5 ways to support yourself financially while bootstrapping an online business

Leighton Taylor | | 0 comments



Entrepreneurs are a different kind of people. They are never completely satisfied with the normal, acceptable lifestyle commonly called "successful" by the rest of society. This traditional "success" often includes a good job, a nice house with a 30-year mortgage, a couple of nice cars (on which it's considered OK to owe a lot of money), a few weeks of vacation every year from the job you don't really enjoy, etc.

If you're reading this blog, you're probably not content with that kind of success.

If you're like me, you'd never be completely happy working a 9-5 office job, no matter how much money you were making. There's an urge inside of us entrepreneurs, constantly driving us to be working on our own projects, daily pushing us to reach the next level of success (the self-made, independent, non-conformist kind of success).

The hangup is that we all have to pay the bills until we build up enough momentum with our entrepreneurial ventures to make a living. As bootstrappers, you and I are doing the tough job of providing for ourselves (and possibly our families) while also dedicating ourselves to the full-time occupation of building a business.

So what options do we boostrappers have if we want to build a business and bring home enough Tofurkey to feed ourselves and those who depend on us?

1. Become a freelancer

This is my personal strategy right now, and so far it’s worked out pretty well. Freelancing has enabled me to work from home, create my own schedule, and build my ecommerce business on the side at the same time.

Freelancing definitely isn’t for everyone, but if you have the right skills it’s a viable way of getting cash flowing relatively quickly, compared with some other business models.

Granted, if you decide to hang out your shingle while starting an online store, you’re essentially starting two businesses at once. How insane do you have to be to attempt that? Only mildly insane, apparently.

Skills required

Some skills are more suited to freelancing than others. In my opinion, you’ll have an easier time making a living as a freelancer if you are either a writer or a designer. Programmers can also freelance, of course, but in my experience programmers face steeper competition from overseas contractors than designers and writers do. I’ll talk more about that a few paragraphs down, but here is a list of skills that you might be able to make a living off of by freelancing:

  • Graphic design (logo design, web design, print design)
  • Writing (writing high-quality articles for blogs, SEO companies, website content, ebooks)
  • Programming
  • SEO (keyword research, publishing articles, building backlinks)
  • Administrative skills (become a virtual assistant at Zirtual)
  • Database administration
  • Customer service and support
  • And more...

How to do it

I can’t guarantee anything, but I’ll tell you what worked for me, step by step.

  1. I set up a WordPress website with a free theme. The site included the following pages: Home / About / Portfolio / Contact.
  2. I assembled a small portfolio (around 8-10 items) of graphic design work I’d previously done and placed them on the Portfolio page of my site.
  3. I created a profile on oDesk and began browsing for jobs requiring my skills.
  4. I started applying to jobs, introducing myself with something like the following cover letter:

“Hello Michael, I’m writing to express my interest in the website design job you recently posted on oDesk. I’m new to oDesk, but I have several years of experience with web design and am confident that you’d be more than satisfied with my work. I read your description of the project, and I’d be happy to discuss how we might work together on this dentist’s office website at your convenience over Skype or on the phone. I am available to start on this project immediately. I hope to hear from you soon.

Best regards,

Leighton Taylor”

Notes about the above cover letter:
  • I greeted the client by name whenever possible (the client’s name isn’t always obvious)
  • I explained why I didn’t have any feedback yet on oDesk (I’m new to oDesk) but assured them that I had some experience (so they know that I’m a professional, not a novice)
  • I made it clear that I had read the job description, unlike many of the contractors who apply to oDesk jobs who just do mass applications. If the client asked for answers to any specific questions, I made sure to answer them.

After submitting only 2 applications with a cover letter like the one above, I had my first freelance job on oDesk. Within a month I was working full time from home. I wasn’t making great money at first, but as I grew busier, I was able to gradually raise my hourly rate until I was making more than enough to live comfortably as the primary income provider for my family (consisting of my wife and I).

Hints:

  • Don’t try to compete on price. You’ll never beat the $4/hr guy on price alone. Instead, make it clear to your potential clients that you’re a native English speaker, so that communication with you will be easy. You may also point out (depending on what time zone you’re in) that you’re available during normal business hours. For some services like writing and design, many clients are willing to pay a premium for excellence and availability that’s more difficult to find overseas. You might have to lowball on price until you get some hours and feedback listed on your oDesk profile, but low price shouldn’t be your long-term primary selling point for your services.
  • As quickly as possible, find clients who will hire you long-term, and make arrangements to be paid for a certain number of hours per week. This will give you stability with your income, and eliminate the need to constantly be searching for new clients.
  • Don’t lose sight of your goal to build an ecommerce business. Stick to a tightly-budgeted lifestyle, and only freelance as much as you need to get by. Devote the rest of your time to your other business.

Pros

  • You build your own schedule (flexibility).
  • You are location-independent.
  • You can easily work more or less if higher income is needed or if you need more time for your other business.
  • It’s relatively easy to start making money quickly using oDesk or Elance.

Cons

  • You’re trading your time for money (labor-intensive).
  • Depending on how much income you need, you may find it difficult to have enough time to handle both freelancing and your ecommerce business. As I mentioned above, stick to a tight budget and only freelance as much as you have to, then devote the rest of your time to your business.

Resources

2. Save up a runway

A “runway” is another term for a “cash cushion” that you’ve saved up to live off of while starting your business. Think of it as the amount of time you have for your business to “take off” without you having to work a normal job.

I’ve met several highly-successful ecommerce entrepreneurs who lived on a tight budget while working a normal job and saving everything they could. Once they had enough cash to survive for a year or so, they quit their jobs and dove into their ecommerce businesses head-first.

This is a great option if you’re already far enough into a “regular” career that your income is fairly high and you are able to save a significant portion of your income.

Pros

  • Because you quit your job cold-turkey, you are highly motivated to succeed with your business.
  • Without a job to distract you, you can devote your full attention to your business

Cons

  • Because you quit your job cold-turkey, your money will run out at a definite point in the future unless you start making money with your business.

Be careful with this one--the decision to quit your job is a serious choice that must be carefully evaluated. It can be a powerful motivator to spur you on to success, but it’s not a decision to be made lightly.

3. Teach English overseas (no English or Education degree required)

I have personal experience with this option, and I highly recommend it as both a life experience and a way to fund your life while building a business.

My wife and I taught English in China for 2 years. We taught in a university, and we both worked about 20 hours per week. Our housing and travel expenses were provided, and the school paid us a comfortable salary. In other words, the only expenses we had were food, health insurance, and day-to-day expenses like clothing and toothpaste. The school that hired us even gave us a round-trip plane ticket back to the USA every year and about 2-3 months of paid vacation per year.

The qualifications for this job were simple: we had to have a bachelor’s degree (in anything) and be native English speakers. That’s it--no English degree and no education training required. Our university provided us with a curriculum that made lesson-planning a piece of cake.

Working 20 hours per week gave me plenty of extra time to work on my business, travel, explore the city we were living in, read, and do pretty much whatever my wife and I felt like doing. Since our housing and travel expenses were paid, we were also able to save a large portion of our income.

Teaching overseas is a fantastic option for people of any age and any life situation. We had friends also teaching in China who were recent college grads, middle-aged couples who needed a break from their careers, families with young children, and retired people who were done with their careers and were using teaching abroad as a means to travel the world and stay occupied.

Interested?

If this sounds interesting to you, I’d recommend checking out Dave’s ESL Cafe and searching for other ESL teaching opportunities online. Some organizations will try to charge you a bunch of money to connect you with a school to teach at, but you don’t really need to pay them if you find and contact the schools directly. Look for ESL job boards like Dave’s ESL Cafe, and look for American/Canadian universities that have partnerships with schools abroad (who recruit American/Canadian/European/Australian teachers to work in their overseas programs).

Pros

  • You’ll get to experience world travel while simultaneously building a business
  • Steady source of income while building your business
  • You’ll probably be able to work part-time and have your housing paid for, on top of a comfortable income (this depends on which country you teach in, among other factors).

Cons

  • Internet access can be sketchy, depending on where you’re located. In China, I sometimes had to find ways around the Great Firewall, which blocked me out of most social media sites and many blogs (a free VPN was my lifesaver).
  • Taking care of boring business details like opening a bank account in the country where your business is based can be difficult or impossible while overseas. I’d definitely recommend knocking out as much of this as possible before you leave the country.

Note: If you have a spouse or partner who is willing to do this with you, you might even be able to work out an arrangement where your partner teaches abroad, and you go along for the ride and work on your business. Our school in China paid us enough that we could have lived on the salary of one person, and our housing was provided. This type of arrangement would give you even more time to work on your business without worrying about living expenses.

Resources

4. Work part-time and live on the cheap

If teaching overseas isn’t appealing to you, you could also try working a part-time job while living on a tight budget, dedicating your spare time to your business. I have done this before, and I found it to be more difficult than I thought it would be.

With my daily schedule and mindset built around a normal (albeit part-time) employee job, I found it difficult to transition into entrepreneur mode and focus on my own business in my spare time. Plus, unless you’ve already climbed the ladder enough to make a decent income and then convinced your boss to let you work part-time, most part-time jobs don’t pay that well. A part-time job at Applebee’s may take so much time to support you that you have no time left for entrepreneurship.

If you decide to go this route, you’ll probably want to create a meticulous Dave Ramsey-style budget to live by for the time being. Unless, of course, you’re able to simply scale back your normal job and keep making a decent chunk of change to fund your entrepreneurial endeavors.

Pros

  • You’ll have a steady source of income while building your business

Cons

  • An employer/employee situation can make it difficult to switch to your entrepreneurial mindset when you get home from work.
  • A job will keep you busy and distract you from your business.
  • You won’t have control over your schedule.

Resources

5. Work full-time and build your business on the side

This is my least favorite option, since it provides you the least amount of free time and the least control over your schedule. It can be done, however, if you have the discipline and stamina to wake up early and/or stay up late to dedicate significant portions of time to your baby business.

You’ll almost definitely face the same challenges I noted in #4 above--those being the difficulty of switching between employee and entrepreneur mindsets every day, being kept busy with your “real” job, and having no control over your schedule.

Pros

  • A full-time, steady income will come streaming into your bank account while you build your business.

Cons

  • You’ll have very little time to work on your business
  • You’ll have very little control over your schedule
  • You may find it difficult to constantly switch from the “employee” mindset to the “entrepreneur” mindset.

Variations on the Strategies

Maybe none of the above solutions fits you perfectly. You may find that the best solution for you is a mixture of methods, or a modified version.

For example, maybe you’ll find that your method of choice is to save up some runway (#2), and then work part-time (#4) while working on your business.

Or, perhaps you’ll become a freelancer and then take advantage of the low cost of living overseas. I’m doing this, by the way--my wife and I are going to move abroad in January to a country with a low cost of living, where I’ll be able to continue freelancing and work on my ecommerce business. The low cost of living will allow me to work fewer hours, thus giving me more time to work on my business.

What’s working for you?

If you’re in the middle of building your own online business, I’d love to hear how you’re doing it and supporting yourself. Are you freelancing, operating on a runway, teaching abroad, working a regular job, or making it with some other strategy?

Thanks to those who contributed:

I asked some of my friends and subscribers on my email list for input on these ideas. I'm grateful to those of you who told me about your experiences with supporting yourself while building a business. Here are the people who contributed with their thoughts:

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