Reduce your
start-up costs
step 6
You don’t need loads of money to start in business. In this
step:
1 We reduce your start-up costs.
2 We look for cheap premises.
3
We also take a look at whether e-commerce is a route for you.
Start on the cheap: bootstrapping
brilliant definition
Bootstrapping
Bootstrapping is starting your business with no money.
‘The more up-front money a business requires, the
less chance it has of getting off the ground.
Mark McCormack, What they don’t teach you at Harvard
Business School
70 brilliant start-up
Shows like ‘Dragon’s Den’, while great for raising the excite-
ment around entrepreneurship, spread a terrible myth: ‘To start
up, you need loads of money.’ It’s nonsense.
Bootstrapping is a time-honoured American tradition you’d do
well to copy.
There are many benefits of bootstrapping:
It saves time trudging around to persuade funders.
It allows you more time and space to get it wrong.
You make mistakes on the cheap (trust me, you’ll make
mistakes). You can then change your strategy without
having invested lots of money in the wrong equipment.
It’s a great discipline.
Here’s how you do it.
Great bootstrapping techniques
Don’t buy anything
It might sound facile, but it’s valid. With everything you think
you have to buy, think first whether you could rent, lease
or borrow it more cheaply. Don’t fall into the trap of think-
ing, Well, it’s cheaper for me in the long run to buy it.The
most valuable thing for you now is flexibility. By leasing your
brilliant global examples
Microsoft started off in a garage.
Google was founded with credit cards.
Shell Oil started from a small corner shop.
Reduce your start-up costs 71
major purchases, you can update to better equipment quickly
and cheaply when the money rolls in, or change quickly if your
market is not where you thought it was.
Resist the temptation of what the SAS call Shiny Kit
Syndrome’. You get so seduced by a piece of beautiful machin-
ery (Satan, take that iPad away from
me) that your life will not be com-
plete unless you can clutch it in your
hot, sweaty, little hands.
Your rule of thumb is not ‘Does it gives me the warm fuzzies?’
but ‘Is it absolutely essential I own it?’
Shop around
Everything is negotiable. Always ask for a discount when you
buy things, for paying in cash or paying early. The worst they
can say is no. See Step 11 for more information on negotiating
with suppliers.
Get a deposit
This has to be one of the easiest forms of finance, and yet one
people consistently overlook.
Get your clients to pay a deposit for the service, or to pay early.
is it absolutely essential
I own it?
brilliant example
I was asked for advice by a woman starting a business that involved getting
people over their fear of flying. Her proposed solution was to build a life-
sized flight simulator. Holy moly – that’s about £1 million! Surely there’s a
more creative way to start this without the investment?

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