One question we’re repeatedly asked by new founders at C&C is: Do I bootstrap or raise? Well, in our new series, From Pennies to Profit we set out to answer that question by asking self-funded founders how they bootstrapped their biz, from how long they worked full-time while building it to how much they saved before they leaped, and everything in between. Ready, set, launch!
Of course, however, you decide to fund your business is entirely up to you, and is really dependent on the type of brand you’re launching and what your business goals are. But if there’s one thing we like to do at Create & Cultivate, it’s to provide you with all the information you need to make an educated decision, whatever the end result may be.
When you take a quick look at the statistics, though, it’s easy to see why more women are strapping on their boots. Out of the $85 Billion in VC funding from 2017, only 2.2% went to female founders, under 1% went to Women of Color, and Black women-led startups got even less.
So, we reached out to 26 founders to find out how they bootstrapped their biz, why they chose to self-fund over raise (many told us they didn’t have a choice!), and their best financial advice for new entrepreneurs looking to launch a brand.
Camille Fields, Founder, Camille Fields-Restorative Skin Therapy
On bootstrapping over raising…
I always knew that my ultimate goal was to have my own skincare practice. After working in a day spa for 12 years, I felt it was time to venture out on my own.
On the bootstrapping process…
I used my own personal savings and started very small(and by small—I did not have one single client when I began but through some very creative marketing strategies, I gradually and slowly built a clientele. It didn't happen overnight and it was extremely frustrating at times, but I knew if I stayed the course and maintained the passion I have for my career, I would eventually see my dream come to fruition.
Fortunately in my profession, you can begin with a smaller budget and increase it as you go. I liked the idea of starting a business using my own finances, but depending on your line of work and the scope of your vision, that may not always be feasible.
On where founders should focus their financial energy…
For me and I assume for all business owners, it's getting to know who your ideal client/customer is and what their needs are. Once you can identify who and what that is, you can use a laser-like focus on the best areas to expend your financial energy. Otherwise, you may find yourself spending money in areas that are not fully utilized.
On the biggest money lesson…
Research, research, research, and more research on where you want to spend your hard earn dollars. Really invest in areas that speak both to your level of integrity and where you will see an ROI, even if the upfront costs are more.
On her #1 piece of financial advice…
Start small, build slow, and never lose sight of your long-term goals. The sky really is the limit!
Dana Jackson, Founder, Beneath Your Mask
On bootstrapping over raising…
I didn’t want to give up a piece of my company so early on. I also didn’t want to take money without the guidance. Whenever I do get funding, I’m not looking for just cash. I want the expertise as well.
On the bootstrapping process…
Prior to launching Beneath Your Mask, I worked as an entertainment business manager. The last two years of my career in business management, I was feeling burned out and unfulfilled. I started saving every dollar I made because I no longer wanted to dedicate 20 hours/day to someone else’s dreams. One of the main challenges I faced was not realizing how much money I’d actually need, and I ran through my cash reserve pretty fast and had to use a lot of my personal and business credit.
While you can scale much faster with funding, the benefit of bootstrapping is you’re forced to learn every aspect of your business because you can’t afford to hire someone to do every little thing at first. When you do go to hire someone, you know exactly what they should be doing because you’ve already had to do it yourself.
On where founders should focus their financial energy…
Driving top-line revenue through marketing. That’s important because it allows you to hire strategically and build the proper team. The proper team frees you up to continue to grow your business, brand and community. Increased revenue and cash flow also allow you to increase your purchasing power and reduce cost of goods by purchasing in larger volumes.
On the biggest money lesson…
The importance of margins as a CPG (consumer packaged goods) brand, especially a beauty brand that’s in retail. It’s really important to factor in all your costs into your price point and allow room for wholesale margins, sampling, store support, gratis, press and influencer kits, and shipping. Those costs really add up, and if not priced properly, you can easily lose money in retail. Also, negotiate as much as you can with your suppliers. It never hurts to ask!
On her #1 piece of financial advice…
As a small business, I rarely invest in any services or consultants that I don’t see an immediate ROI on. Don’t run out hiring every person that reaches out to you with promises of what they can do for your business. No one is going to come in and be a miracle worker for your brand, it takes time to grow and gain traction. So if you can’t afford to hire someone for six months without a return on that investment, you can’t afford them.
Lesley Thornton, Founder, KLUR
On bootstrapping over raising…
I didn’t have a choice. It's very well known that minorities don’t have access to loans and capital.
On the bootstrapping process…
Dollar by dollar I saved enough money to cover my initial cost. When I realized it would require more funds to employ a full-time chemist, I listed my apartment on Airbnb and was able to generate a second stream of income which I then invested in my company.
On the challenges she faced…
When I launched KLUR the message of economic and sustainable inclusion fell on deaf ears. I couldn't get traction. Not a single response to the product nor the important conversation.
On whether she’d recommend bootstrapping to other entrepreneurs…
I can’t say that what I’ve done can be replicated. Entrepreneurship is an individual journey, every person will have to decide what they are willing to risk. This is a part of the process.
On where founders should focus their financial energy…
Focusing your time, money, and energy into the best product possible—quality is essential.
On the biggest money lesson…
Don’t spend what you don’t have. It’s really that simple.
On her #1 piece of financial advice…
I’ve seen many entrepreneurs struggle, or fail because the operating cost exceeds the potential profits. Watching your numbers is key!
Sevetri M Wilson, CEO and Founder,
Resilia and Solid Ground Innovations (SGI)
On bootstrapping over raising…
I don't think there was this moment where I made a decision to bootstrap my company. It was more so the cards I had been dealt with. At the time, I knew I would have to build my company brick by brick as there were no financial resources available to me then. I knew I would have to be scrappy and win business in order to grow, so I did just that. Now that I have a bootstrapped company under my belt which was very successful (and have raised venture for a second company) there is one thing I can say that I know is true—bootstrapping gives you the freedom and flexibility in a way that raising capital or outside financing doesn't.
On the bootstrapping process…
SGI is a true bootstrapped company. I built it by overseeing services that I could accomplish as a sole owner. Once I had built enough clients I started hiring one team member at a time at first. My first hire was more of a generalist, but was sound when it came to logistics because let's be honest when you are bootstrapping your first hire should be someone that gets stuff done! The way we went about securing contracts is actually sub-contracting under larger companies. If there is one word of advice I can give it's you have to learn fast, and what better way to learn your field is by working (still as a business owner) with someone who has done what you are seeking to do at scale.
\I faced a number of challenges whether it was selling contracts as a woman, or a Black woman, or as a young person which to some can come off as inexperience, or as a person from the south, there was no shortage of challenges. I would recommend bootstrapping. As someone who has again bootstrapped their first company and now raised over $10M for a second company, I can't stress enough that you calculate what you want to give up. It may have taken me longer with bootstrapping but it also allowed me to invest the first $1M into my second company which has allowed me to own a significant share of the tech company I am building versus having been put in a position where I raising money under not so desirable conditions.
On where founders should focus their financial energy…
One mentor would always tell me one of the main reasons why businesses fail is that they grow too fast. So, I think focusing your financial energy on how do you grow as lean as possible is very important.
On the biggest money lesson…
One of the biggest money lessons I've learned since launching my business is that mistakes are costly, so surround yourself with advisors, and also it’s hard and very costly to manage people. So, spend the time recruiting and find the best to join you in your endeavor. I've spent quite a bit of time creating and cultivating an amazing team. It's worth it.
On her #1 piece of financial advice…
You're probably going to lose some money along the way, you have to not dwell on it long, and work to devise a plan to recoup it. But also know being in this seat means you are going to have to take risks and likely very often. Some of them will go well and others not so much. Breathe and get back out there.
Athena Hewett, Founder, Monastery
On bootstrapping over raising…
In all honesty I never really made any conscious decision about it, I just did what I had to do. I had the other side of the business (the spa) that was doing well and I was selling the product on a small level out of the spa. It just made sense to create a larger audience for the products by packaging the products and building a website. I was borrowing money from the spa to build up the product line.
On the bootstrapping process…
I was able to put both businesses under one umbrella and take a sizable loan for the spa. We had already been in business for over five years at that point and the business had a reasonable income, which helped a lot with the business loan. I used that loan solely for the product line. Sure it worked out for us, but we couldn't have done it without the other business. Maybe it wouldn't be for someone who is risk-averse. It's risky to put you and your family in massive debt for something other than a home but I never believed that it wouldn't work out.
On where founders should focus their financial energy…
At this point in the game, this would be a tough question for me to answer. There are just so many things that cost lots of money and they are all important. I made a lot of mistakes along the way but one thing that wasn't a mistake was hiring a business strategist. She was expensive but she laid out the business for me in a way that I would have never done. She came from the start-up world so she thought differently than I did. She organized everything for me. I wrote the original business plan but she expanded on it. She had much bigger plans and goals for Monastery than I originally had. It helped me a lot to see the business through her eyes and I realized that I would need a lot more money than I thought. We worked hard to pay off the first loan and then we got another loan, triple the size of the first.
On the biggest money lesson…
Don't ever try to skimp on things to save money. It just costs you more in the long run. Go for the quality right upfront.
On her #1 piece of financial advice…
Don't be attached to it. I've always had this attitude of money comes, money goes. I think that's helped a lot in building a business bootstrap style. If I was too attached to it I would never make the risky decisions that it takes to make the business successful. Just like the old saying goes "It takes money to make money." I don't gamble IRL but I guess I am a bit of a gambler when it comes to business
Toneisha Friday, Co-Founder, Blex Technologies
On bootstrapping over raising…
My partner and I were looking for a Black virtual therapist to help increase intimacy (amongst other things) and we weren’t finding what we needed. So, we decided to create a solution to this for people like us.
On the bootstrapping process…
We are self-funding this through our savings which has been built by working full-time. We are now thinking about how we can get our company valued for the potential of raising money because at the end of the day, we don’t want to completely deplete our savings. I would definitely recommend entrepreneurs to keep their full-time job until they are comfortable financially. It helps offset budget barriers and enables you to keep your debt low.
On where founders should focus their financial energy…
Focus on the ROI that comes with each of your expenditures. I think we can get caught up on Instagram and other social media platforms looking at what other businesses are doing and saying, “oh I need that.” But do you really? What is the value? Or if you do it, measure it so you can better understand the impact it had on your business and revenue. Otherwise, you end up spending money on frivolous things that don’t move the needle.
On the biggest money lesson…
Have a planning cycle. Many businesses have yearly planning where they map out their priorities, marketing strategies and overall goals and objectives. Having this planning cycle limits the last-minute scramble and enables you to easily budget your finances for how much certain things like design and development might cost.
On her #1 piece of financial advice…
Don’t forget about taxes, registrations, etc.!! So many people I know who own businesses forget about filing taxes or paying registration fees or submitting the proper sales tax forms, and all of those are critically important to keeping your business running. You can have a beautiful IG feed, but if the IRS hits you with a big bill, are you prepared to pay that and keep the ship afloat?
Arden Montgomery & Margaux Reaume, Sommeliers and Co-Founders, Argaux
On bootstrapping over raising…
We were lucky enough to have support right off the bat from friends and family. Their contributions were structured as loans, which has allowed us to maintain ownership rather than dilute it.
On the bootstrapping process…
We approached friends and family like we would a VC. Margaux and I built the business plan and pitched the concept. I might add that the business today is quite different structurally than it was on paper five years ago. Nonetheless, the business at its core remains unchanged. The most important thing we've learned from our approach to financing the business is the value of financial reporting and "innovative accounting." If I could give anyone starting a business one piece of advice, invest now in your books and the role of controller or CFO within your company.
On where founders should focus their financial energy…
As a business owner, you need information. When you have accurate information, you have the necessary tools to help you make smart decisions, and invest your time and energy strategically. Where is the cash flow coming in from? What revenue stream is generating the best profit margin? Spend your time there.
On the biggest money lesson…
Understanding where to invest the money funding your business and why. We have a capital intensive business model based on inventory alone. We have also chosen to invest in our people. It's so important to take hiring seriously, and understand the value of your team members. I would say take the time to understand WHAT you need to scale, and WHO you need to help grow your business. For us, it's all about the product and people.
On her #1 piece of financial advice…
When we started our business, we were laser-focused on sales and naively figured if we can keep selling and meeting our sales goals it would all work out. While meeting sales goals and selling your product is extremely vital to the success of your business, your business is only as powerful, sustainable, and lean as your accounting and financials are organized, accurate, and tended to.
Lauren Napier, Founder, Lauren Napier Beauty
On bootstrapping over raising…
I had no choice. Black women are under banked and disproportionally represented in the investor space. In fact, less than 1% of Black-owned business receive a traditional business loan in the first year of starting a business. And 2% of the SBA loans allocated to entrepreneurs are awarded to Black-women led business. I launched Lauren Napier Beauty with a tax refund and an American Express card. That’s why I launched a $5M initiative to support Black women-led businesses called Consider Something Better.
Consider Something Better is challenging corporations and conglomerates to honor the fiduciary responsibilities to communities by creating economic and racial equality; giving equal access to funding the next generation of Black female Founders. We are challenging corporate structures to join this mission but we fully embrace the support from all of our feminist allies who desire equality for their Black women entrepreneurial counterparts. Consider Something Better will deploy the funds directly back into this under funded Black women-led businesses, services and creatives in tiers. In the first seven days of launching Considersomethingbetter.com the organization received over 300 applications for grants, this only highlights the need for economic equality and change!
On the bootstrapping process…
I am a celebrity makeup artist so, while I was working on shows like Late Night with Jimmy Fallon, Saturday Night Live, and making movies I was also sitting on set researching materials and manufacturers and sending emails. This was very challenging and in the end very rewarding. I worked long TV/film hours, it was exhausting. I recommend doing the work so you know every aspect of your businesses operational needs. I also know that having monetary support would have made a huge impact on the first three years of Lauren Napier Beauty’s business and operation.
On where founders should focus their financial energy…
Operations and then marketing. If your supply chain is off the entire business is off. Delays create delays and delays create unhappy customers. In the end we are all providing a service or product to our customers and it’s important to deliver.
On the biggest money lesson…
Save it for later! Don’t hit the send button when you are tired. I accidentally doubled an order to my manufacturer and when I realized it, I was unable to cancel the PO. It all worked out because I received a massive order but that is rare and something I would not count on!
On her #1 piece of financial advice…
Reinvest in your business, save your money and know the ABC’s of business—accounting, bookkeeping, and (legal) counsel.
Sajani Amarasiri, Founder, Kola Goodies
On bootstrapping over raising…
Honestly, it just happened. It's what I saw growing up, and I also didn't know too many people in investing circles (which is a common, significant hurdle for immigrant founders, because our "friends and family rounds" and opportunities for introductions and networking in the VC world are incredibly sparse, which needs improvement). I knew for sure I didn't want to just sell an idea to an investor. I wanted to make sure it had a product-market fit, give myself time for product exploration, and then find the right people with an aligned mission. I also am in a stage with enough savings that I had this option to start with.
On the bootstrapping process…
We are 100% self-funded through savings; I have used a lot of my previous tech salary savings to help get me started. Bootstrapping is tough. It's challenging because as an entrepreneur you want to move and grow fast, but when you have limited resources, you need to be super mindful of where you are spending that money. You need to make tough choices like are you going to spend on marketing and PR right now, or are you going to pay yourself, or spend on new product development?
Another challenge in bootstrapping (that a lot of people don't realize) is that it means you literally need to grab your boots and go knock on every door yourself; you aren't going to be invited into rooms, you are breaking in and bringing your chair with you. It's also important to be mentally prepared for pre-launch when you're spending your personal money and there is no revenue coming in. But bootstrapping also gives you many opportunities. It means that at the beginning you are going to play multiple roles and really get to know your business inside and out; it forces you to think creatively and think harder on how you can make each dollar go further, and it allows you to build your company on your core values.
First, understand whether your business is venture fundable; VC route may not be the route for your business, so take advantage of alternative routes like crowdfunding, grants, or loans if applicable. I recommend doing what works for founders and their business. I know raising money, especially as a woman/POC, is hard too, so there is no easy way— just find what works for you. For some industries, such as hardware, it's impossible to bootstrap. But if you don't need much infrastructure investment, and have access to capital, go ahead and take advantage of it.
On where founders should focus their financial energy…
Spend the time and money to find your customer and create the best possible product for them. If you aren't reaching your customers, no matter how awesome your product is, no one is going to know about it. And if you are reaching a massive audience but don't have a unique, awesome product, then they aren't going to come back and buy again.
On the biggest money lesson…
I am still working on this, but learning to be patient—building a business takes time.
On her #1 piece of financial advice…
Focus on profitability and unit economics. Know your numbers in and out—this is the only way you'll know how to price your product and set growth plans. Money mindset matters. If you are an immigrant or didn't come from a privileged background, there's a lot to unlearn as you start your journey as a business owner. We tend to have a scarcity mindset, so we need to come from abundance and believe that yes, we deserve it too. As immigrants, we tend to dream within our means, but we need to dream bigger. If you think you're thinking and dreaming big right now, dream even bigger.
Allison McNamara, Founder, MARA
On bootstrapping over raising…
When I was ideating and creating MARA, it really started out as an (expensive) hobby. I didn’t set out to create a global brand, so I was very careful with my spending especially since the business is self-funded between myself and my dad. I was in a crossroads in my career in entertainment and had the urge to create something I felt was missing. We didn’t skimp out on formulation, ingredients, or testing; however, I was very conservative when it came to web design, marketing, photography, a (lack thereof) team. When I finished the product I knew I had created something really beautiful that would speak for itself.
On the bootstrapping process…
I would definitely recommend it to other founders if they have the means to do it—it gives you total creative control which is so important, especially in the early days of the brand when you’re just figuring out who you are. Most people don’t know this but I actually have two businesses – AMcNamara Inc (which is the one I work for) and MARA. I’ve had AMcNamara Inc since 2014, which handles all of my hosting, brand deals, writing, and content creation. This has allowed me to still have a full-time job employing myself for AMcNamara Inc while creating MARA, so I didn’t and still don’t take a penny personally from MARA, which creates double the work for me but it’s totally worth it.
In order to do this, you have to be incredibly focused and diligent with your time. My background in daily TV and production helped shape me into a very fast and focused worker. The main challenge for me is there literally is never not work to be done—there is always a piece of content I need to shoot, a story I need to write, a product I need to give feedback on, marketing copy that has to be tweaked but that’s what I live for. The biggest challenge is that I work at least six days a week.
On where founders should focus their financial energy…
It really depends on what business you are creating but I think your product—whether it’s beauty or tech or food, whatever—is where all of the financial energy needs to go. Great product rises to the top, even if the packaging is just okay. That being said packaging and marketing messaging should be your next big financial focus, if the product isn’t attractive and doesn’t speak to your customer, the discovery window will be a lot longer than if it was aesthetically pleasing.
On the biggest money lesson…
Everything is more expensive than you think it is. But, great risks = great rewards.
On her #1 piece of financial advice…
Do as much of the legwork yourself as you can. Use your friends and your network to bounce ideas off of, they are your greatest resource and usually, free. When you really sit down to brainstorm, you probably know more people then you think you do that can help you out—maybe your cousin is an aspiring photographer or your sister’s best friend just finished Journalism school, or your father’s friend knows someone who can help you with legal—don’t be scared to ask for help.
Jazmin Alvarez, Founder,
On bootstrapping over raising…
Honestly, it was the only option for me at the time. I didn’t feel comfortable taking out a loan and I had saved up enough money where I felt comfortable making that initial investment into my company.
On the bootstrapping process…
After working freelance off and on for about 10 years in fashion I was saving money for investment. Initially, that investment was going to be a downpayment to buy an apartment but I pivoted and decided to start a business instead. I used money from my savings account and budgeted roughly $10,000 to get started.
I've faced many challenges and still do, but the biggest ones have been limited financial and human capital. It’s the concept of needing money to make money but when you have limited finances, you are limited with what you can spend or who you can get to help you. I think that if you are in a position to be able to cover your personal fixed expenses and have enough money to live off of for 12 months or more, then bootstrapping is a great idea. On one end you have to be very lean in your operations but on the other end, you don't have the added stress of repaying a loan right away or having an investor taking control of your business when it’s still in its infancy.
When startups are just gearing up, the business is still quite malleable which can be a good thing when you have a clear vision but when you don’t and you have outside money/investors having a stake in your company, it can oftentimes derail your vision. I also think that when you bootstrap, it's a great learning opportunity. I never went to business school. No one ever taught me how to be an entrepreneur so I have the freedom to take things at my own pace and learn as I go because I’m the only one making all the decisions right now.
Ultimately how someone decides to fund their business is up to them, but I think that if your goal is to get venture capital, bootstrapping and showing organic growth and traction first will make your company much more valuable to an investor because they are able to see what you were able to build with limited resources.
On where founders should focus their financial energy…
That depends on what type of business you’re building. For me, since my company is e-commerce based, focusing my spending on a well-designed and functional website was my biggest expense/investment. I knew it was going to be the first impression I would be making to the world.
On the biggest money lesson…
To ask more questions! I could have saved myself so much money if only I knew the right questions to ask or what alternative buying options were with regard to product inventory. In the beginning, I was buying all my inventory wholesale. It wasn’t until months later I learned about the options of drop shipping and consignment where I wouldn’t haven't to put any cash upfront in order to sell the products on the website.
On her #1 piece of financial advice…
Be realistic and honest with yourself first about what you are building. Are you building a small business or a lifestyle brand? However, you answer that question can determine what and where you’ll need to invest. Also, be prepared to budget literally everything in your life. Unless you have great financial resources at your disposal, be prepared to adjust your way of living.
Evaluate everything that is coming in and out and get yourself a good financial planner/model to help you understand your cash flow. Cash is king! If numbers aren’t your thing, that’s okay, but find someone who can help you because if you do not have a good grasp on this, it could be at the detriment of what you're building. And when you are able to, pay yourself! Even if it's a salary of $1,000 a year that you set up with QuickBooks. Having the mentality that you are getting paid by your company will change the way you run and view your business.
On bootstrapping over raising…
My co-founder, Dr. Nancy Samolitis, and I first started to work on the business concept about a year before opening. We estimated our startup costs based on the three major areas we knew we'd need to spend the most money: build-out of the physical space, hiring, and inventory. After looking at our budget, we decided it would be best to self-fund as opposed to look for investors who would ultimately take a large amount of equity at that stage of the business. We were fortunate enough to have access to inexpensive debt and personal savings that allowed us to subsidize the rest. We negotiated terms with every vendor possible including our landlord for a longer "tenant improvement" period. All of these small steps allowed us to spend less while getting the company up and profitable!
On the bootstrapping process…
Bootstrapping a business is when an entrepreneur utilizes all or most of their existing resources to start a business or company. After detailing a budget for startup costs both my partner and I were able to look at what capital we had access to and decide whether or not we needed to bring on an outside investor.
We decided to utilize our relationship with the bank, took a small loan from a family member, and self-funded the rest. We looked at every possible area where we might be able to save while getting the business up and running (this includes building out the actual space on our own with the help of my husband, who is a developer/contractor). I will say that when we opened we had run through more cash than I initially wanted to, which definitely put us in a tight spot for the first six months of the business. Ultimately we were able to push through and were profitable nine months after opening.
There have certainly been times where I questioned whether it would have been easier/more beneficial to take on outside investor capital for equity from day one. I do think there is a lot you can do with the right financial partners, which is why we recently did our first raise for our upcoming product launch and brand expansion. Whether or not bootstrapping is right for you is completely case by case and will depend on what resources you have access to.
On where founders should focus their financial energy…
This is case-dependent based on your industry but I can say for our type of industry/business (which I consider to be self-care, services, retail) we don't make money without clients. In my opinion, financial energy should be reserved for marketing efforts and creating an incredible experience with an all-star team so that you can not only attract new clients but retain them.
On the biggest money lesson…
You have to spend money to make money, but that doesn't mean paying for things frivolously. Like every business, we had ebbs and flows with our financials in the early beginnings. We were forced to get creative with when and where we spend our money and focused a lot on "free" marketing—creating an incredible experience so that someone would tell another person about us. Word of mouth to this day has been the most effective form of marketing, and it's free!
On her #1 piece of financial advice…
Pay yourself a salary! I will happily put my business and team first and I went for a long time without a salary. I found that to be a really bad way for me to stay motivated. Being an entrepreneur is really hard and it's important to feel value from the work you're doing. Don't discredit yourself and make sure to build a salary into your initial budget, even if it's small, it will make all the difference in the world.
Taryn Dean, Transcendental Beauty Practitioner, Beauty Witch, and Founder, The Beauty Mage
On bootstrapping over raising…
From the outset with my business, I have always been protective of not giving away my sovereignty in exchange for dollars. Honestly, as a Black woman born and raised in America, I never considered that I had another choice then to bootstrap. I knew i wasn’t going to walk into a bank and get a loan and I didn’t have any relatives or friends to ask for startup costs.
I also grew up in a household where my parents were constantly robbing Peter to pay Paul in order to keep everything going, so my thought patterns still have an irrational aversion to debt. Though I am educated in economics and finance and understand the difference between good and bad debt, the thought of owing anyone anything makes me sick to my stomach. It took at least a year of unlearning and coaching from some black business women to shift my perspective toward accepting investments. The journey continues.
On the bootstrapping process…
I have been working as a lash artist for almost a decade and I have a loyal following. So piece by piece as I formulated the ideas for my business, I diverted money from frivolous spending to investing in myself. I also used financial apps like Digit to automatically save for me so that I didn’t have to think about it. Digit really allowed me to always have a stash of cash to pull from when I need resources.
Eventually, the seed began to germinate and my community started to sow small investments into ideas I had. Those small kernels kept me motivated to continue the work when I felt overwhelmed and made it easier and easier for me to feel comfortable with the financial choices I was making.
The constant challenge I think for most entrepreneurs is that you eventually hit a point where your dreams outsize your ability to physically produce money through your labor. So now I’m at a point that I need to think about hiring support staff and paying for my own studio and I don’t want to work myself to death in order to do that. So I need other options. And that is what lead me to consider crowdfunding.
No matter what, bootstrapping with always be limiting in some way. So while I may recommend bootstrapping to start a business, I don’t think it’s the way to build a brand with true recognition today. Burnout is all too real and Black entrepreneurs especially have to preserve their spiritual and mental acuity in order to continue to thrive.
On where founders should focus their financial energy…
Profitability, market research, and branding have been the most important factors in my success thus far. I know that the products and services I provide are profitable enough to not make me feel like I am being taken advantage of and to keep me inspired to do more. I took a deep dive into what others were offering before I formulated my ideas to make sure that what I had is always 1 of 1. And my branding is inexorably tied to who I am so that when people support my idea, they are supporting me.
Support is paramount. It’s really important to have a community that you have invested in that will do the same in return for you. I don’t just have clients; I have fans, cheerleaders, champions. I ask and they jump to help. That’s a key part of the support you’ll need on those days that you want to quit. There will be many.
On the biggest money lesson…
That I don’t HAVE to bootstrap!! It’s now clear to me that I have a choice and I didn’t believe that when I started. I think a lot of Black folks don’t know any other way. We can’t trust any sector to truly support us, so we do it ourselves. And fortunately the winds of change are showing us that we can make a way that doesn’t require us to sell our souls in exchange for dollars.
On her #1 piece of financial advice…
Do it! Start wherever you are. You are never going to feel ready. You are never going to have enough money to feel ready to take the leap. As long as you are in alignment with the flow of what you are supposed to be doing the money will flow freely to you. Your business will not grow in a system of lack. You have to believe so deeply in your success and be so secure in knowing that the money will be there when you need it that the universe will have no choice but to comply.
Once I started to see the patterns of how I was limiting myself with my fears, all of the blocks stopped. The pathways opened and the money flowed. I don’t worry anymore. If it’s meant to be, the money will be in the bank once I take my card out of my wallet! Believe in yourself first. I bet on me every single day of the week.
Christen Dominique, Founder , Dominique Cosmetics
On bootstrapping over raising…
In the beginning, I invested everything I had into Dominique Cosmetics so naturally, I wanted to have complete control of my brand. Bootstrapping my own business meant that I could develop my own dream products and concepts into a working business as soon as possible without having to check with the opinions of others. I've always been very confident about my passion for helping others feel beautiful inside and out, and didn't want to compromise my vision or where I saw the brand's trajectory.
On the bootstrapping process…
I was able to self-fund my business by investing the savings from my early YouTube earnings. I'm lucky that I had a successful smart on YouTube, but I was also smart to save every nickel and dime that I could do create my brand.
On the challenges she faced…
The most challenging part of bootstrapping my business was finding the right labs and manufacturers to create the custom formulation and packaging I envisioned. We had to try working with a few different companies until we finally found the perfect fit for Dominique Cosmetics. Finding the perfect partner, and the setbacks that come with it, are just part of the process-- and it makes the final product that much more worth it.
I'd definitely recommend bootstrapping to other budding entrepreneurs and founders. Being your own boss provides you with the liberty to really pursue and create your vision. By the end, would you rather look back and think that you made too many compromises OR look back and think that you accomplished everything you wanted (even if it was pricey)?
By nature of self-funding, there will be a lot of risk and trial and error, especially if you don't have an expert or mentor to guide you, but through this, you will find that the mistakes make you more aware, confident and savvy. Every failure is experience.
On where founders should focus their financial energy…
Invest in the talent and skills you need to grow your business. Hire a core team. Find the right people, specifically people you can trust and are experienced in different areas of the business that you're not. For us, we searched for employees with experience in management, finance, product development, marketing, legal, and logistics. Outsource if you have to and bring in employees if needed.
On the biggest money lesson…
Keep track of every expense and every (product) revenue stream. I learned early on to maintain positive cash flow, and hire or outsource a business manager, bookkeeper, CPA, etc. to keep track if necessary.
On her #1 piece of financial advice…
Hire a core group that understands your brand and believes in your business, and find the best manufacturer to bring your creation to life.
Gianna De La Torre, Jill Munson, Britta Plug, Co-Founders, Wildling
On bootstrapping over raising…
It felt very affirming to do this on our own. It was the ideal way for us to stay true to our mission without outside influence or pressure. It's exciting and empowering to be a self funded, female owned brand. Empowerment is a big part of our ethos.
On the bootstrapping process…
We each made initial investments, started small, and put all the work. The first orders that shipped around holiday 2018 were sent from Jill's dining room table. Gianna also had her first baby right around then, so it was a very intense time. The hardest part is the fact that you have to dedicate every free moment to your business, but the upside is that it pays off in the end. With each month, we have dialed in our operations and gained more insight into how we want to grow. As founders, we know our business so well because we have done every part of it. Looking back, we are all happy to have done it this way, but it is not for the faint of heart. It's great to have partners in a venture like this, we are very grateful for each other.
On where founders should focus their financial energy…
That varies from industry to industry, but we invested in the quality of our product and felt that would speak for itself. That also included branding, eco - packaging, and premium ingredients. We didn't invest in marketing, we focused on gaining traction via instagram.
On the biggest money lesson…
Some things are worth the big spend, and there is a lot you can accomplish at a very low cost using social platforms.
On her #1 piece of financial advice…
The time you put in is the most precious investment. If you're putting your money into a project, you should expect to put a lot of your time there as well—it makes all the difference.
Roma Patel, Founder and CEO, Tejari
On bootstrapping over raising…
Tejari began the moment my passion for clean nutrition progressed into an urge to do something about it. I’ve always considered myself career-driven, but I never would’ve thought I’d start my own business. More importantly, I knew I wanted to do it on my own, with the help of my amazing advisory board. Starting your own business is stressful and challenging enough as it is—I didn’t want the added pressure and risk of an investor hanging over my shoulder, second-guessing my every move. As a startup, it’s important to learn and evolve as you gain customer feedback, and I wanted to be able to “lean in” to feedback.
On the bootstrapping process…
My husband and I have always been savers. In the beginning, we had a rough business plan and how much we wanted to “put into” it. However, we learned quickly that in a very competitive market, there are pros and cons to every approach when it comes to funding. For example, I wish I had a bigger budget to support content—content is SO important when it comes to a health and wellness product. Honestly, we can’t have enough. That being said, sticking to your plan as closely as possible will help keep you on the right track.
On where founders should focus their financial energy…
It really depends on your own business and the problem you’re trying to solve. For me, it’s simple—all of my energy is put into product development (aka, my partnerships with Registered Dietitians and Food Scientists) and content development. This allows us to educate our customer base on nutrition while teaching them how to incorporate our superfood protein blends into their diets.
On the biggest money lesson…
At the launch of my business, I got too creative-happy and invested too early in photography and branded assets. Although these are very important, I could’ve eased into this more by starting with the essentials and growing assets over time. Now that I’m creating new products as we speak, this lesson has been a great opportunity for me to take what I’ve learned and applied it to my launch strategy moving forward.
On her #1 piece of financial advice…
Don’t let the “big guys” get you down. I often have those days where I think to myself, “If only I had a team of people… If only I had…”. It’s so easy to compare yourself to other brands and get caught up in all the things you don’t have—before you know it, you’ve lost an entire day. There’s never enough time. That’s why it’s so important to control what you can and make the best decisions based on what feels right. Also, make sure to surround yourself with people you trust and who understand your business. I happen to work with amazing freelance consultants and am so happy to have them as my resource.
Dr. Heather D. Rogers, Founder and CEO, Doctor Rogers RESTORE,
and Co-Founder, Modern Dermatology in Seattle.
On bootstrapping over raising…
I am very fortunate to be in a dual income household with a very supportive husband. We both work full time as physicians. When I started Doctor Rogers RESTORE, I did not want to be beholden to anyone that could affect the process. I am a perfectionist, I was doing something new and I was putting my name on it. The process could not be rushed or limited by having to meet someone else’s financial deadlines.
It took three years for me to bring my first product to market because it was to be used on healing skin. It had to be both safe and effective and that requires time for lots of testing. I also wanted to use only the highest quality, most sustainable ingredients and that is just expensive. I am driven by outcomes so if it works better, if it is safer, and I am going to use it even if it is more costly. The beauty industry is about making money while I am about making things better. I needed the freedom to have that be the driving force in my decisions, not making money.
If you are lucky enough to use your own capital, do it, but not to the point where you are putting your way of life at risk. Just know the more people who get involved earlier in the process the more complicated it can be to stay true to your vision. Also, never ask for money unless there is no other way through. Be creative and keep at it.
On where founders should focus their financial energy…
I read somewhere that it takes five years and one million dollars to build a successful company. Whether or not that is true for your specific company, those are good guidelines to think about. Can you keep your day job to make ends meet for those five years? If not, you will need a business partner and then you have put a lot of work in early on in regards to what having that partner means, and what percentage of the company she or he will get. Having a good business attorney and accountant can help you not make missteps early that you may pay for in the years to come. Also, it is important to identify the core values of your business early and ensure that any partners respect these same values.
On the biggest money lesson…
Good people are worth good paychecks. My greatest expense is my payroll but I get to work with amazing people who are incredibly good at their jobs. They get me, they get the brand and they understand what I am trying to do, which is now what WE are trying to do and that is a wonderful thing. I could not get by a single day without my team.
On her #1 piece of financial advice…
Make a line in the sand. How much money are you willing to spend on your dream? What are the variables that would change that number? For me, I spent twice what I was willing to put in but the second half was to fulfill a huge order from FabFitFun so it became a calculated risk with a large, expected payout. It was still a scary time but it was a risk I was willing to take and it was the right choice.
Arielle Olfers, Founder and CEO, The Southern Influence
On bootstrapping over raising…
I was raised to "never quit your job until you have a new one.” While working at an experiential agency full time, I took my first couple contract clients and worked nights and weekends until I was able to go out on my own. I didn’t have access to outside or personal funding, so I didn’t really have another choice. Bootstrapping our agency was the only way to go into business, and using my first available extra income to hire a trusted female partner (Caroline Dedeker) was one of the best business decisions I ever made.
On the bootstrapping process…
I stretched and overextended myself until I was able to bring on additional help–working nights and weekends, and picking up one-off projects. This went on for about six months before I was able to quit my full-time job at my previous agency. It’s not tenable long-term, but it prepares you for the challenges ahead. As far as challenges go, as a small business sometimes it feels like you’re on a see-saw. On one hand, business is going very well, but I am scrambling to find enough resources with the skill set I need. On the other hand, when business is slow I have employees on hand I am still responsible for. It’s a continual challenge to find the balance of retaining and growing talent, while retaining and growing business.
Another challenge I faced starting my agency was that sadly, not all women entrepreneurs are willing to help other women. Especially in PR, I experienced imposter syndrome, a competitive and oversaturated market, and a repetitive response of, “I’m too busy.” It took awhile to find my people, but once I did, I also found my voice and was able to put the imposter syndrome to bed. An observation I’ve made is that once I built up my network and my confidence, I started hearing from those busy folks wanting to be involved in the work we were doing. As frustrating as that is, I learned quickly that’s how the world of entrepreneurship works and looking back, I would insert myself more often and match that with being more gracious to myself and to others who might have been going through the same thing!
I would recommend the bootstrapping route to anyone entering into business ownership. Especially, in this time of free education on platforms offered like Create + Cultivate, Facebook, Youtube, and Instagram. There are endless resources available if you’re willing to do the research and the hard work. Another part of bootstrapping is being open to the advice and experiences of others while sticking to your internal compass. Stay the course, take it day-by-day and learn to bob and weave. We live by a few things at The Southern Influence: be nimble and kind, have grit, and be a f*cking pleasure to work with. Note: We didn’t come up with the last one, it was some of the first client feedback we received and we use it as a guiding principle.
On where founders should focus their financial energy…
Focus on making more, not spending less. It creates a mindset of abundance. Apart from that, time is money. Leverage contractor relationships to bring on help in your areas of highest demand. At TSI, we have a few editors, film crew and PR professionals on-hand whenever needs arise, and have had as many as three production or event jobs running in a single day. Film work is very seasonal, so having the ability to flex with demand helps us meet the need of our clients and their partners.
On the biggest money lesson…
Get a personal banking relationship. Bigger isn’t always better when it comes to financial institutions. Find a banker you can speak to. Someone who will listen and is excited about your business. You will have questions and you deserve to have them answered. Forming this relationship will give you someone to reach out to when you need help is one of the biggest lessons we’ve learned during a global pandemic.
On her #1 piece of financial advice…
Focus on your own uniqueness and realize what worked for someone else may not work for you. Apart from that, get a personal banking relationship and a line of credit on reserve so you’re prepared in the event of a crisis (hello, COVID-19).
Alexia Wambua, Founder,
On bootstrapping over raising…
I wanted to have creative control for my brand, as it is birthed from my facial treatments. I wanted to create products that I see a need for in my everyday life.
To me, keeping creative control gave me the freedom to create the products that I wanted. I have such a great test market with my everyday clients and I get their feedback on how they feel about our products.
It's not about chasing a trend to create a product, it's about seeing what is needed in the clean beauty market and in your everyday regimen.
On the bootstrapping process…
I was working full time in the treatment room, and coming home to work on developing products essentially— I have two jobs. I naturally have an administration edge to me from previous jobs so I was able to figure out the logistics, but once you dive in and realize you are building from the ground up it is beyond having fun.
In the beginning, I took out a small business loan but did not put anything on credit and it helped me get off my feet. It was my decision to do that versus having an investor. I then paid off the loans and figured out my cash flow to put back into the business.
My advice to other entrepreneurs is to do as much as you can until you need someone—get as far as you can on your own first. It all depends on how much control you want and your plan on selling it in the future. I want to create products that people don’t want to live without, that are authentic and memorable.
On where founders should focus their financial energy…
It is very circumstantial to your brand for where you put your financial focus. You should look at the big picture, you may want to invest in your website, products, or photographer depending on what your specific needs and weaknesses are.
On the biggest money lesson…
The biggest lesson that I have learned is that I don't have to have everything all at once. Doing too much too fast, in the beginning, taught me a lot about product development. I developed products for my clients based on what they needed at first. I decided to pair back on products and focus on quality versus quality and from there I learned to tighten up my assortment and ingredients.
On her #1 piece of financial advice…
It is okay to utilize your network, you can create from anywhere and to outsource certain things that you don't have to handle, it’s all a part of being a small business. I have a lot of creative friends that I utilized from my label maker to my phenomenal photographer.
There are so many details that are presented at the beginning that begin to evolve. From ordering to costs of shipping, packing and sourcing, timelines, and raw materials that you don’t necessarily know everything about until you get started.
Don’t be afraid to do something, even if it is not trending. If you have a story and it’s authentic, go for it.
Taylor Elyse Morrison, Founder, Inner Workout
On bootstrapping over raising…
I worked at a startup where the owner bootstrapped for the first several years of the business, so that seemed like a logical way to start. As I started getting more exposed to the world of outside investment, I began to see bootstrapping as a way to be more intentional about Inner Workout's growth. I didn't want to be forced to hit aggressive growth targets in order to provide investor returns; I wanted to prioritize building a values-driven organization.
On the bootstrapping process…
I'm fortunate to be in a partnered relationship. Having a husband with a day job definitely made this road easier. We also had savings to help support us. I transitioned out of my role in a part-time position, which also helped me have a steady income stream. I'm naturally a scrappy person, so getting my hands dirty to build the business came easily. I struggled a lot with prioritizing my time. I think everyone's situation is different. Bootstrapping worked for me, but it isn't for everyone. Some people need the influx of cash to develop and grow their business. Some people want to build a unicorn company.
On where founders should focus their financial energy…
Business owners should focus on the tasks that generate revenue. There are tasks that are more exciting than others. There are opportunities that are flashy, but you have to really get clear on impact.
On the biggest money lesson…
Stay close to your numbers. It's hard to make effective decisions if you're not diving into your financials on a regular basis.
On her #1 piece of financial advice…
Test before you invest. You may have a brilliant idea for a company or a new product, but that doesn't mean you need to put all of your money behind it right away. Send out a survey. Collect pre-orders. Test the waters with a smaller scale product. This will save you so much money in the long run.
Chelsea Scott, Co-Founder ,
On bootstrapping over raising…
My team and I saw an opportunity to do something truly unique by importing Korean Beauty products and other global beauty innovations to the US that weren’t currently available for sale. With our collective experience and my personal experience on HSN, we felt the business model was one we could execute with low barriers to entry and relatively low overhead expenses.
Since the direct-to-consumer space and HSN provided us a quick and direct way to reach our customers, we wanted to focus on making sales rather than focusing on raising capital. It was always our intention to invest sales revenue back into the business.
On the bootstrapping process…
We started small with a focus on one or two products that we felt had the best opportunity for success, then invested our own money into inventory. Inventory has always been our biggest investment. As a curation platform for beauty innovation from around the world, we knew that our concept would only work if we focused on the best products. We were concerned that if we looked for outside investment that our focus would shift from the product to investor relations. Because we were self-funding, we were sometimes faced with the challenge of deciding between two products or limiting the inventory on others. When you don’t have tons of cash flow or investment at the beginning, it sometimes felt as though we were missing opportunities.
Every business is different, but I would recommend self-funding as long as possible because you can maintain the most ownership and control of your vision for the company.
On where founders should focus their financial energy…
I think each business is different, but I have always found that if you truly develop and make a product that solves a problem for real people, you can really make an impact and build a business. Spend time on learning about the solution you are providing and make sure you have a viable product that people want, then invest your money into making that. When you are small you don’t need to sell to everyone, you need to find your first customers.
On the biggest money lesson…
Budget for the unexpected! It is hard to budget for things you may not expect, but from all my experiences something always comes up. Be ready to cover an unplanned expense. That may mean using a credit card or adjusting budget.
On her #1 piece of financial advice…
It is always going to cost more than you think so think ahead, cut any expense that is not needed or working. It is better to trial and error quickly than to let expenses build up. The hard work and sacrifice are real but when you begin to turn a profit, with no outside help, just your team's sheer belief in what we are doing, it’s the greatest reward of all.
Pooja Bavishi, Founder and CEO, Malai Ice Cream
On bootstrapping over raising…
Most food businesses, at their early stage, are not investable. Typically, they need traction in order to be able to take on debt or give away equity. However, there are other resources available for startups ranging from crowdfunding to grants. When I started this business in 2015 bootstrapping was the best and only option for me. Looking back, I am truly happy to have taken that route as it gave me the control to make 100% of the decisions that now define Malai.
On the bootstrapping process…
I self-funded my business with personal savings, and with some assistance from my parents. During the first six months, I focused on proof concept, which allowed me to stay extremely lean financially while still developing opportunities. This ensured that I wasn't spending more than what was coming in without knowing the types of opportunities that would arise in the future.
On where founders should focus their financial energy…
I think it's important for a business owner to always be comfortable with all finances. The nature of business is capital intensive, and you need money to grow. So even with all other responsibilities, business owners should always be seeking opportunities and feel comfortable to fundraise.
On the biggest money lesson…
You always need more than what you think you do, and you need to plan for unexpected events.
On her #1 piece of financial advice…
Although all financials are important, make sure you have a strong understanding of your cash flow. Above all else, it is important for business owners to know the money that is coming in, and more importantly, going out.
Courtney Claghorn, Founder, SUGARED + BRONZED
On bootstrapping over raising…
I started my business when I was 23 years old and to be completely honest, I didn’t even consider anything other than bootstrapping because I knew nothing about the capital raising process, nor did I think that anyone would invest in my concept at that age and lack of real-world experience. I started S+B out of my apartment in an effort to keep start-up costs low and become profitable from early on so that I wasn’t dependent on outside funding to grow the business.
On the bootstrapping process…
My boyfriend, co-founder, and I each put in $500 initially and continued to reinvest profits every step of the way. In the first few months of getting the business off the ground, I kept my “corporate” job and would take clients on my lunch hour or after work (because fortunately both my office and my apartment were located in close proximity within Santa Monica). Once the business began to gain traction, I quit my job and looked for our first retail location.
I used the (very small) amount of accumulated profits to pay for the build-out of the first location on Montana Avenue in Santa Monica. We weren’t able to afford anything fancy so we continued to focus on providing great services and creating a welcoming environment. As the business continued to grow, I took the smallest paycheck possible and re-invested most profits and took out SBA loans to open additional locations. We didn’t raise our first round of funding until we reached 10 locations.
On the challenges she faced…
We faced many contractor and architect issues in our early years. We knew nothing about the construction process and it was definitely a learning curve. We also quickly realized that everything becomes more expensive with expansion—legal fees, insurance, etc. In an effort to remain lean, we tried not to hire additional people until we undoubtedly couldn’t handle the work ourselves and in retrospect, it was often too late. We often found ourselves working around the clock to the point where it was incredibly stressful and probably not healthy.
Despite the difficulties, I would recommend bootstrapping to other entrepreneurs if at all possible. I know that some businesses are literally impossible to start without funding, but a lot of businesses raise money from the beginning when it wasn’t absolutely necessary. I think that bootstrapping is a great way to remain nimble and take time to truly understand your business, the customer, and what the customer wants. It creates a culture of frugality and forces everyone to only spend money where it’s necessary.
As much as I admire entrepreneurs like Sara Blakely (founder of Spanx) who never raised money, I know that’s not realistic for everyone. We even decided to eventually raise money with S+B, but it was after many years of business and thoughtful consideration. Although bootstrapping in the early days can be hard, it creates a foundation that will likely make you more successful in the long run, even if you do choose to eventually seek outside funding.
On where founders should focus their financial energy…
I would say the highest priority is spending money on your core business products and/or services (in terms of hiring and training). Beyond that, it’s most important to focus financial energy towards resources that allow you to track your ROI, such as digital advertising.
On the biggest money lesson…
I would say that my biggest money lesson has been to question every business practice that costs money, no matter how standard it may seem. No matter how intelligent some of us are, I think that the herd mentality can still lead us astray at times. I have seen some really smart people spend large of amounts of money on business services because it seems standard or unavoidable, but when you get in the habit of questioning all spending, you begin to realize that a premium price tag can often be avoided with a combination of creativity and hustle.
On her #1 piece of financial advice…
My financial advice for new entrepreneurs is to stay lean for as long as possible. The business naturally gets more expensive as you grow, so why would you want to load up on unnecessary expenses early on? Much like a lot of things in life, it’s much more difficult to take away extra support and resources after getting used to them than adding them once you realized that you really need them.
Christina Uzzardi, Founder and Chief Glow Giver, Cheeks & Co.
On bootstrapping over raising…
After consulting with mentors and other business owners, and going the equity fundraising route for almost a year to no avail, it was clear bootstrapping was my only option to launch the business. Without 1. a clear proven business model (I didn't have that yet since we were pre-revenue) or 2. a successful previous exit (I didn't have that either) equity financing probably isn't going to happen. Our only options were Friends & Family (not an option personally) or debt financing so I took the quickest, most realistic path. I saved the fundraising for further down the road. If I was going at it alone I knew that I had to be very smart with every dollar spent, and invest in the right areas.
On the bootstrapping process…
I self-funded the business primarily through an SBA Startup Loan. The process was long and tedious. From start to finish it took nearly a year from the time I decided to go the debt financing route. Financing your start-up through an SBA Loan involves a lot of red tape. Our entire construction and build-out was micromanaged from the lender, down to the last dollar spent but it was the best thing for my small business since it really helped me analyze my spending. It was an added layer of protection.
I would recommend debt financing for a startup. Of course only if you have the credit and means to secure a loan. Again, it's not easy. But not being tied to investors, especially in the beginning is the best thing you can do. You retain control and can truly build the brand you set out to build. Investors typically require huge returns, and as a small business, your focus should be building a brand and a successful business model. And when you take money from friends and family it can get complicated.
On where founders should focus their financial energy…
Understand how the money flows. It's important to find a good accountant that understands the big picture and can help you successfully set up your books. If you aren't a numbers person, don't kill yourself (and your business) trying to be.
On the biggest money lesson…
If I could go back I would have secured a larger runway/working capital cushion. These past three months since COVID-19 have been very challenging. It's no fun to have to go back and raise or secure more financing so soon after opening.
On her #1 piece of financial advice…
I realize this advice may not be the most ideal for certain businesses like high growth tech startups, but I firmly believe that #1 most important thing is to build a working, profitable business model before you launch! Be clear on your profit margins, and how they work in the overall picture of your business. Oh, and don't set your prices too low. It's a lot easier to lower your prices than to raise them.
Natasha Samuel, Founder, Sol Studio, Instagram Strategist and Host of The Shine Online Podcast
On bootstrapping over raising…
I decided to bootstrap my business because at the time it was the only route I knew to take. I was still in college figuring out how to not be "broke" so I was scrappy with the tools and investments I made to ensure I was bringing in money first before I put a financial strain on myself. While I outsource and invest in more tools now, I still keep that mindset of only investing in what will move the needle further in my business.
On the bootstrapping process…
I self-funded my business by using my financial aid at the time to support my personal expenses while only spending the money I brought into my business on expenses. In the first few months in business, I wasn't making enough to fully support those expenses, so I eventually had to live at home for a short time which was a difficult but necessary choice to make. I'd recommend staying within your means to other entrepreneurs starting out whether that means keeping expenses low, moving home, getting a part-time job, or making sacrifices to fund your dream. Looking back, I wish I had savings to fall back on but since I was so young I ran with what I could by making sacrifices and being scrappy with free tools and the skills I already had.
On where founders should focus their financial energy…
The most important financial investments are things that are necessities for your business, especially during the early stages. It's so easy to get caught up in needing to have a website, branding photos, logos, and assistance out of the gate but you truly don't need those until down the road. Focus on what you need to make money, for me it was scheduling tools for social media posts, a CPA to help me with my finances, and a CRM for managing my clients. Every other tool or outsourcing task I could figure out with a free tool or I could wait to implement until I was ready. Don't get distracted by the sexy things, focus on what makes money.
On the biggest money lesson…
The scariest investments that are made with intention are always worth it. When I looked at a problem I had with my course sales funnel and page, I knew I need experts to help me improve it for my next launch. Spending $1K+ during a pandemic did not seem feasible, but it led to a $10K launch and an improved funnel that can be refused over and over again. Smart investments in people and tools that save you time and money for a better result.
On her #1 piece of financial advice…
Separate my bank accounts from day one. This is something I wish I did so much sooner to make taxes easier and managing my money less stressful. I now have separate accounts for business and personal checking accounts, savings, and emergency funds. Instead of meshing the personal and business together, keeping them separate helps me spend wisely and stay in my means while protecting myself for crazy situations like COVID-19.
Dave, Devon, Michelle, and Sydney Carlson, Co-Founders, Wildflower Cases
On bootstrapping over raising…
Our company started by an accidental run-in with Miley Cyrus in 2012 where she fell in love with a phone case that my mom had made for my sister and I. My family saw an opportunity to start a business and the timing was perfect because we started receiving orders the next day which helped fund the companies growth immediately.
On the bootstrapping process…
From day one, we decided to keep our overall costs as low as possible. However, whenever we needed to purchase supplies, etc. we used credit cards that had reward points and we pulled from our savings account. The only challenge was that we grew a little slower since we were self-funding. We would definitely recommend this route to other entrepreneurs because you end up owning 100% of your company versus having to give up equity to an investor.
On where founders should focus their financial energy…
During start-up mode, all of our funds went to buying inventory. So for us, our focus was on refining our cost of goods.
On the biggest money lesson…
Don’t feel the need to do everything. Stay focused on what you’re good at and perfect it. Perfect the costs, perfect the cost, perfect everything.
On her #1 piece of financial advice…
If it’s not broken, don’t fix it. Get creative and don’t be afraid to DIY. We live in a time where we’re able to run a company out of your own home. Try not to compare yourself to the flashiness you see around you, thinking you need a huge office space and a big team. Start small and work hard. Let the growth happen naturally
Tiila Abbitt, Founder, Āether Beauty
On bootstrapping over raising…
I wanted to bootstrap my business because I wanted to have creative control. As a product developer with a fine art background, the design and formulation is not something I was willing to compromise. I had a vision of a brand and I wanted to create it.
On the bootstrapping process…
I remortgaged my home in order to take out $100k to bootstrap this business. There are many articles out there that say you need a million dollars to start a beauty brand, and that's completely true. So as you can imagine, I had to be scrappy, very scrappy. And I still face financial struggles, since I have not taken any outside funding, I'm still bootstrapping. I have not paid myself a dime since I launched the brand two years ago which is hard. All of the money goes back into my business and I could definitely be building it a lot faster and louder if I had the financial means to do so. But there is so much I am not willing to compromise on ethically-sourced ingredients and sustainability, I have yet to meet an investor who would not interfere with that integrity, who believes in what I am building as much as I do.
I set out to change the industry and it's changing. No one was talking about sustainability in prestige beauty or ethically sourced chid labor-free or fair wage ingredients. Aether Beauty is the only fully recyclable makeup brand in all of Sephora in our current recycling streams. And other brands are noticing and following. The EPA reported that 1/3 of the landfill was from the beauty industry and it's an addiction to single-use packaging. I'm very happy to be leading this change.
On where founders should focus their financial energy…
I think it depends on the business strategy, but if you are a DTC brand, you're going to be paying to play and it costs so much money in advertising to make a DTC brand successful. So you'll definitely need to take on investors from the start. It's why I went the retailer route because the right retailers can help build brand awareness as well. And there are numerous studies out there that show DTC has now surpassed the costs it takes to launch a brand at a retailer with how much you have to spend in marketing and ads that if you are small without a lot of funding, retailers can be a great way to help build your brand.
On the biggest money lesson…
Cash flow is always hard, especially bootstrapping. But just because you can get some doesn't always mean you should take it. I've had investors knocking since day one and it was never a harder lesson. I never knew the investor world prior and when I heard someone wanted to invest, I took the meeting. I spoke with so many investors that took months and months of meetings. It's like dating, everyone loves each other at first and then the closer and closer you get, if you sneeze wrong, they look for a reason to say no.
I've had some investor offers as well and they were just so founder unfriendly in the terms, I'm very happy I was able to say no. The stats say 2.2% of funding goes to women, and it shows. I've never been more demeaned in meetings with men who do not understand the beauty landscape or let alone the ethical beauty category I am building. And if I just had any insight, I wouldn't have taken so many meetings where I could have put that time and energy instead into building my brand. As the only employee for my whole company, my time is most precious.
On her #1 piece of financial advice…
Always take into account that you will always need more money than you anticipate and plan for a rainy day.
Kristy Hunston and Grace O’Sullivan, Co-Founders, Avoila
On bootstrapping over raising…
For us, there wasn't any other way. We were excited to go out on our own, leaving the corporate world behind us, and that meant that we were going to be financially responsible for launching Avoila.
On the bootstrapping process…
In the beginning, we agreed on how much we were both going to invest, knowing of course that we'd have to revisit this conversation as we moved through the process should the needs of the business change. Rather than putting this agreed-upon capital into the bank right away we made investments as needed which felt like the responsible approach.
Since we are self-funded, we have moved more slowly than brands with major investors. We felt that we had to be extremely thorough in our search for any creatives, manufacturers, and vendors involved in our bootstrapping process. We had to ensure that not only were the partners able to meet our quality standards, but they also needed to work within our budget while adhering to our brand mission and story.
While it may have taken longer to launch, we highly recommend taking the time to make a solid plan to other entrepreneurs (if the means exist) because it helped us build a strong stable foundation to grow and expand from.
On where founders should focus their financial energy…
For us, the biggest focus was on creating a quality product that produced results. So we concentrated on product research, development, and manufacturing (including conscious ingredient sourcing). As consumers ourselves, you can tell when a brand hasn't put thought, time, and effort into their product. As Founders of Avoila, it was important that we delivered a high-quality product that would translate into positive results for our consumers and repeat sales.
On the biggest money lesson…
Our business launched in February 2020 so we are still learning financial lessons. If we had to talk about one lesson, it would be around evaluating the best use of our money. For example, we chose to put a significant amount of our money into a marketing channel that has a very low promise of return because we felt that it would increase our awareness and credibility as a new entrant to a saturated market. The return on investment has been lower than expected, and we now realize that our money may have been better spent on new product research and development.
On her #1 piece of financial advice…
Be thorough, but not so thorough that you're paralyzed. Enjoy the process and possibilities of taking risks.
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