“Bootstrapping” Your Startup is Not a Four-Letter Word
4 tips for bootstraping your startup to success
Not too long ago I spoke with an entrepreneur who “bootstrapped” what has become a great Main Street business. I’ve written about him before in Forbes, but he’s a great example of bootstrapping, so I think his story is worth repeating. A very successful entrepreneur in his native Scotland, he came to the United States for the love of a woman, but that wasn’t enough to create a credit score when he decided to stay and start a business. And yes, you read that correctly, he didn’t have a bad credit score, as an immigrant, he didn’t have a credit score at all.
As a result, Ross McGarvey decided to grow his small online marketing company organically until a particularly large opportunity presented itself and McGarvey needed more capital.
“Without capital, you can’t grow,” he said. “It takes money to make money.”
He was trying to finance what would ultimately become the largest Bluetooth marketing campaign in the country encompassing 126 shopping centers.
“I just didn’t have enough available capital and couldn’t get a loan from the bank to buy all the needed equipment,” said McGarvey. “I had to use my wife’s credit card to get things going, as well as getting help from other family members.”
The early years weren’t easy for McGarvey, but a willingness to learn new skills along with an “adapt and overcome” philosophy help him successfully meet challenges. He relied on his ability to learn and try new things as well as the talents of his friends to tackle new projects. When I asked him if he had any advice for other entrepreneurs, he said:
- Never be afraid to learn something new—Realize that success will likely require you to do things outside of your comfort zone. In fact, you’ll probably spend a good deal of your time doing things that you would likely hire done in a bigger company. Don’t be afraid of learning new skills. Years ago, I experienced this for myself. I had to learn to be a digital retouch artist to fill in the gaps in my business. I couldn’t afford to pay my retouch artists overtime, so I often stayed until the wee hours of the morning to keep our workload under control and meet our deadlines.
- Don’t get caught up in the idea that you must have money to succeed—There’s no question, adequate capital makes success a lot easier, but McGarvey suggests you can bootstrap, you can reach out to friends, you may even need to sacrifice, but if you’re really passionate about what you’re doing, you can figure it out. He suggests networking events are a great place to find like-minded people who can help your business grow—but you can’t stand around and wait for someone to approach you, you’ll have to do the approaching.
- Overcome the obstacle of “I don’t know how to do it”—You’ll likely need to learn and do some things that aren’t in your wheelhouse right now. Jump in and learn what you don’t know and don’t be afraid.
- Define what you need (the skills and expertise) and start searching for the right person—McGarvey feels like local startup communities are pretty thriving groups. If you look, it’s not too hard to find a partner. If you can’t afford to offer a big salary, you’ll need to be willing to give up some equity. He says it’s worth it and he’s made some great relationships this way since starting his business a few years ago.
He’s been in business long enough now that accessing capital is a lot easier, but says, “I need more of it than I did in the beginning.”
Bootstrapping isn’t the easiest way to start a business and is definitely not the fastest way to ramp up, but it’s the way many Main Street businesses get through the first several years. Please share your bootstrapping success stories here. I know McGarvey isn’t the only successful startup to bootstrap his way to a healthy business.
Click HERE to learn about the importance of collateral
Click HERE to learn more about financing a young, idea-stage company
Click HERE to learn about borrowing money from friends and family