Big On Ideas Yet Short On Cash? Bootstrapping Is Way To Go For Entrepreneurs
Bootstrapping, in business terms, may be defined as when the founders of the company utilize their own earnings, investments and personal savings to finance their businesses.
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The dizzying heights of super successful startups are surely a source of awe to many a budding entrepreneur and fresh beginners alike. There are those who look at the movers and the shakers of the business world with a feeling that the prime neighbourhood is always out of bounds. Then there are those rare few, who dare to dream beyond the everyday routines and conventions.
It takes a ‘never say die’ attitude and the right mix of passion and smartness to conquer the market at your own terms and resources. Not every business while starting out has the premium connections, neither the backing of investors nor the vast piles of inherited capital. Only a handful of businesses manage to carve a lasting legacy. For the majority of businesses, bootstrapping is the only possible way forward.
Bootstrapping, in business terms, may be defined as when the founders of the company utilize their own earnings, investments and personal savings to finance their businesses. This model is entirely different from the funded one, where investors finance a company to obtain a stake in its equity. By bootstrapping businesses, one removes all unwanted external influences and is free to direct its resources and energy towards building long-term partnerships with the business enterprises of one’s choice.
This brings in an environment of freedom and fearlessness, which are extremely essential for any business to succeed. The bootstrapping model is independent of the tensions and conflicts that may arise between the founding entrepreneur(s) and the stakeholders in the funding model.
Now, bootstrapping a business in its heydays all on one’s own is a herculean task in itself. The majority of those starting out perish, and only a few are able to achieve what they originally set out to do. So, how can an enterprise depend on nothing but itself and its pre-existing cash flow and yet make a name in an unforgiving business world, where most that begin to end up faltering and failing? Here are some tips from the top self-made and self-funded disruptors and conquerors of the business world:
Take daily action and be mistake-ready
One should ensure daily action irrespective of their magnitude, as even the smallest of earnings are nothing but cogs essential to the grand design of one’s dreams. Rather than over-analyzing your future probabilities, it is better to sweat your soul out in the present. Working hard when it is the hardest is the revered key, the Holy Grail to success, and the entrepreneur must lead by example.
Passion at its source
Unless one has a penchant for it and is super passionate about their core business activities, it is impossible to realize a bootstrapped vision. In other words, one must have a drive and undying belief in their work otherwise, the market forces will sooner or later employ its ever so fatal submission manoeuvres and will indeed force you to tap out, within halfway of the bout. Unless your faith is stronger than your fears, you will see yourself quit in no time.
Say yes to no
You have to use the hardest methods and the longer cuts when you’re running on your own. Do not shy away from mundane, routine functions such as making the calls, creating connections and customer contact. Be prepared for negative feedback on your startup vision as for every score of refusals, you may get that elusive ‘yes'. That elusive affirmation should be the sole focus of one’s efforts and concentration. Do not be dismayed when you see doors getting shut at your face. Get used to it and find solace in knowing that every dark cloud beholds a silver lining.
Firstly, be wary of taking money from external agents and forces and secondly, if you have trouble deciding where to utilize it, just steer clear of the borrowing trail. It is an unwritten maxim that hangs true overall material spheres, that it is extremely undesirable and unpleasant at the same time if you find yourself owing money to others, be it friends, family, relatives or stakeholders.
It is best and prudent to make it and break it at your own capital, at your past savings and present income alone. One has to strategize and assess every cost, every detail and every hiring and then pave the way forward.
A company owner is known by the company they keep
For a business to succeed in real-time, it must first be truly realized in the mind and consciousness of the entrepreneur. As the mental state of any individual gets affected and moulded by the company they keep, it is absolutely pertinent for a business owner to be wary of the pessimistic and dreary lot. Entrepreneurs, in order to preserve their enterprising spirits, should surround themselves with successful and emulation worthy individuals who can act as mentors on one’s journey towards success...
Optimizing and multitasking
In the initial period, one has to adorn a multitude of hats and dabble in all business-related avenues and operations. From sales to customer service, managing inventory, manufacturing designing, accounting etc. every function shall require your immediate presence and supervision. Multitasking helps to save the costs otherwise allocate third party expert services for recruitment. This is the maxim for new beginnings; forget hiring and know that it’s got to be tiring.
Be unique and stand out
Identify your niche and then allocate all your energies and efforts in developing and materializing it. As the renowned marketing guru Seth Godin himself concludes in his bestselling book, ‘The Purple Cow’, that for a business to succeed, to be remarkable in what you do is the way to go, rather than senseless marketing and exhaustive marketeering. Through the hard method of endless trials and errors, one eventually reaches that point of triumphant equilibrium. When all the bits and pieces fall in their right places, one is guaranteed a unique spot in the business world. This cements your position as both outstanding and irreplaceable in your specialized field.
Enjoy the journey to reach your destination
Lastly, though it is important to go about your business while pulling all stops, make sure you have fun while doing it. Unless you derive a sense of pleasure and satisfaction from your business, it is very difficult for your company to stay relevant in the long run. When the founding few and the whole of the workforce truly enjoy themselves, even if it means going the extra mile, businesses flourish.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.