Starting your own business is a big step, and it can be scary. But there are ways you can start testing the waters before diving into full-time entrepreneurship. This is where bootstrapping comes in. Bootstrapping your side hustle is a great way to gauge interest in your startup, and build it up in a cost-effective manner. Here’s how:
Side Hustles Are the New Norm
A side hustle is a way to test your idea and business before diving into full-time entrepreneurship. It’s a great way to get an idea about what you might be able to sell, and it allows you to keep your day job while keeping your mind open for other opportunities.
Maybe you don’t want to start your own business, and that’s okay too. You could use services like Chargehound instead, to rent out your EV charger-equipped parking space, for a nice profit while doing very little.
What Is Bootstrapping?
Bootstrapping is a business model in which an entrepreneur starts a company with little or no outside financial help. The idea behind it is that if you have to work for yourself, then you might as well do everything on your own dime and without taking out loans from anyone.
Bootstrapping can be used to fund the initial stages of a startup, as long as you have enough savings or can find other ways to generate income while developing your idea. It’s also possible to bootstrap during later stages, when there are more profits coming in every day—that way, you’ll be able to reinvest what you earn into further product development or marketing efforts (and potentially even hire employees).
When it comes to bootstrapping, there are lots of options out there: from creating products or services yourself, to buying wholesale and reselling items at a lower price point, or even just giving away free content on social media platforms like Instagram. One thing all these options have in common is that none require any significant startup capital up front — which means you don’t have to waste time trying (and failing) with something that might not pan out if you’re going into this blind.
Bootstrapping allows you to build up your business in a cost-effective manner. You’re not spending any funds on fancy logos or marketing campaigns until you’ve got some kind of steady income coming in. Your focus is on getting customers interested and creating something they need or want before focusing on brand recognition, which will come naturally once people see how great your product or service is.
3 Awesome Ways to Bootstrap Your Side Hustle
1. Savings and Investments
The first step is to make sure that you have the money you need for your startup. If your business is going to cost a lot of money, make sure that it doesn’t eat up all of your savings or investments. You should start with a small amount of money and then grow from there.
You can also invest in stocks or mutual funds if they are safer investments than buying into an actual business. If you do want to invest in an actual business, then make sure that you know what it will take for it to be successful before investing any money into it.
Using your savings is a great way of starting up a side hustle. You may have some money lying in the bank and all you need to do is take a loan from that money. This can be an excellent option if you don’t want to put in much effort or time into bootstrapping your side hustle, but still want to start it up quickly.
2. Personal Loans from Bank, NBFCs and Peers
One of the easiest ways to get your side hustle started is by borrowing money from a bank, NBFC or peer-to-peer lending platform. The interest rates on personal loans are substantially lower than for business loans and there are fewer requirements for documentation and paperwork. You can repay the loan in instalments over an extended period of time as well.
One thing to consider is that these types of funds may be harder to obtain if you’ve had trouble repaying previous debts or paying back student loans. However, so long as you have a good credit record (or at least don’t have any recent defaults or bankruptcies), chances are good that you’ll qualify for a personal loan with reasonable terms (you’ll just need some patience if applying through an online portal).
Banks and NBFCs can provide you with small business loans for startups very easily, but their terms and conditions are usually stringent. If you get approved by them and accept their terms, then it will be easier for you to get started on your venture without worrying about getting rejected by banks because of bad credit history or lack of collateral security for the loan.
However, there are many other factors which make it difficult for people who don’t have any collateral worth mentioning such as land ownership papers etc., so these might not always work out in favour of applicants who do not have sufficient funds.
3. Home Equity Loans
If you have a good credit score, this is an easy way to fund your startup. It’s basically like borrowing against the equity in your home. You’ll want to shop around for the best interest rate and terms.
Here are some questions you should ask: How much can I borrow? What are the terms of the loan? Is there any prepayment penalty? What’s the APR on this loan? Home equity loans are usually fixed-rate loans with 1 or 3 year terms; however, some lenders offer balloon payments with shorter terms if needed. If you’re unsure what kind of equity exists in your home (and not just how much money), ask a realtor or mortgage broker if they would be willing to help investigate that for you.
Should you Bootstrap your Side Hustle?
Bootstrapping your side hustle can be a great way to test the waters for your startup, and build it up in a cost-effective manner.
Starting with nothing is really hard, but if you’ve got an idea of what you want to do and have some money saved up, then bootstrapping may be right for you. When starting with no money at all, it’s important to focus on building something that can provide value as quickly as possible—and make sure it’s something people will pay for. You need to put yourself in the mindset of being able to sell whatever product or service you’re offering before moving on from this stage.
Conclusion
With the economy being in a state of flux, it’s wise to look for ways to reduce costs and keep lower overhead. Bootstrapping your business is not only good for your pocketbook, but can give you an edge against competitors who are trying to do everything on their own. There’s no reason why you shouldn’t be able to start up on your own terms or at least with minimal risk.