Bootstrapping Your Side Hustle: 6 Ways to Save Costs

Starting your own business is a heady proposition. There are so many decisions to make, research to be done and expenses that are incurred. If your business is a side hustle, you’re likely balancing the costs of launching your new gig with your full-time work. This balancing act can be challenging. However, with a little effort and self-determination, you can do it all.

The costs of starting a business can be considerable. To reduce the costs of starting your own business, you may consider various bootstrapping ways to save money and still build a great foundation for your new company.

What Is Bootstrapping?

Bootstrapping is about using your own labor, work ethic, ingenuity and drive to reduce costs. A bootstrapping approach means doing the work yourself, rather than hiring a third party to complete the work for you.

The term bootstrapping comes from the concept of someone “pulling themselves up from their bootstraps.” It references the high-top boots that were common in the 19th century and put on by tugging at the straps attached to the boot’s ankles.

Bootstrapping has several benefits.

The most obvious is that it saves considerable sums of money, which can be scarce in the early days of business organization. These funds can be used to buy equipment or inventory, pay yourself or your employees or invest in infrastructure or other operating expenses.

Bootstrapping allows you to focus your resources on your core products or services. It also instills financial discipline, with a frugal focus on saving resources and using a do-it-yourself mindset to solve problems.

If you are thinking about a bootstrapping approach to your new business, here are some tips for how to approach the work:

• Reduce Expenses. Bootstrapping is a good way to lower your startup and ongoing operating expenses. Lowering your expenses means every dollar saved goes to core needs and lowers the amount you need from financing or investors

• Be Resourceful. With a bootstrapping approach, you will need to bring your best self to bear. You can use bootstrapping to tackle things you already know and things that are new to you. Using available online resources can help your problem-solve and achieve your goals

• Build Lean. Bootstrapping means frugality. You can still take a lean approach to the other aspects of your business by having a smaller team of staff or freelancers working on your business. Think about job descriptions and needs that will lower your headcount and costs

• Get Creative. Sometimes, the tried and true approach to business operations is not necessarily the right one for your company. Out-of-the-box thinking can drive ingenious solutions that change how you approach problems and develop solutions

A Bootstrapping Approach

There is no standard rulebook when it comes to bootstrapping. Begin by looking at your core needs for creating your business. Break these needs into tasks and deliverables.

Next, think carefully about what work you can reasonably complete on your own. Identifying these tasks and learning what pieces of them you can complete yourself will help you determine where to spend your time,

It’s important to prioritize your bootstrapping tasks to figure out which ones to tackle first. If there are tasks that are dependent on other tasks, be sure to complete them in the proper order.

Here is a look at 6 key bootstrapping tasks you can do for your side hustle.

1. Business Formation

Creating your business means establishing it as a legal business entity. If it’s a low-key, one-person business, you may want to consider a sole proprietorship, that has no paperwork and passes through business revenue and expenses to your own personal tax returns.

However, if you want strong legal liability protection and flexibility, you should consider forming a partnership or a limited liability company (LLC). This approach is popular with small businesses.

Forming an LLC requires some basic paperwork that needs to be completed and filed with your state of operation.

You may choose to use an LLC formation service, which will complete and file the paperwork necessary to form your business operation. However, taking that step in some states like New York, where those expenses are prohibitive, may not make sense.

Instead, you may decide to reduce your costs and complete and file the paperwork yourself with the appropriate state agency. It is a straightforward process and will save you money.

2. Barter

You may have specific skills or products or services that could be useful to other businesses. You can offer these talents to other businesses or individuals that are of value and ask for them to do the same in return.

You can start by thinking about friends, family members and former business colleagues. Do they have useful talents that could be used to build you a website, design a logo or create a social media strategy?

Think about who you know and how you can be mutually beneficial to each other. And do not be discouraged if you get some rejections. It cannot hurt to ask and begin a conversation. It may not work now but will be an opportunity for bartering or collaborating down the road.

3. Financial Flexibility

There are many things you can do to be bootstrapped with your financial situation. Here are a few ways to stretch those dollars and get creative:

• Clever Pricing. Think about ways to use your pricing strategy to draw more customers, volume orders and attract new business. You could offer discounts, volume pricing deals, pay-ahead offers or coupons to bring in revenue and save

• Free Trials. Let customers check out your services or products for a brief time while retaining the ability to return or cease using. Free demos of your products are another way to spark interest and show off features to entice customers

• Subscriptions. Think about a subscription model that will help you with reducing inventory and management costs. With a subscription plan, you send customers a product every few weeks or months. It’s a way to build predictable income streams, develop loyalty and offer customers value without having to sell and resell constantly

4. Open Source Software

Businesses today are reliant on software to send an email, write a letter and create a spreadsheet. While there are many commercial products available to help you run your business, you do not need to rely on these exclusively to operate well.

Open source software programs are developed often by individuals seeking to build a better version of popular software applications. The community works together to build, adapt and improve these applications.

Many open source software tools are free or very inexpensive to purchase. There are open source options available for word processing, accounting functions, project management and more. There may also be industry-specific open source options for your business needs.

5. Supplier Approaches

Does your side hustle depend on suppliers for your products or services? This can be a challenge for some businesses, which do not have the positive cash flow to purchase the initial or subsequent lots of materials needed to run the company.

There are ways to get creative with your suppliers. Start by establishing a relationship and having a frank conversation.

Ask if they have credit terms that would allow you to defer payments for 30, 60 or 90 days. Many suppliers, like you, are eager for new business and will work with you to attract and retain you as a customer.

6. Work Space

It may not be necessary to rent an office for you and your employees. As work modes have shifted, many businesses are now fully remote. If you have a spare room or space in a bedroom, cellar or living room, you may just have found your office space.

In addition, this shift in how we work means that the corporate real estate market is very soft, with lots of available space at reasonable rates. You may even find a company looking to lease out some space at a low rate due to their reduced in-person footprint.

There are also services that will provide you with virtual receptionist or assistant staff, a mailing address and access to conference space on an ad hoc basis.

If you do use your home as your workspace, there are also several tax write-offs you can leverage, further reducing your tax burden.

A side hustle is a great way to explore a new business approach and use your skills to grow your income. A bootstrapping approach to your side hustle can save you money and accelerate your success.