had no idea it would soon become an award-winning, highly successful company. What I did know was that I’d work my tail off to make it a success.
Over the last decade I've acquired some valuable insights during my journey, which I’d like to share. Here are seven tips on how to bootstrap your company:
- Define your version of success. If you insist on becoming a unicorn, anything short of that goal represents “failure,” including the much-maligned “lifestyle business.” But those who aspire to build a lifestyle business or micro-business would disagree. Determine what success means to you. For me, success is company that’s built to last—one that recruits and serves talented, committed employees. Don’t fall into the trap of believing that someone else’s definition of success must be yours. Your company doesn’t have to be the recipient of a venture-funded windfall. It doesn’t have to be featured on the cover of Forbes or Fortune. It only has to be what you want it to be.
- Focus on sustainable profits. Some entrepreneurs seek the fast exit instead of the long slog required to build their companies. Growing a company is much more difficult than becoming a unicorn—and rarely as glamorous. It requires that you invest huge quantities of time in developing a top-quality workforce, a core mission and a culture to which you are truly committed. For me, creating a profitable and sustainable business was the top priority. This is how the overwhelming majority of businesses are grown.
- Forget about office space. In the beginning, many startups have no reason to lease office space. Thanks to modern technology and distributed workforces, there’s never been a better time to build a bootstrapped business from your own home for minimal costs.
- Use your own tools. Similar to #3, if you already have a functioning computer, printer, desks, filing cabinets, etc., don’t buy additional ones exclusively for the business. Focus on building the organization rather than spending money on new furniture, equipment and supplies that you don’t really need.
- Learn to wear different hats. Learn to do things for yourself. Acquire new skills and become a jack of all trades, if necessary. Initially, you probably won’t have the resources to hire enough people. When you’re bootstrapping a business, you have to be creative. You have to take on a lot of responsibilities yourself. You may not be the ideal candidate for every position, but you’ll have no choice but to learn how to wear many different hats. Embrace those roles and enjoy them as best you can.
- Defer the perks. Avoid the temptation to pay yourself an oversized salary and spend money on perks to boost your status. Your business should be the perk. If you think you need an extravagant lifestyle to be a “real” business owner, you may not be a business owner for very long. Your company should be your fun, your glamor and your incentive to get up in the morning. That’s what should get you excited and invigorated. In the beginning, gratification will have to be delayed, and frugality pursued. For a while, you may have to pay yourself almost nothing so you can reinvest all the company’s earnings.
- Run lean, but look larger than life. Yes, you’ll need to contain costs. At the same time, you’ll need to project a professional, larger-than-you-are image. You’ll need to promote yourself and the company with high-quality marketing materials, a website and social media campaigns. You’ll want to give the appearance of the company you hope to be in 10 or 15 years. Doing this will help you create a larger-than-life image at virtually no cost. Remember, you’ll be competing, in some cases, against multi-billion-dollar companies with legions of sales and marketing professionals. Run lean, but don’t look like you’re running lean.
Ernie Bray is a high-energy, award-winning American entrepreneur, CEO, author and podcast host. Bray is a respected advisor in driving strategic impact in the areas of process improvement, strategy, management, social media, marketing and innovation.