Bootstrapping your business isn’t usually the first line of many unicorn fairytale stories.
When starting a business, many entrepreneurs believe there is fairytale to fulfil. Come up with great idea, start on your quest to find the elusive unicorn, discover a wide old investor who gives you the sack of gold you need to help you on your quest. You use the sack of gold to find the sacred unicorn, you find the unicorn and live happily ever after. Right?
Well, not always…
Over the last few years, there seems to be a myth around starting a business that the only way to grow a business is with investment. While investment for some companies may be the only way to grow a business, there is an alternative – bootstrapping. So why might bootstrapping your business be a better alternative to investment?
Bootstrapping your business means ownership
One of the benefits of bootstrapping your business is that you own everything. There’s no giving equity away, dealing with more than one voice and opinion – nada. There are a lot of investors out there, but when starting a business, many new founders fall into the trap of seeking money instead of smart money. Seeking out the wrong investor can mean that you have opinions you’ve never had to deal with before when running your business. Everyone takes to opinions differently so if you’re not open to criticism or new opinions, bootstrapping your business so that you can remain the sole decision maker might be the answer for how you want to run your business.
When you don’t have any one else’s opinion or cash to rely on, you have no choice but to go with your instincts and gut feeling when making decisions. Bootstrapping forces you to make your own decisions – fast! This is beneficial in the long-term as making your own decisions is essential in making the harder and bigger decisions that appear later as your business grows. Bootstrapping allows you to develop your mindset and your decision making becomes more intuitive than when you started out. The decisions or mistakes you make early on will soon become hard and fast lessons in not what to do again. The buck has to stop somewhere, and if you’re in charge, your instincts for making a good decision some come naturally to you.
Not having cash at your fingertips is part and parcel of bootstrapping your business. This means that you have to think differently and more creatively when you don’t have wads of cash to throw at your business. As an entrepreneur, you develop a more grounded sense of character, you are forced to think unconventionally and your nerve is tested to the limit. You may have times when you wonder if you will ever be able to pay next month’s bills, but it’s that fear factor that spurs you on and enables you to develop yourself as a strategic decision-maker. The description of an entrepreneur being someone who jumps off a cliff and builds a parachute on the way down springs to mind! Being in those low moments when you have no money to spend on marketing or staff, yet still surviving and keeping the business afloat shows entrepreneurial strength. However, bootstrapping your business means that rollercoaster journey can reap rewards. For every low moment, there is a high just around the corner and you learn to ride both with equal calmness. Bootstrapping your business means you can make the rollercoaster that little bit easier to ride with a strong character and cooler head.
If you are bootstrapping your business, this means you need a solid business model that works and that you don’t simply ride on an idea or a business that hasn’t had a single customer. The focus of a bootstrapped business is to make money as opposed to spending money, so every hard-earned pound you make is greatly cherished. You become smarter with how you spend your time and your money and soon learn from your mistakes if you don’t spend either wisely. Raising money can be a long process with no guarantee you will have any investor sign on the bottom line at the end of the process. Bootstrapping your business means you can focus on growing your business organically rather spending valuable time meeting potential investors.
One of the biggest benefits of bootstrapping your business means that you become a more focused entrepreneur. Taking the time to understand yourself as well as the business, focusing on why you are making that decision, or why you are spending money on that resource greatly enhances your entrepreneurial ability. You can develop your creativity without restrictions and run the business exactly how you want to run the business. Isn’t that what you set out to do when starting a business? You become less distracted, less wasteful and don’t take things for granted which, without a doubt, can make you a very successful entrepreneur leading a very successful business.