What you need to know about bootstrapping your business in 2024

Small Business Canada

By Fatima Zaidi, CEO and Founder of Quill & CoHost

Advice and considerations for business owners on how to approach bootstrapping vs. outside capital

Bootstrapping a business means scaling your company with little to no venture capital or outside investment. It means relying on your own personal savings, alongside any revenue the company is able to generate, to operate and scale the business over time.

It’s no secret that starting a business, or deciding to scale your business, in 2024 is difficult due to the current economic environment. At Quill, we learned so much about bootstrapping during an economic downtown. While no one looks forward to a recession, the silver lining is that it often forces business owners to be laser focused on immediate traction and being cash flow positive from day one. In retrospect, we were aided by a number of different factors while building Quill and CoHost during a downturn. The biggest being our resilience and commitment to turning a profit as quickly as we could, and ultimately focusing on all tactics that contributed to the bottom line.

As you’re looking at how to grow your business this year, it’s important to start with understanding your business model, how you will achieve profitability, and where you want to spend your time as a business owner. Another misconception about the term “bootstrapping” is that it means you’ll never take investment. Just because you choose to bootstrap your business now, it doesn’t mean you will never seek outside financial support or investment.

Typically, the inflection point of needing additional capital as a bootstrapped business revolves around wanting to accelerate growth and fight off competitive threats. If you’re thinking about bootstrapping your business before considering taking outside financing, here are the top four tips to consider:

Clearly Define Your Path To Profitability: While profitability is core to most small businesses, there are technology startups or ideas that take time to develop the path to profitability. If you’re looking to bootstrap your business, baking profitability into your business model from the start is essential.

Get To Know Your Customers: As a business owner, focusing your time on learning and understanding your customers is extremely important. Ensuring you understand why your customers are buying your product or service is key in helping you understand where your product market fit lies. Responding to customer feedback and pivoting when you need to will help you avoid falling into the trap of continuing on a path where there isn’t proper product market fit. If you’re spending a lot of time with your customers, you’ll be able to shift, adapt and stay nimble.

Spend Time Learning About Government Grants: There are so many incredible government grants and resources for Canadian small businesses, especially if you have a technology element to your business. It’s important to research and identify what government funding and grants your business will qualify for.

Find Product Market Fit: Going hand-in-hand with listening to your customers, it’s important to identify and cement your product market fit before you seek out additional investment support to scale your business. Finding and understanding where your product fits in the market will support you building a business plan and case study for when you might need additional capital to take your small business to the next level.

With the current fundraising landscape, attracting outside capital has been more difficult alongside the economic downturn which is a unique opportunity for business owners to look more critically at their business. Some of the strongest, most successful businesses have been started during recessions and economic downturns including Netflix, AirBNB, Microsoft and more. It’s an opportunity to intentionally evaluate every aspect of your business to establish a profitable business model and plan that can withstand the tough times.

Instead of focusing on how you can raise the most amount of capital as early as possible, be sure to consider all of the other avenues you have available to you to bootstrap your business in the early stages. Doing the groundwork now, will prepare you and your business for the future where you will be positioned to be more strategic with your fundraising decisions.

Fatima Zaidi is the CEO and Founder of Quill & CoHost. Quill is an award-winning content marketing agency, specializing in branded podcast content for leading global brands including Interac, PWC, Microsoft and Expedia. CoHost, a podcast growth and analytics tool used by customers like SickKids, Heart & Stroke, and PwC.

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