Whether your million-dollar idea is selling granola or software, you likely share a common fear with new business owners across the world: money. It’s not easy to cover bills and expenses as you build your startup to success. And startups are rarely profitable from the get-go.
But plenty of entrepreneurs have found creative ways to self-fund their businesses. Try one of these methods to bootstrap your own startup without going broke and follow in the footsteps of other successful entrepreneurs:
1. Consult in the same field as your startup
Aside from providing cash flow to cover your expenses, consulting is an opportunity to make connections and establish credibility in the same industry as your startup. Use your expertise as a consultant to network, build your client base and gain authority. All will be beneficial to building out your startup once you’re ready to launch.
For example, look at Mike McDerment, founder of invoicing software FreshBooks. He worked as a full-time consultant as he built his software company on the side. Once FreshBooks became cash flow positive, McDermett was able to leave consulting behind and focus on building the company full-time.
2. Work a part-time gig
Perhaps consulting isn’t your thing, but you still need work just to keep the lights on. Your side job and your startup don’t necessarily have to be related. Prioritize working on your startup during your most productive hours, then take a part-time job on the side to make money. Whether it’s tutoring or doing hourly manual labor, all sorts of jobs can give you the cushion you need to build your business during “non-working” hours.
Jason Ross, founder of JackThreads (sold to Thrillist) did exactly that. He worked as a bartender at night while building his online e-commerce business during the day.
3. Keep your full-time job
It’s possible stay put at your job and still move forward with your startup. You can use your position to learn valuable lessons that will pay dividends when you start your business. The key is to identify how you can take the initiative to teach yourself new skills, either at your job or on the side. If you’re driven to succeed, you’ll be able to make the most out the resources you have available.
Sean Broihier is an entrepreneur who kept his job and still built his skill set on the side. He founded FineArtAmerica.com while working as an engineer in New York City. On top of his full-time position and launching his startup on the side, Sean also taught himself to write code.
4. Ask family members for a loan
Sometimes business and family don’t mix, but then again, sometimes they do. It can be risky to borrow money, but if you are confident your startup will succeed, it can help get you up and running.
Mom and dad have proven to be key supporters in some very successful entrepreneurs’ lives. Jason Lucash and Mike Syzmcak, the founders of OrigAudio, borrowed money from Lucash’s mom to help get their innovative startup off the ground. Their eco-friendly portable speakers were later featured on ABC’s Shark Tank. So, where are they now? They’re running a multi-million-dollar business and no longer have to rely on mom and dad.
5. Move in with your parents
Maybe mom and dad won’t or can’t offer you a loan, but they might give you a roof over your head. In fact, living with your parents after school has become the hot new trend; 85 percent of recent college grads move back in with their parents.
Early on, Brendan Synnott and Kelly Flatley made this social sacrifice for their business. For 18 months, the founders of Bear Naked granola worked out of their parents’ homes with no income. The company’s first office space was a spare bedroom in Kelly’s parents’ house. Later, they sold their company to Kellogg for $60 million.
Could any of these tactics work for you?
Every successful entrepreneur needs to make a sacrifice at some point or another. You have to decide which sacrifices are right for your startup to achieve your goals. If you need a little motivation, look to those startup success stories; the sacrifices were well worth it for these entrepreneurs who now lead multi-million-dollar companies.
James Garvin is the author of Bootstrapped: How 75 Entrepreneurs Successfully Bootstrapped Their Startups and How You Can Too.