In the bootstrap a startup program, I outline and explain the most common bootstrapping strategies that bootstrapped startups use to self-fund their ventures but if I were to pick one single strategy based on personal experience, it would be freelancing without any doubts or hesitations. Or as I refer to it in the program: selling services.
To make the process of selling services for the sole purpose of raising startup funds as clear as possible, follow these 4 actionable steps consecutively then follow up with me with your own input in each one of the phases below. I’ll make sure you’re in the right direction.
1. Pick a Service
In this phase, start with the best-case scenario: selling a service that is aligned with your startup product.
In other words, if your startup vision is around introducing a scalable way to writing better content on the web, you’d be better off selling writing services. This way, not only will you get a chance to learn more about your target needs, but also, sell them on your startup product when you have the resources to pursue your venture.
There is really only one more scenario: what are you passionate about and can serve clients with? in other words, what’s your background?
Even if you’re in high school or still building an expertise in college, there must be one or two things that you do well. Here are a few examples: web/mobile and/or logo design, content writing, social media management, programming, photography, consulting, PR, video editing, copywriting, etc.
Keep in mind that if freelancing isn’t what you plan to do for a while, think about it as one of the startup phases that you must pass to build your venture. It’s also an interesting story to tell your future investors, customers and team members. It’s one of the most effective ways that will help you stay away from debt especially at the beginning of the journey when you still don’t have a compelling value proposition and proof for investors to fund you.
2. Set Your Goals
How much do you need to generate for you to have enough startup funding to get going? set a realistic goal and the number of projects that will enable you to reach this goal.
For example, when I started, my goal was $20,000 and I projected that I needed 4 clients to achieve this goal. I sold consulting and web development services and indeed, 3 months later, I reached this goal. I intentionally underpriced my services to reach my goal faster so I could focus on my startup ventures sooner and overcome the fact that I didn’t have much proof to show potential clients back then.
It takes a maximum of one hour to research current rates and demand for your service to help you make an informed estimation. For instance, if you sell bookkeeping services, go to one of the freelancing sites like Upwork and type in bookkeeping in the search area to compare rates based on the experience of existing freelancers. Then create an account and look at bookkeeping jobs to learn about client budgets. Do the same thing with one or two other platforms and with this, you should have a clear idea about your expected income.
3. Apply Consistently
First, start with your network and surrounding. Contact everyone you know, on LinkedIn and your other social media accounts to tell them about your service. A few of those people can potentially use your expertise. The worst case, they’ll be able to refer you to others.
Second, although you can create awareness about yourself and what you can do for others by actively sharing content like this post, this strategy tends to be very effective over the long term and if the main reason behind freelancing is to generate revenue that you can invest in your startup, you’re looking for faster customer acquisition mediums.
Freelancing is where you should spend most of your time. Upwork, Freelancer, Peopleperhour, College Recruiter and ServiceEscape are a few places you can go to find freelance gigs. Create an account in every site where you find a fit and start applying. Discipline in applying is extremely important. When I started, I had a hypothesis in mind. I said, I project that for every 100 personalized application I make, I will get a gig that’s worth $5,000 or more. I don’t think I ever needed to apply 100 times to get a job but at least, I had a quantifiable reference in mind. Use 100 as a reference and get to work.
Here is a list of 15 freelancing sites.
4. Don’t Wait Until Your Reach Your Goals. Invest As You Sell
Here’s the deal, unlike common beliefs, you don’t need a lot of money to start a small business or startup. I have mentioned this many times before, but as a reminder, research findings by CB Insights show that the cost of launching a startup went from $5 million in the year 2000 to less than $5,000 today. While growing a business may require a lot of capital, starting one is not necessarily capital intensive.
Ideally, before needing or investing a single dollar into your startup, you want to spend quality time learning about your potential startup product users, their pain points, needs, expectations, current solutions, competitors, potential challenges, etc. These initial steps require an investment in time. The time it will take you to interact and chat with your potential customers, the time it takes to use and evaluate existing solutions, etc. This is way before any monetary investment can go to product development, marketing and other initial and operating expenses.
So, as you are working towards selling your first customers, spend an hour or two a day into the non-financial investment part of your startup venture. This way, by the time you earn the first portion of your financial goal from freelancing, you know where the money should go to make a tangible progress on your startup venture. It’s very important that you don’t wait until you reach your target goal for you to start progressing with your startup either to build the initial version of the product, create several testing scenarios that help you better understand your customer needs or any action that requires money.
Freelancing is one of the best startup bootstrapping strategies because it can literally serve as your angel or even seed investment. In other words, instead of spending 3-6 months seeking an investment for an unproven idea, you could spend the same time to self-fund the initial steps of your startup by selling services to a couple of clients and at the same time, keep your startup equity for yourself until you increase your venture’s value simply by building a few versions of the product, selling to a few customers or closing some key partnership deals. The money you will generate from freelancing will help you do just that.