Any entrepreneur or business owner knows that the success of a new endeavor requires more than just a great idea and passion—you need money.
And without external investors funding your project, many are left bootstrapping their business. That is, they build their business from scratch using personal savings, existing resources, and lots of financial savvy.
Here we look at what bootstrapping looks like in the 2024 business and economic climate, and offer three key areas to leverage so you can make it work for your business.
What Does Bootstrapping Look Like in 2024?
While creative and ambitious professionals have long sought to start their own businesses, there’s been a huge increase in recent years.
The pandemic, normalization of remote work, uncertainty in the job market, and changing interests have all led more people to pursue their dreams and branch off on their own.
The Small Business Administration reports positive trends in all small business economic factors including the number of firms, job creation, and income in recent years.
In January 2023, Axios reported on key developments in post-pandemic entrepreneurship: a historic number of business applications were filed during the start of the pandemic and remains high—in 2022, 1.7 million applications were filed for new businesses.
Despite this interest, there are real concerns and challenges for entrepreneurs and business owners. Data from the past decades reveal that around 20% of new businesses fail in the first two years and 45% in the first five years—only about 25% of new businesses make it to 15 years or more.
With financial hurdles being the top reason why small businesses fail, it’s more important than ever to strategically plan how you’ll bootstrap your business to success.
3 Practical Areas to Bootstrap Your Business
If you’re bootstrapping your business from the ground up, you need to know how to set yourself up for financial success by monitoring expenses and finding ways to save money.
Here are three key ways to manage your finances while launching a new endeavor.
1. Rethink Your Workspace
When launching a new business, it’s essential to manage your costs. You’re starting with minimal capital and need to spend wisely to ensure you become profitable as quickly as possible.
One of the biggest line items for many businesses is office space. Renting a traditional office can be costly and, often, not necessary. Because typical offices have rigid contracts, you may be paying for more space than you need or don’t have the flexibility to re-negotiate terms that suit your expanding business.
Coworking spaces offer a solution. They have flexible contracts and spatial diversity that allow you to work how you want, only paying for what you need.
Consider these scenarios that demonstrate how coworking spaces support entrepreneurs:
- A team of remote contractors meets together once a month in a bookable meeting room to brainstorm and get on the same page.
- An entrepreneur uses a dedicated desk for a few months to focus and get their business plan launched before switching to a part-time private office when they only need space a few days a week.
- Two business partners use a coworking membership to work at their own pace, collaborating as needed.
- A growing business works from a private office that accommodates its team. After a few months, they scale up to a bigger office to make room for new employees.
Whatever your scenario, a coworking space like The Post Workspaces offers the ultimate flexibility, allowing you to do your best work without overpaying for space.
2. Tap Into Your Network
Networking and building a strong professional community is another benefit of using a coworking space as a bootstrapping business. Working alongside a diverse group of professionals helps you in a few key ways:
- Sharing ideas: Casual “water cooler” talk with other coworking members can be a key way to drum up new, creative ideas. When you’re in close proximity to other professionals, it’s natural to swap ideas or have conversations that can lead to something impactful for your business.
- Networking: Formal events and networking opportunities also allow you to make new professional connections. This can, again, lead to new ideas or even formal partnerships and collaborations.
- Collaborating: By networking with other professionals, you can start to collaborate with them on your projects. You may sit next to a graphic designer or photographer who you can then hire to help your business.
Another way to tap into your network, whether you’re in a coworking space or not, is to leverage the growing gig economy. Building a team of freelancers and outsourcing your tasks helps you save money because it frees up your time to do what you do best. Instead of doing a sub-par job on something outside your strengths, you can hire someone to do it quicker and better.
Hiring a virtual assistant can also be a cost-effective way to get help for your business.
3. Leverage AI
The last major way to bootstrap your business in 2024 is leveraging AI. Thanks to affordable (often free) and accessible AI platforms, you can save time and money on many tasks, including:
- Customer service: AI-driven chatbots for customer support, which reduces the need (and cost) for human customer service representatives,
- Analytics: Predictive AI analytics can help you manage things like inventory and supplies to minimize overstock and waste.
- Automation: AI tools can simplify and automate mundane or routine tasks such as scheduling or taking notes.
- Content creation: Speed up writing, editing, and other content-related tasks with helpful AI programs.
AI’s main power lies in its ability to help you do things more efficiently, freeing up time to work on tasks that are impactful for your business and help you earn money. To get started using AI, try out some of these ChatGPT business prompts that can help optimize your operations.
Financial Management for Bootstrapping Businesses
These three tips for bootstrapping in 2024—leveraging your workspace, network, and AI—build on the underlying key to business success: strong financial management.
For example, AI can certainly help manage your finances through automation or tracking, but it doesn’t necessarily replace working with an accountant, tax professional, or financial advisor. Each business is unique, but most will benefit from external professional help if you don’t have someone who is financially savvy on your team.
Aside from working with a finance professional, here are some other high-level tips on keeping your money matters in order when bootstrapping a business:
- Know your numbers: Small businesses need to know their numbers—income, revenue, expenses, projections, taxes, and so much more. Take control of your small business budgeting by getting clear on these basics, potentially with the help of a professional. Once you do, you can set goals and make decisions that align with the reality of your financial situation.
- Determine your KPIs: Key Process Indicators help you stay on track financially. Know which small business KPIs are most relevant to your business and stay on top of them.
- Focus on profitability: When bootstrapping your business, it’s essential to turn a profit as soon as possible in order to keep moving forward. Profitability tips for small businesses include strategic pricing, automation, and reducing low-value activities.
Bootstrapping a business may be a more difficult route to succes than getting a large financial investment, but it’s not impossible. Starting something from the ground up requires deep knowledge of your business model, goals, and financial management—all necessary to achieve business success.
As you work hard to build your dream business, follow these bootstrap tips for 2024 to make it a bit easier on yourself.
And if you’re looking for a cost-effective professional workspace where you can get your business up and running, you’ll find it at The Post. Book a tour of The Post today.