Bootstrapping a Company

Ryan Allis:

First of all, if you are on a tight budget, be ever mindful that the last thing you need is overhead. Don’t put the cart before the horse. Find a product. There are products out there. Look through the classifieds. There are people out there who have wonderful products but do not know how to market them. Contact these individuals and make them an offer. Give them a small piece of the action and buy the product out from them or license it. If you do not have money, find investors. Just make sure you retain control of the company. There are books available that can show you how to draft sample agreements like this.

The small entrepreneur simply needs to learn that much can happen in their own garage. You can take a product, spend a minimal amount of money to get a label on it and packaging and take it out door to door to small shops. Go to these shops and tell them you’d like to put the product in on consignment basis. Here you may run into trouble with stores asking for credit, but do what you can and extend credit if you are able to get some initial cash flow.

Then take your product and sell it to your friends. If your product is as good as you say it is those same friends are going to be telling their friends. You can build off a simple little platform like this.

Then build your web site, get an affiliate program going, and go from there. The key is finding a superior product that can be manufactured at a very low cost. The typical successful television product needs a seven times markup, 700%. Educate yourself about markups and costs.

Packaging is essential. Spend more on your packaging and written materials. If you cannot write, go find a copywriter that can. Get out and talk to people and get feedback on your product as often as you can.

If you have a superior product, you’ll win the battle. If you do not, odds are you are going to lose.

Learn to do what you can yourself. Don’t walk into a lawyer’s office and spend $2500 needlessly. Find an incorporation mill that can do it for $250. Learn how to write copy, that’s really essential.

If you make a mistake, be sure to learn from that mistake. If you fail, be sure you learn from the failure. I’ve not known a successful entrepreneur that didn’t have four or five failures. I might be a notable exception. I’ve only failed two or three times [laugh].

Just keep punching. It’s tenacity that wins.

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