If you’re considering starting a business, one of the first things to think about is funding. Where is it coming from? Your own savings? A loan? An investor or two? The way your fund your start-up has long-term consequences. Loans have to be repaid and investors are looking for quick and substantial returns.

Using your own funding to drive your business

So, what is a bootstrap business? It’s one that is funded entirely by its founder – usually using savings or redundancy payment monies, for example. The only money in the business is your own and the only way to make money is to sell your stuff. 

That’s a big ask, but the financial knife-edge that a bootstrap business is balanced on makes you focused, driven and determined to succeed – and it’s why these types of businesses often have a greater success rate than those that start with a bank loan or a keen investor.

According to Jason Fried, the software entrepreneur behind Basecamp and other leading web-based collaboration tools: “From Day One, a bootstrapped business has no choice but to make money. There’s no cushion in the bank and not much in the pockets. It’s make money or go home.”

What are the benefits of bootstrapping?

There are some real benefits to starting a business with your own money – however much that may be.

• Control – you’re keeping complete control of your business. No equity shares to an investor and no being told what to do by a lender. It’s your business entirely and you are in control of where it goes from here.

• It focuses the mind – companies that have a financial cushion often take more time with decisions and planning and can get too comfortable with the plans they make. When it’s your own money on the line, there’s a real sense of jeopardy and so you are focused on the things that will result in quick sales and money coming into the business.

• You can take risks – without having to run things past other founders or investors, you can make your own decisions and take bigger risks. As any entrepreneur will tell you, taking risks often leads to failure – but failure is what you learn from, and you’ll take the risks you believe you can afford, because it’s your money on the line.

• You can choose your own advisers – from accountants to business development; marketing to branding, you can choose who to work with to help your business make an impact and drive the sales you need. You can build a team you can work with easily, bring great expertise into your plans and develop relationships that will support you as you grow.

Schemes and support

Although you’re funding your business yourself, you can also take advantage of support schemes, and group schemes, such as those run by your local chambers of commerce or business hubs, which offer targeted support and advice to businesses as they grow. There will be a local business hub in your area, and you can find your chambers of commerce here. 

There are also lots of high quality training and resources available to bootstrap business owners. This training helps you to gain confidence across a range of issues, including health and safety, compliance, business skills and leadership training. You can access this for you and for anyone working in your business – it’s cost-effective and helps to upskill your business so you’re making informed decisions. We particularly like Toppa and Study Academy.

Of course, there are risks with a bootstrap company. The risks are all yours – and that means that if things don’t work out, you lose all your initial investment and potentially put yourself in financial difficulty. However, with the right support, good forward planning and a lot of hard work, you can start and build a business that becomes successful.

We have supported a number of bootstrap businesses, helping them to reach their target market in a professional way that helps them get the deals and sales they need.