Bootstrapping: the art of creating a company with a small budget
Bootstrapping is a term used in the Anglo-Saxon market that refers to the idea of starting an entrepreneurial project with few resources.
The etymological origin of the term bootstrapping can be found in the popular expression pulling oneself up by one’s own bootstraps, which can be translated as “getting up by your own means”.Creating a company with a small budget requires ingenuity and, most importantly, planning. Often, SMEs are poorly managed due to the increased cost of regular business operations. On the other hand, the tightening of global economic policies makes undertaking an almost impossible task. Only those with the right plan will be able to navigate these turbulent tides.
At the beginning of their journey, companies do not have access to large amounts of resources, neither economic nor financial. Therefore, they are forced to rely on mutual funds and savings. This factor keeps its reach limited in the initial stages and the company’s finances are stuck in eternal marketing or production campaigns.
For SMEs, the art of bootstrapping is what you really need to focus on during the early stages. It is a phase in which intelligent decisions must be made without losing sight of the future, but at the same time based on the current market situation. It is advisable to work with renowned consulting firms to help them make the right decisions.
Tips for starting a company with a small budget
Intelligent resource planning and management
Carrying out a comprehensive market study is essential when starting a business with a low budget. This evaluation can be performed using low-cost market evaluation tools, such as online surveys, social media surveys, and more. Once the market study is completed, a detailed business plan can be outlined, knowing the limitations of the budget. This will allow us to plan all expenses from the start.
Buy only what you really need
Once the initial objectives have been achieved, expanding resources will not be a difficult task, since the improvement of financial conditions will give room to constantly expand everything. Therefore, maintaining a simple but effective workplace at the beginning should be the top priority.
Offering discounts and gifts
When entering the market as an emerging company, we will have to face strong competition between established companies in the industry. A good strategy is to offer exclusive discounts to attract the attention of potential customers. In addition to discounts, you can also start temporary campaigns that offer samples of certain products.
Use social media marketing
Social media marketing is a very effective channel that allows you to reach the masses without spending a lot of money. Many companies have been established thanks to the power of social networks. This is undoubtedly a cost-effective method that allows SMEs to promote and sell products without physically reaching customers.
Success stories in Spain
Glovo: Founded by Oscar Pierre and Sacha Michaud in 2015, Glovo launched with a minimum viable platform and focused on building a network of autonomous delivery people instead of investing in its own fleet, which significantly reduced its initial costs. Over time, the company grew tremendously, expanding internationally. Glovo currently operates in more than 20 countries.
Typeform: Founded in 2012 by David Okuniev and Robert Muñoz, Typeform began with a focus on transforming the way online surveys and forms were conducted. Their goal was to create attractive, interactive and easy-to-use forms. They opted for the development of a simple and effective product, with an intuitive user interface that attracted many customers without the need for a large investment in advertising. Today, Typeform has managed to attract large customers such as Apple, Uber and Airbnb, and today it is a leading tool in its category.
Wallapop: Wallapop is a platform for buying and selling second-hand products founded in 2013 by Agustín Gómez, Gerard Olivé and Miguel Vicente. The idea emerged as an accessible solution so that users could sell locally used products without shipping costs or high commissions. Initially, Wallapop focused on a business model that connected buyers and sellers without the need for their own inventories or warehouses. Currently, Wallapop is one of the most popular second-hand apps in Spain and has attracted international investment to expand to other markets.
