Bootstrapping Made Simple

1. BOOTSTRAPPING MADE SIMPLE How to start multiple businesses with no money out of pocket Dan Kammeyer

2. Table Of Contents What is Bootstrapping? 01 Our Bootstrapping Story 03 Another Bootstrapping Example 05 07 Bootstrapping Your First Business 08 Conclusion

3. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com What is Bootstrapping? For example, with no fixed costs, a business owner could choose to pause the business project to pursue other endeavors or they could even work another job temporarily without having to worry about paying a loan payment they took out on the business while they did so. Likewise, cash flow is the lifeblood of any business, so maximizing the amount available for marketing, payroll, or other expenses improves the sustainability and scalability of the enterprise in the long run. Bootstrapping is the process of using capital (which comes in the form of money or time) that you already have available to start and/or build a business or non-profit organization without having to borrow anything in such a way that it has to be paid back. The benefits of this approach should be obvious. Debt puts a burden on the organization in the form of fixed costs that can not only limit the growth potential by reducing overall cash flow, but also increases the stress on the business owner. 1

4. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com As a practical illustration, instead of taking out a small business loan to start a new restaurant with a building and radio ads, you could instead start a catering business from your home and use free marketing methods online (such as social media or Craigslist) to find your first customers. This would allow you to fine tune the food you offer based on feedback from them without having to “bet the farm” on your cooking prowess. Then, as you   build cash reserves (by saving your profits instead of spending everything you make), you can purchase a food truck without debt and continue to offer catering services while also offering meals from your food truck on weekends and special events. You may employ family members to help instead of employees to save on labor costs at this stage. If you continue to improve your recipes, while removing items from the menu that patrons don’t order that much, you may end up with enough repeat business to open a restaurant of your own while avoiding many of the associated risks involved with doing so (because you will already have an established menu and customer base.)   Finally, even if the worst happens and you are forced to close your doors for some reason, if you used a bootstrap approach you would end up with an asset (a food truck or building you could sell) instead of a liability (in the form of a huge loan you can no longer pay back.) 2

5. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com Our Bootstrapping Story  Here is an abridged account of how my wife and I have been able to start our multiple companies over the years using similar bootstrapping techniques to the one outlined above. I was able to start my first company, an IT services organization, using some money from my last job’s severance pay. It cost $100 for me to start an LLC in my state. If you can’t afford $100, you can have customers pay you directly to start with until you have a spare $100 for this step. It cost another $50 or so for me to get a set of business cards, which are not necessary in the age of smartphones anymore. A business checking account at US Bank is free as long as you deposit some money (like $300) to start with. If you don’t have any money to fund the account, you could open a free business checking account at a credit union with only a $5 deposit instead. I had customers write checks as payment for my services so I didn’t have to worry about credit card transaction fees. I was able to reach out to my former employer’s previous customers (because my employer had gone out of business) to find my first customers. From there, I would ask for referrals to find other clients like them that I could serve. By never taking out any loans, working from home, and structuring my lifestyle around the amount of income the business was producing, I was able to hire our first team member after a couple years as the book of business grew enough to support another person’s payroll. This freed me up to find more clients and repeat the process until there was enough monthly revenue to pay the entire team as well as myself, even if I didn’t work anymore.   A few years into that process, my wife wanted to start her own Surrogacy agency. By taking her through the same startup process as the one I went through above, we were able to set up her LLC, checking account, and a website using excess funds from the IT company. She established relationships with the local fertility clinic and fertility lawyers, and asked them to put links to her website on theirs as endorsements for her services. This way, without any marketing or advertising budget, she began getting clients to serve. Her income is more sporadic as opposed to the consistent monthly income from the IT services company that we use to fund our lifestyle, so the money she has earned in the agency has been used to fund our real estate company. 3

6. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com While the income from the IT services company is technically passive at this point, our long-term goal is to have income streams that allow us to live wherever we want in the world. Every once in a while, a customer wants to talk to the “owner” of the IT company, or I may have to run a quick errand for the company, so I remain tied to the geographic area that the company is in (the Boise, Idaho area.) As a result, we realized that other passive income streams would be necessary. This led us to use the profits from my wife’s Surrogacy agency to fund the purchase and remodel of multiple rental properties over the years. As the properties appreciated in value, we have sold them and used the equity to pay off mortgages on other properties, thus increasing their profit margins. As of this writing, we have 4 properties (2 duplexes and 2 single-family units) as well as our current home, which we will begin renting out shortly for a total of 5 rental properties that will produce a total of about $5000/month in profit passively without requiring us to live in any given area, as they are managed by a property manager instead of us.     While that is a liveable income in itself, it does not provide adequate diversity for a long-term financial plan. If the rental market were to suffer some unforeseen setback that reduces our rental income significantly, we would have little recourse. As a result, we are also pursuing other passive income streams that are not geographically dependent, such as starting an online publishing agency, an online financial and business coaching company, and providing liquidity to lending firms like BlockFi and collecting interest payments. The resources needed to start both enterprises were provided by the excess profits from the IT company, and funds for BlockFi are provided by the profits from my wife’s agency or from property sales. Each project has the potential of providing a few thousand extra dollars each month in the form of royalties and online course sales with no customer service requirements. Ultimately, the goal is to sell the IT company once we have $10K/month in truly passive income that will allow us to realize our dreams and live wherever we prefer at any given time without having to worry about the challenges that typically come with having employees or customers. Hopefully by sharing our story, you will be encouraged to do the same if you so choose! Click here to learn how to start your first online business today... 4

7. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com Another Bootstrapping Example  Let me share another example in the way of an actual story about someone that I know. He wanted to start his own business, he wanted to be independent and have the freedom that being self employed and building his own company represented to him. He was working for a financial accounts receivable management company. He didn’t really like his job, like so many people we all know. He was living in a one bedroom apartment. He did some research, looked at the market in his area and noticed a lack of professional cleaning companies. He had no real capital to launch a new business and not much money for equipment, supplies, marketing etc. So he gathered up all his ready cash which was about $500. He started looking through Craig’s List ads and hitting garage sales and with his initial $500 he was able to get some basic pieces of equipment and supplies. He bought a used vacuum, mops, buckets, wringer, cleaning products and launched his business on the weekends while he kept his 9-5 job he hated. He ran some free ads on CraigsList to get started and get a couple clients.   His first couple clients were homeowners that needed their house cleaned on a regular basis. He was the one and only employee. He was earning what a lot of people call sweat equity in his own business. He put all of his earnings from cleaning back into his business. Placed some flyers around, kept running his free Craigslist ads, got a couple referrals. And after a few months he was busy with six clients every weekend, three on Saturday and three on Sunday. He was tired, but he was building his own business and his future. He still was working his 9-5 job. He had earned enough to buy some upgraded equipment, a commercial vacuum and better quality basic cleaning equipment. By this time he had realized that his idea was working, he also realized that he liked the business and he was turning a profit and had saved some additional funds. All of this with $500 and sweat equity. He made the decision to go after commercial cleaning accounts. He ran some free Craigslist ads targeted at small and medium businesses, office buildings. He got some cheap flyers made and mailed them out. He contacted some real estate management companies and asked for referrals. Over the next 4 months he was able to get three new commercial accounts. He took the cash that he had saved and bought a commercial floor polisher and an additional vacuum and took the big step and hired a helper. 5

8. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com He was still working his 9-5 job and working weekends and working three nights a week. From his start to this point he had invested his original $500, his sweat equity and the profit that he was earning, well not all the profit   he had also been able to save enough to cover his regular expenses for a few months. So he now had the experience, a proven business model that he had developed and perfected, reliable equipment that all fit in his then station wagon and a trained worker. He made the decision to do another marketing campaign and go after additional commercial accounts as well as additional regular home owner accounts. Within 90 days he had added an additional five new commercial accounts, and 8 new residential accounts. He had hired another employee and he quit his 9-5 job. That very humble and low risk beginning turned into a very successful and prosperous company with about twenty employees, several company vans and a lot of very happy customers. He became a business owner, working on his business not in his business. This is a great example of how a very small amount of initial capital, sweat equity, a good work ethic, a good business plan, very good money management and patience can pay huge dividends.   (Special thanks to Frank White for sharing this story) 6

9. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com Bootstrapping Your First Business  So how can you start your first business if you don’t have another one to provide the capital necessary? The following suggestions are methods of raising small amounts of money easily that could provide the capital necessary to start a new business project without needing to borrow any money with fixed payments: You could borrow the capital necessary from someone who has it and is willing to take a small percentage of your profits instead of a flat monthly rate. This would allow you to scale the business and prove it works without a set monthly bill choking your profits. Once it grows, you can always pay the loan off with the profits. If you can, you’ll want to negotiate a reduced payoff if the business fails (or none at all if possible.) A similar strategy might work if you need space to sell merchandise. You could ask a local coffee shop to let you sell art pieces on their walls in exchange for a percentage of the sales, or ask a local thrift store to let you use a corner of the store to sell antiques in return for a percentage of the sales instead of a flat monthly fee Sell plasma. If you have a plasma center in your area, you can sell plasma twice a week and earn around $200/month tax-free A Yard Sale. How much stuff that you don’t even use could you sell and raise the money you’d need to start a new business? Chances are you have enough already Rent a room out on Airbnb. Rent a vehicle out on Turo. Rent your driveway out on Vanly. Sites like these are a great way to earn some extra passive income Drive for Uber or Lyft. The gig economy is a great way to earn some extra side money Affiliate marketing online. Lots of people make a little bit of money promoting products online in their spare time using sites like Clickbank Reduce your lifestyle to free up some of your paycheck. I know it’s unheard of in the US today with our consumer mentality, but what could you go without for a while to give you some extra cash to start something? If you regularly get a tax refund each year, consider increasing what you claim on your W-4. This would increase your monthly paychecks and reduce the size of your refund each year. Ideally you want to break even or maybe owe just a small amount. That is money you could be putting to work in your business. Why would you give the government an interest-free loan each year? This eBook created with... 7

10. For more resources, online courses, or 1-on-1 coaching, visit www.slaverytosuccess.com Conclusion Hopefully that gives you some actionable strategies to start your first, second, or even third business venture without having to resort to the stress or financial burden imposed by a loan from a bank. If you have any questions about our experience, are interested in any of my books or online courses, or would like one-on-one coaching through the process, feel free to reach out to me at my website below. We also have a private Facebook group you are welcome to join, also linked below. I hope to see you there! http://slaverytosuccess.com https://www.facebook.com/groups/slavetosuccess 8

11. THANK YOU