This story is vaguely familiar as most startups find it challenging to find investors willing to take the risk of funding their business. If you look at it in a lender’s perspective, you’d understand how much of a risk it really is but then entrepreneurs have one quality that not even banks could put down: the determination to persevere.

Because of this attitude, entrepreneurs find ways to sustain and grow their businesses but it isn’t an easy road to trudge. Mistakes are but natural and I challenge anyone who would dare say that they haven’t made a mistake at some point in their entrepreneurial ventures.

Here are some mistakes that entrepreneurs may make while starting a business:

• Buying new supplies or hardware. Bootstrapped businesses are supposed to be careful about spending. If you can make use of second-hand supplies which has a few more years of use on them, why not do so? Once your business is generating enough income, you can always buy new ones but at the infancy stage of your business, make do with what you have. Anyway, it would serve your business the same way.
• Moving too fast. Okay, I’m a big fan of innovation but you have to build a solid foundation first and in order for you to do so, you have to take baby steps and you’ll find that slowly but surely, you’ll get to where you want your business to be.
• Having an aversion to change. As a business owner, you have to learn to easily adapt to changes in trends especially within your industry. As a bootstrap startup entrepreneur, you have to be flexible and adapt yourself accordingly.
• Not keeping track of things or lack in organizational skills. The more you know about the ins and outs of your business, the better. Don’t just delegate a task to an employee without knowing how to get it done yourself. You need to track everything and honing your organizational skills is definitely a must for business owners.

Bootstrapped businesses have a tendency to be ramen profitable for the first few years of operation. It isn’t necessarily a shame if your business profits do not skyrocket the first month you started. In my opinion, it isn’t necessarily true that the more capital you spend on a business, the higher the probability that it’s going to pay off. Ramen profitability means that your business is making money and that’s good news right there. Sure, it isn’t enough to shake your bank account out of debt but it should give you the motivation to do better and be more because you know that your business would take off in time.

What could be worse than ramen profitability? It’s no profit at all. Your dream business may not be up there with corporate giants or aged brick and mortar small businesses when it comes to cash flow and profit and it is but natural that you may feel a bit disheartened with the fact that you got a smaller profit than what you’ve initially dreamed of. The important thing is, you should not pull out the business just because it didn’t perform the way you expected it to. Apart from paying the bills, your suppliers, liability insurance, your offshore accountant and other business-related expenses, you should not even wonder where your profit goes. Treat it as milestones that your company can realistically reach. It would keep your priorities straight plus you would have that nagging sense of purpose and pride as you slowly watch your profits increase and maybe the next time your business turns a profit, you would have the luxury to eat steak instead.

Today, there are various tools which are relatively cheaper but can still do the job as well as the expensive ones can. Some companies even offer beta testing and these are ideal for a startup which doesn’t have a lot of capital to spend. Listed below are 4 of the well-known tools which may be beneficial for your bootstrapped business.

Blogging has taken the place of conventional marketing strategies. More entrepreneurs can see now how joining the blogosphere is beneficial to their business, no matter if they’re operating it online or off. You could start out a blog for your business by signing up for a WordPress blog. It is free and easy to set up but of course it wouldn’t give you the flexibility and power that paid web platforms would.

One other marketing strategy is to grow your network via social networking sites. Being socially active online isn’t just for sharing private thoughts for your friends anymore and if you think that that’s still the case, you might have been living under a rock for the past few years. For every online networking site, there are advantages and disadvantages so you have to know which one to use that is aligned with your goals as well as the one which holds the most potential for your business.

If you need more manpower but cannot afford to hire a full-time employee, consider looking for a freelancer. You can try posting job ads in Freelancer or Odesk for project-based jobs and the good thing about it is, it would still be within your budget.

As for analyzing the performance of your online business, you could check out traffic sources and how it affects your site by using Google Analytics. It is free and you would be able to check how effective your marketing efforts are with the use of this tool.

There are many opportunities for growth available for entrepreneurs. It may be a tough decision to break away from that 9-to-5 job because of the risks that a startup may face but as for funding, it is all blown out of proportion. One might think that in order to compete with corporate giants, you would have to start big. That’s not the case. I’m not much of a biblical person but take the case of David and Goliath. Small businesses have always been David and you would just need to figure out where to hit what hurts them most: their target market. The lesson? Start small, be resourceful, make a market research and even if you are using free or inexpensive tools, you would still have a fighting chance to make it in the business industry.

Work ethics is very important. If you’re working for an employer whether you like your job or not, you automatically make a commitment to give your best in exchange for your paycheck. This is difficult to do because you have your own business to worry about and starting it from scratch requires focus, attentiveness, dedication and patience. Working for a different employer means that you need to hold off in planning or really, doing anything that concerns your own business at least until you’re off the clock. So how can you be two people (both employee and self-employed) at the same time? Here are some tips to help you out.

Tip #1: Create a reasonable schedule and follow it.

Starting a business may mean longer hours for the aspiring entrepreneur and this would undoubtedly be one of the many conflicts you can have if you work at the same time. Time management is the key ingredient here. Excitement on your new venture can pretty much take over you but in order for a small business to thrive and succeed, it should be stable and well thought of (i.e. well-planned). It takes time and patience to start a business. Don’t go rushing off to make half-baked decisions about your venture that might end up destroying what you’re trying to build.

Tip #2: Make an achievable and manageable timeline.

As I have mentioned, balance is key to being able to work and run a business at the same time. You have to be specific about what you’re targeting or what you want to achieve in the short term so that you could make a timeline of your goals. This would help you in knowing what to expect now and what to expect next.

Tip #3: Keep moving forward.

You may suffer some setbacks especially since you are in essence serving two masters at once: yourself and your employer. The important thing you need to keep in mind is that it is natural for anyone to be let down at any point. You just need to persevere and be persistent enough to get the results you want.

Finally, you have to motivate yourself.

There are some people who use money as their motivation to get ahead, there are those who are driven because of the challenges they face and there are those who get motivated because of the goals they are trying to pursue. Wherever your motivation lies, you have to keep track of what it is and why you are doing it because it would help you to focus and not lose sight of what you want to achieve.

1. Keep your to-do list short. Time management is a critical aspect and to be able to accomplish everything, you need to concentrate on the tasks at hand.
2. Streamline the technology you use for your business. You might need to set aside budget for your business but if using tools mean that you would make running your business easier, it would be well worth the investment.
3. Pay your creditors as soon as you have the cash on hand. You might not be able to pay off bigger loans but small expenses such as your electricity bill or even your rent (assuming you are renting an office space) would be helpful in keeping your finances healthy and your credit score untainted.
4. Be selective in hiring a new employee. This means that you should already know what you are looking for in a prospective employee. If there’s a vacancy needed to be filled, be as detailed as possible in the job responsibilities and skills for the available position.
5. Don’t go overboard in holding staff meetings or team buildings. If an email update will suffice, then just send out emails. This would save you time and energy which could be better spent on other important things such as keeping your product offerings up-to-date.
6. Leverage the power of social media. You don’t have to spend so much money on marketing. You would just need to have good business connections and constantly engage with the community.
7. Learn to delegate tasks to your employees. Nobody said that being an entrepreneur means that you are in a one-man show. Your employees are there to help you out with the load, let them.
8. Use only a few service providers if at all possible so that your supply chain wouldn’t be too complex that you don’t even know who you got your supplies from.
9. Your customers might not be always right but listening to them would help you improve your business operations and offerings. Make your customers feel that their ideas count. You can ask for comments, suggestions and even get their complaints. This is called data research and your customers’ input regarding your company is invaluable as it would save you a lot of money in market research costs.
10. Set aside some personal time. No one can be efficient without enough rest. Try as much as possible to create a balanced life. After all, your business would suffer more if you get too stressed out to actually run it. The lesson? Run your business, don’t let it run you.

Here are 5 tips to significantly increase your chances to succeed in a bootstrapped business:

1. Look to big corporations as inspiration. There are of course obvious differences in running a major corporation and that of your small business but that’s not a reason not to get best practices that would work well for your business as well.
2. Strive to be more efficient than you already are. The strength of any company, no matter its size is measured by the competence of its employees.
3. Sure you only have a small number of people in your roster but that doesn’t mean that your company is any less able to be a fierce competitor in the market. Do not try to expand your team if it’s not feasible. Meaning, if your budget does not allow it, don’t hire more people. Work with those people who are already working for you and inform them that you will be giving them multiple tasks.
4. Be on constant lookout for latest developments to help your business. Check out different small business resources such as Small Business Trends to guide you on new products and services that would be beneficial to your business. If your cash flow won’t allow it, try checking out beta sites or freewares. Once your business expands and you find that there’s a need to upgrade to paid versions, then that’s the time that you decide on which one would be the best value for your money.
5. If you a have a short-term project (read: you need it done right away but you don’t have enough funds to hire a regular employee plus it won’t take a long time to do anyway), hire a freelancer instead. There are sites such as freelancer or odesk which could help you in hiring freelancers.

Bootstrapping your startup is never an easy process and running it conservatively (financially speaking that is) is no mean feat either. But it can be done.

• Send out newsletters that are informative rather than a full-blown pitch about a great new product that your company is promoting. Put yourself in the shoes of your customers. What would you be more interested in reading? What would make you stop to read this one email from this one company you subscribed to?
• Use your company name. If you are sending an email to a close, personal friend, you can use your own name in the “from” line. If you’re sending out an email to customers, you should use your company name so that they would know immediately who it is from.
• Branding is very important. You should include your company name in the subject line too.
• Do a test to find out what results are best for you. By doing a split test, you can check out the best time and day to send your email to get a better chance of being noticed by your customers. Once you have done this however, you have to ensure that you send out your emails regularly. It has to be sent out on time, every time. Remember, consistency is important.
• Always include a signature with your personal details, company details, link to your website as well as an unsubscribe link.

Apart from those I have listed, what other ways do you use to ensure that your subscribers remain hooked? Feel free to share it in the comments below.

Of course you have to start a business that’s feasible as a home-business, one that you could literally use your garage (or your living room, spare room, any free room available in your house) for. You have to be realistic. You cannot start a manufacturing business in your neighborhood, can you?

What’s important is that if you run a business at home, your overhead expenses would be more manageable (which when translated means, less cost, less money, less problems). You have to remember though that even if you are just starting the business at home, it doesn’t mean that you can do away with business plans. Your business plan would let you know whether your business is viable or not. Preparing a business plan is what sets apart a sustainable home business and a garage sale of sorts.

Pros:

• Venture Capitalists have had prior experiences with companies in a similar situation as yours so they could give you advices and tips which works.
• If you need additional funding for the expansion or growth of your business, venture capitalists may provide you with this which of course is still highly dependent on market performance and other factors.
• Venture capitalists also have a wide network. They could help out in providing you with key staff plus they would also be helpful in managing your business.

Cons:

• While it may be relatively easy (easier than asking loan from banks, that is), it could take some time before the funds are released. So if you are looking to use VC Funding as a startup funding option and you are not pressed for time, you may consider this.
• Equity financing means that you are not at the helm of your business. Venture capitalists have a say in your business too. So if you’re the type of person who wants to control the whole operation, you might want to rethink your options.
• You would have a smaller share in the business.

Bootstrapping

Pros:

• It is simple and straightforward.
• You are in full control of your business
• You get to keep all the profits
• You’ll learn to be more self-reliant and resourceful

Cons:

• Expect to have longer hours since you’re doing all (or most) of the work
• If your business suffers financially, you’d shoulder it all on your own
• You have sole responsibility in your business. When your business encounters any problems, you would need to solve it. You also need to come up with ideas by yourself. You have no team you could depend on.

Any of these two options have their advantages and disadvantages. The thing about being an entrepreneur and having an entrepreneurial spirit is that if you are really vested in your ideas and in your business, you could transform any disadvantage and work it to your favor.

The cost for product testing and product development may be a hindrance to business expansion. However, there’s an approach that some business owners have not yet considered: Microtesting. According to The Bootstrapper’s Guide to Launching New Products, the microtesting method is an example of a business trend. If a company wants to launch a new product or service, what can be done is to market the product first through social media. You would just need to list the features of the product you would like to launch, spread the word of your product idea to your target market ad once there’s a paying customer, you can then start developing the product.

This of course depends on the timeframe you need for the product to be developed. What is important is that you should set expectations to your paying customers that the product would not be ready until such time. The good thing about microtesting is that it would prevent the business owner from paying for development of a product which would not be appealing to their market. If your business is to sell through eBay or other online auctions, you may want to start by getting a small number of items and see how customers respond to it before ordering it in bulk from a wholesaler.

Microtesting is a great way to gauge your customers’ reaction to the product and whether they would buy it or not without spending too much on checking its viability. Using this method not only saves the small business owner some money but it would also help to know when to abandon the product/service all together which would save time and effort as well.