I started my entrepreneurial dream of owning a digital marketing company with $5,000 in my pocket. Looking back, it’s hard to say how much of that money I actually spent — my personal and business expenses sort of merged in my battle to create a higher income. What is clear, however, is that money mattered far less than clients in the early days.
To become profitable quickly, I needed five or six paying customers. I took on clients before I quit my full-time job, promising them (and myself) that I would deliver results as if I were responsible for my company and nothing else. With that done, running the company became a balancing act of keeping the pipeline full without overcommitting or hiring for anything I could do myself.
When you first start a business, you’re often worth nothing. Until you get paid, you may make $0 per hour. You often have to fight to raise that figure by filling your time with people who will pay you as much as you want to earn, and then by upping your market rate until every hour is spent making the maximum amount of profit. I never turned down a job in the beginning, and because of that early drive, I’m now free to work with whichever companies I like.
In my experience, bootstrapping is the best way to run a company. When you’re responsible for everything, you can learn more, keep things lean and quickly understand what makes you valuable. Forget all the talk about funding rounds and equity — I believe that starting from scratch is hands down the optimal choice.
How My $5,000 Helped Me Get Started
I’m not the only one who believes in bootstrapping. Many startup funds come either from the entrepreneur starting the company or that person’s immediate friends and family. The self-funded reality doesn’t match the narrative that entrepreneurs are all after venture capital.
So many people convince themselves that they need marketing teams, sales departments, offices and service staff. I learned quickly that until you can grow to the point where you need those things, the only help you need is your own. In my experience, money doesn’t lead to success — success leads to money.
I’m not saying that I’d never accept funding for a business. Sometimes, a company needs cash quickly to take advantage of an opportunity in the market. However, I do believe that every entrepreneur should bootstrap at least one business to get an idea of the work ethic that success can require.
I didn’t spend my savings as much as I relied on it to keep me fed and sheltered. If I lost clients and needed to pay bills, that small cushion kept me afloat. I never lost a client in my first couple of years, but I knew that I could take risks and push harder because I wouldn’t end up on the street if I failed.
Of course, I did make a few early investments in my digital marketing company. I needed a Moz subscription for search engine optimization. I needed a Hootsuite account for social media. Those expenses weren’t major, but without a billionaire backing (and watching) my every move, I had to make every decision count.
Necessary Sacrifices To Fly Solo
Because I didn’t have funding, I had to keep a close eye on my finances. Anyone looking to bootstrap a company may have to be ready to give up four things:
1. Personal Time
When you are the company, all of your time can be company time. Every second you spend on something that doesn’t help you grow is potentially a second wasted. It took me four years to start taking a three-day vacation every month, but for the first three years, I never clocked out.
2. Unnecessary Household Expenses
If it isn’t necessary, chop it. I lowered every fixed household expense I could and set a strict budget on nonfixed items. I made a spreadsheet to track my income and expenses, which I still use four years later.
3. Hobbies And Leisure
Your success often depends on your commitment, which means your business also might be your hobby. Going out with friends, seeing movies and taking weekend trips all took a backseat to my business in the early years. I missed out on some fun, but now that my company is thriving, I can have all the fun I want.
4. Stress-Free Living
Not many people understand the grind of bootstrap entrepreneurship. Many entrepreneurs are stressed-out people. If you commit to growing your own company, you might go through bouts of depression or anxiety. For me, the thrill of the rise to the top made it all worth it, though.
Was it worth it to sacrifice so much to grow my business without funding? Without a doubt. Because of the sacrifices I made, I own 100% of my company and all the profit I generate. I don’t have to ask the board for permission to do anything. I didn’t just earn money — I earned freedom.