It is quite complicated to run a startup without investments from external sources. However, to sustainably run a business, there are various other ways to attract money that we are enlisting in this blog.
The ecosystem of startups in countries like India, the USA, UAE, South Korea, The UK, etc are seeing a huge boost. According to a Population Involved in Business Startups report by Statista, in 2021, Chile lead the Americas with 29.9% of the population involved in business startups. The number of startups coming into existence every day has also impacted the competitiveness that existed in securing investors to start or grow already existing companies. Thus, startup owners go through questions like how to get investors, how to grow the startup with external funding and more. So, it might be a little scary to imagine survival without securing investments in the future. However, the truth is a little different as it is possible to manage and grow a startup without investment.
In this blog, we are discussing a few business startup tips shared by experts from several industries that can help you in understanding what survival strategies for startup businesses can you come up with so your business does not die without investments. Stay with us until the end of this blog on managing a startup without investors to get some cool insights.
Before we proceed further and discuss a few tips for growing a startup without investors, let’s have a look at some start-up investment statistics. These statistics can help us in understanding why it is crucial to prepare a foolproof roadmap that can help you keep your business growing even without start-up investments.
With the help of the above-mentioned statistics, you can imagine how survival strategies for startup businesses influence not only growth but also the survival of the company. Thus, it is crucial to come up with business startup tips that are practical and based on the real-world experiences of founders with successful startups. Without further ado, let us take you through these practical tips to manage a startup without outside investors.
"When in doubt, bootstrap. Using your own personal resources is the easiest way to start a business. You don’t have to convince investors about the merits of your idea. You just have to convince yourself."
- Ryan Holmes, Co-founder of Hootsuite
|Advantages and Disadvantages of Bootstrapped companies|
|100% control over decision-making||High risk of failure|
|Requirements of less capital||Lack of backups|
|More focused approach||Lack of investors’ interests|
|Low registration costs||More stress|
|No profit sharing||More equity issues|
Bootstrapping is one of the leading start-up business funding methods founders are using across the globe. Plenty of founders across the globe bootstrap companies for various reasons such as 100% ownership, flexibility in the decision-making process, no external interferences, and more. Common industries which are witnessing a rise in bootstrapped companies are app development companies for startups, retail businesses, food companies, and more.
"Only the paranoid survive"
- Andy Grove, former CEO of Intel
One of the common ways companies arrange money if there is nobody to invest in business startups is by attracting money through prebookings or pre-orders. For example, if you are offering a subscription service, you can market it with the option of pre-booking for subscriptions. This method to expand your business funding is supported and promoted through discounts and exclusive benefits for subscribers.
"If you are not getting traction on your idea, you try few things. You try pushing harder, cleaning up something, building up to something aggressively - but if it doesn’t get traction, then don’t bother."
- Vijay Sharma, Founder of Paytm
The expanding digitalization has made it easier to market businesses through various channels such as websites, social media, email marketing, newsletters, and more. Some of the leading ways to market without funding for start-up businesses are -
Guest Posts (GPs) - One of the most common practices to attract virtual traffic is Guest Posting. In this process, you can approach website owners with massive user traffic to ask them either to link your website pages or to publish your content with interlinking or CTAs that can lead their readers to your page. Some website owners offer these services to have a regular supply of high-quality content for their websites without having to hire their own staff or write their own content.
Social media promotions - There are several free ways to promote your business without any start-up business funding. Top social media platforms like Facebook, Instagram, Twitter, TikTok, etc offer platforms where one can generate and promote content without having to go for paid promotions. Social media platforms like TikTok and Instagram have promoted the idea of video-based content. Users can grow their presence through reels, pictures, music, and more. Additionally, social media platforms support hashtags, locations, tags, etc to allow social media users to optimize their virtual presence and increase their visibility. However, the effectiveness of social media strategies depends on how good your social media strategy is.
Invest in marketing strategies - One of the major factors that affect the growth of a company is its marketing strategy. An effective marketing strategy can leave a long-lasting brand impression on the mind of the audience. Thus, it is crucial to hire or partner with only the best people in the marketing industry who can help you in expanding your startup's visibility across target markets and beyond.
Referral marketing strategies - Another one of the top ways investors for startup businesses do marketing activities is by offering referrals. Referrals are done either by past clients of startups or you attract new users and returning users by offering discounts and special offers.
“Your ability to attract, evaluate, and forge strong working relationships with co-founders, early employees, and investors often mean the difference between failure and success."
- Clara Shih, Co-founder of Hearsay Systems
Equities exist even in bootstrapped companies and can be used to attract employees and build long-term relationships with them. These loyalties also give employees an assurance that they might earn good returns in the future when the startup is thriving and making revenues. These equities can also be used to hire startup founders as leaders in your company.
“Don’t get distracted. Never tell yourself that you need to be the biggest brand in the whole world. Start by working on what you need at the present moment and then what you need to do tomorrow. So, set yourself manageable targets."
- Jas Bagniewski, Co-Founder of Eve Sleep
While running a startup, it is important to plan the efficiency of the company properly. It is crucial to ensure that people who are working in the organization give their best efficiency to ensure better efficiency can be achieved through less number of employees. However, to build loyalties and reduce the churn rate, it is also crucial to maintain the employee satisfaction level and build an employee-friendly culture.
"As a founder, lay all the possible scenarios - from best to worst - in front of you, so you don’t get surprised when something happens."
- Brian Wong, Co-founder of Kiip
Until your startup is efficient enough to survive without external funding for start-up businesses, do not quit the day job as your backup. As there are no investors involved, you can manage the job as a backup to ensure you have a plan if you need a financial backup.
"Selling is not a pushy, winner-takes-all, macho act. It is an empathy-led, process-driven, and knowledge-intensive discipline. Because, in the end, people buy from people."
- Subroto Bagchi, Co-founder of Mindtree
The key to growing a startup without investors is to bring the best salespeople into the company. Salespeople of the organization can bring more money to help the business grow. Additionally, expert salespeople can also help the company in building and maintaining good long-term relations with customers to ensure returning partnerships in the future.
Even without having anyone to invest in business startups, it is possible to run them for quite some time as there are several ways present to bring money. Furthermore, let’s have a look at a few top ways that can help you in arranging the start-up business funding even without investors.
It is ideal to plan the required funds in a little advance before you launch it in reality. The planning period that you invest in preparing a startup growth strategy can also be used in making money so you have enough savings that can help your startup in running for a while. Savings are also the best way to fund your startup as you do not have to pay any interest amount or equity on them. Additionally, the loss or profit also remains as your personal property without the fear of having to answer or repay someone.
Banks look for individuals or groups looking for start-up business funding on loans as these types of loans attract a good amount of revenue for banks in the form of interest amounts and other costs. Plenty of banks in countries like India, the USA, and more offer bank loans to grow the startup culture under various schemes by their governments.
Non-banking financial companies (NBFC) or Micro Finance Institutions (MFIs) are the companies apart from banks that offer financial loans to support businesses. The process to avail of business loans from such institutions can also be less complicated. For a startup without investment, these institutions are the best way to collect funds. However, the rate of interest can be more than banks sometimes but that also depends on the organization you are availing the finance from.
US market has plenty of leading credit card companies that offer business credit cards to help grow a startup without investors. These credit cards are useful to make purchases on behalf of a company and can be used to avail urgent capital as well. Some key players offering enterprise credit cards to a startup without investors are Capital One Bank, American Express, Bank of America, and more.
One of the most popular ways among business investors for startups, peer-to-peer lending is a method of borrowing from another individual. There are websites offering such services as well. These websites connect the borrower and the lender directly and tie both parties together under certain conditions. The investor deposits the money as a lender into the broker website’s account and the borrower can avail of the loan from there.
Well, these were some of the prominent ways to ensure the survival of a startup even without any external funding. Hopefully, this survival guide for startups has helped you in having enough insights that can help you in preparing your startup roadmap better. Now, before we wind up this start-up investment guide, there are a few points we discussed above that we want to highlight for your revision. Let’s have a look at the highlights of this blog on ways to find alternatives for investors for startup businesses.
With these highlights of this report on how do startups grow without venture capital, it is time to wind up the blog. We will return with more such informative writeups soon.
Meanwhile, if you are a developer and got an app idea, you can read about ways to make money through a free mobile app. The blog can help you in monetizing your app without having to charge a single penny to your users.
She is an avid writer of technology and trending mobile apps. When she is not busy updating you about the tech world, she spends time reading books and playing guitar.
Cut to the
chase content that’s credible, insightful & actionable.
Get the latest mashup of the App Industry Exclusively Inboxed