How to bootstrap your start-up for 50K or less

Filed in archive Bootstrapper Tips on October 18, 2007

We've focused a lot here at BootStrapMe.com on starting a business for next to nothing.

By definition such startups must be small and lean using mostly existing tools and services and plenty of bartering to get cash flow going in the beginning.

But in this post for Sucklevine Development, LLC, entrepreneur Matt Rogers of Aroxo, a new person-to-person trading exchange, suggests that even larger scale and more specialized on line ventures can be launched without spending millions on startup.

Here are Rogers' tips for getting started:

• Create a strategy describing the market you wish to serve, what is wrong with how it is presently being served, how your business model will fix it and how you plan to get the word out.

• Create a computer mock-up of the system you want containing all necessary information that must be included (For more on the free tools needed to create such a mock-up see Matt's Oct. 9 post "A step-by-step guide to starting up" on his Digging my own ditch blog.)

• Create a functional specification document explaining to a potential developer precisely how every screen, button and link on your mockup is expected to function.

• Create a "long list" of possible developers who could be used to create the needed system and contact them about non-disclosure agreements to allow for further discussion of your project.

• Go through a request for information process to collect more information from prospective vendors and to narrow down your list (Matt recommends between 4 and 10 vendors.)

• Write a request for Quotation. It should include the "approach, costs, timescales and conditions under which each vendor would deliver". Use the process to narrow things down to a first choice and a spare in case of problems with your primary choice.

• Negotiate a contract. (Matt has budgeted between $3,000 and $15,000 for professional fees like legal assistance and in this scenario it is probably a needed expense.)

Other notes:

• Hiring the necessary staff to build the site instead of outsourcing would likely cost between $5 and $7 million before launch and would look like more of a Venture Capital project.

• Matt's also added $4,000 to $10,000 in travel expenses allowing you to meet developers face to face in the event you outsource to India or China for creation of your website.

• Before you consider doing so, however, read Scott Burkett's post on "Offshoring for Startups" at Pothole on the Infobahn.