7 Advantages To Bootstrapping Your Business
Right now the world is seeing a major boom in small businesses that are bootstrapping their way to success. For those that don't know, bootstrapping is when you are self-funding your entrepreneurial efforts - "pulling yourself up by your bootstraps" so to speak.
While using only the money and resources you already have to start your venture can be scary, it's often one of the most rewarding processes and teaches new business owners a lot. Next time you're having the "to bootstrap or not to bootstrap" debate, we hope you keep these advantages to bootstrapping your new business in mind.
1. You're the BOSS.
You get to own your company outright and make all the decisions yourself (or with your business partners depending on the type of company). When you bootstrap, this can be two-sided in that you feel the burden of all your decisions as well, but it usually ends up making your entrepreneurial experience that much more rewarding.
2. You don't have responsibility to investors.
You won't have to own up to any investors. This gives you more flexibility in creating your business strategies and plans, and the feeling of freedom that comes with nobody looking over your shoulder.
3. There's no debt to pay off in the future.
Your business will be 100% debt free! No long-term plans for paying off debt will be needed and when you come into profit, it'll stick around! This is definitely one of the best things about bootstrapping because when the rewards hit, you'll be the first to notice and reap the benefits. You get to pay yourself first!
4. You can grow at a slow, steady pace and make mistakes on a smaller scale.
Without investor funding growth might be slower, but it gives you the chance to waver on some aspects of your business, or to make smaller scale mistakes. If you aren't on someone else's timeline you are free to grow into your leadership role through trial and error. Also, when you do inevitably screw up (it happens to EVERYONE more than once when they start out) you won't have to explain it to those investors, and it'll be easier to bounce back and learn from it. Basically, you're less likely to make a six figure mistake.
5. You don't have to spend your time searching for funding.
Not only does raising capital add some stress to your growth, but it also takes A LOT of time. From creating and giving presentations to going through the negotiations to sell a portion of stock, there is a lot of time you will use up that could be otherwise spent working on client work or marketing. For every minute you spent seeking funding, you could have also been selling and raising money to keep bootstrapping.
6. You will be more cautious with your spending, and know how to make your money count.
When money is scarce, you'll get creative. Starting a business on a smaller budget means that every dollar makes a much bigger difference, and you will spend them a lot less freely if they are your own dollars (not to mention few and far between). This craftiness is often a major advantage once business picks up because you know how to get things done in the most cost-effective manner and can stay afloat longer or grow faster by continuing to pinch pennies.
7. You get to run your business entirely focused on your customers, rather than your investors.
You get to focus on the people that really matter 100% of the time and adjust to do what they, your customers, want. If there are no investors, you have the flexibility to cater exclusively to your core customer base and change along with them, and there's no greater feeling than making customers REALLY happy!
With a lot of small businesses, bootstrapping is not only possible, but the less risky way to go. Getting funding for a business is an extremely difficult process that takes a lot of time, and if you're running a small product or service-based business it might not be the right use of those valuable startup hours.
Are you currently bootstrapping your business or have you bootstrapped a business in the past? Share your thoughts and stories in the comments below! We can't wait to hear about your experience!