Starting A Business : Bootstrap Start-Up

I started my IT consulting business 2 years ago. November 1st, 2007 to be exact. At that time I had very little savings so this business is basically a bootstrap start-up enterprise. This is ok because since I am providing a service and don't have to produce products on a daily basis, I don't need that much. This is perfect for me since I can work out of my home, I don't have to rent an office, pay for office utilities, and spend money to travel to and from the office. The living room became my office, the coffee table became my desk, and the sofa and chair became my cupboard and drawer.

Basically, the only business spending that I did was the land line (RM32) and internet connections (RM88). I also invested (RM3,000) into an aquaculture business. So for the first fiscal year my expenditure was (RM4,440). Now during that first year, I did 5 projects that generated (RM3,000) each and 4 projects that generated (RM4,000) each. Totaling all of them up gives me a first fiscal year revenue of (RM31,000).

All this means that at the end of the first fiscal year on 31 October 2008, I made a profit of (RM26,560). It may seem a lot, but break it down to monthly and I am only getting (RM2,213) per month. After paying for groceries, cable tv, petrol/fuel/gas, utilities, etc. all I am left is (RM200) to spend for fun.

For the second year starting in 1 November 2008, I setup a couple of website which cost (RM800). I also invested another (RM3,000) into the aquaculture business I started the year earlier. so my total expenditure was the same at (RM5,240). This year, I did 4 projects that generated (RM3,500) each and 6 projects that generated (RM4,000) each. This gives me a second year fiscal revenue of (RM38,000).

With second year ending 31 October 2009 profit of (RM32,760) which broken down monthly into (RM2,730), things seems to be getting a little bit better. I have accumulated (RM4,000) in savings around this time, but due to unforeseen circumstances I spent it all, and still owe my credit card (RM5,000) on top of it.

Third year... well, we will see. So there you have it. It's not glamorous, it isn't fun, it is a lot of work, but it is a damn dirt cheap of running a business. One thing though, this model of doing business does not apply to all types of business. I made the mistake of trying to apply this method to my aquaculture business. It was a disaster. Check out "Starting A Business : Providing Goods vs Providing Services" for a post mortem of both my start up business.