All businesses, big or small, on the side or full-time, come with expenses. They could just be startup costs, or you might need to account for ongoing or reoccurring expenses. Either way, the money you need to spend to keep your side business running has to come from somewhere.
Hopefully, your gross profits are enough to help you handle the costs of keeping your work on the side going — so you can keep bringing in the extra cash.
But even if you’re pretty thrifty and savvy with your personal finances (after all, you probably started a business on the side to earn some extra money to further your financial goals, right?), it can be too easy to mindlessly spend on anything you can write off as a work expense.
Saying, “it’s for my work” or “it’s for my side business” can evolve into an excuse that allows you to buy or spend more than you really need. After all, your side business provides extra profits for you — so it’s not like Right?
Well, maybe. But consider changing your mindset. Ask yourself, how much more cash in your pocket would you have if you made an effort to start bootstrapping your side business?
What Does Bootstrapping Mean?
When it comes to your work costs, when you say you’re boostrapping your business it means that you’re highly selective with how you spend your resources (financial or otherwise).
You don’t have much of either at your disposal, so you choose what you spend with care. If there’s a way to do something with less materials or for a lower cost — or for free — that’s the option you’ll take.
Although this may add up to more labor or work on your end, it does keep more of your profits in your own pocket. You’ll have more cash from your side business to use for your financial goals like savings, investing, or making a big purchase.
How Can You Start Bootstrapping Your Side Business?
If you’d rather save more of your hard earned money than spend it, consider these ideas for boostrapping your side business:
Be willing to learn new things. If you’re bootstrapping it, you probably wear many hats for the work you do. You may be the contractor, the PR person, the webmaster, the bookkeeper, and more. To keep your business budget low, you should always be willing to continue to learn new things so you can add to your hats if you need to.
Of course, everyone has a limit and you can’t do everything all the time. At some point, you’ll need to outsource. But if you’ve been receptive to learning things as you’ve gone along, you have more options to choose from when you do bring on someone to help you. Because you can do so much, you’re not forced into finding someone for X, Y, or Z because you don’t know anything about it.
Barter services. If you do need something you just can’t do yourself, before you pay someone else to do it, consider bartering for it. For example, if your side business provides SEO services and you need a graphic designer to create a new logo, you can offer a graphic designer an SEO package in exchange for that logo.
Need new tech? Try apps. If you need a piece of technology or a program, check to see if there’s a free app for it first. Developers are constantly coming up with new and innovative products, and apps are increasingly being offered for free.
Go digital. If you’re not already utilizing digital everything, get on it! Office supplies cost money, and more and more people of all ages are comfortable working with virtual copies of everything. Even if your side business caters to older generations, don’t be afraid to start going paperless and get in the cloud.
Want less. The best way to boostrap a side business? Don’t get caught up in chasing after things you really don’t need. Just like the fastest way to wealth is wanting less in your personal life, the fastest way to a cash surplus in the work you’re doing in your free time is to cut the wants and focus only on what you need.
Do you bootstrap your side business or gigs? Or do you go all out when it comes to business expenses?
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The hard part of running your own business is not when you are starting but when you are trying to keep it stay afloat despite all challenges, financial or otherwise. I do agree that one should learn how to bootstrap their business. Sometimes what you think is best for your business is not really what is best for it. Careful and consistent planning is still the key.
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The majority of small businesses fail within the first year. I definitely bootstrapped and now my business is a full-time enterprise paying out to other people. It started as a side business and it paid off to be frugal and thoughtful along the way.
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