My life after graduating from George Washington University in the spring of 2009 began inauspiciously: Like millions of Americans, I was on the front end of what would turn out to be an extended economic recession, with little in the way of opportunity and a deep desire not to move back into my parents’ house. To avoid that fate, I decided that I would start my own company — and I would make it work.
That same year I formed The Cutler Group, a public relations agency that helps innovative technology companies achieve high-value media coverage. In the beginning, the firm’s assets were limited to $200 in my bank account. My business supplies included a printer, a laptop and a desk. I worked out of my bedroom and some local coffee shops. This is what is called “bootstrapping,” though my friends on the Young Entrepreneur Council have always said that it’s really more like shoe-strapping — boots are too expensive.
To pull yourself up by your bootstraps was originally said ironically, as a means to convey that the task necessary was impossible to perform. But as thousands of young entrepreneurs like myself have found, starting a business with no outside investors or capital isn’t impossible — provided you’re willing to work hard and to deal with the inconsistencies of startup life.
It’s very easy to make critical mistakes when first starting out, especially if you’ve never run a business before. In the interest of seeing more young entrepreneurs find the path to success, I’d like to share five tips on bootstrapping that can help other new companies not only survive, but flourish.
1. Don’t get an office. When you’re first starting out, an office is unnecessary overhead. There is only one thing an office will service at this early stage, and that is your ego. There are options like having a virtual office, or running your team remotely. Spend your money elsewhere — namely, on your team and its resources.
2. Get accounting software on Day 1. Keeping up your accounting ensures that your records are maintained — and once you start a business, every move you make counts. Keep track of your expenses, profits, salaries and overhead costs in the beginning, rather than getting surprised by how much you owe your employees later.
3. Ignore lawyers — they kill deals. Lawyers are, by nature, very cautious. They get paid to make you doubt, revisit and turn down contracts, in the interest of making them more favorable to you and not your client. This can be very off putting to clients, especially when your company is new to the industry. Lawyers need to be consulted for certain issues, but don’t let them run your business.
4. Pick a niche and become a specialist, not a generalist. As with the medical profession, being an expert in a particular area will help you fill specific needs, rather than having a general idea of how to handle the situation. Generalists aren’t able to sink their teeth into single sector or sub-service — they’re just doing a little bit of everything. If you are great at one thing, your company will become known as the go-to firm for that topic. Not only will you develop a strong reputation in your field, but you’ll have greater synergy with your clients.
5. The greatest marketing campaign is offering a great product/service. When I first started The Cutler Group, we signed clients by promising a performance-based model: If we weren’t able to get them press coverage, we barely got paid. By upholding our promise and delivering, not only did we begin lucrative partnerships with our current customers, but those same companies recommended us to other firms looking for publicity. Putting a great product on the market is its own kind of campaign — in this world of hyper-connectivity, vast networking webs and instant communication, if people like your product, more will come running. Let your service do the talking.
The tips above are part of a larger idea: be smart with your resources. By spending wisely, not overextending in the beginning, and letting your business do the talking, success is within reach. These same ideals helped my firm grow from $200 in the bank to a company that literally spans the globe.
As thousands of other businesses that have succeeded without outside investors prove, bootstrapping (or shoe-strapping) is not only possible, but can be, in many ways, the key to success. Let these principles guide your business and the rest will fall into place.
Image Credit: Patrick Baz/Getty Images