18 December 2017

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Be Your Own Guardian Angel

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There probably has never been a better time to start your own business. Opportunities, networking and acceptance are at an all-time high and so is the needed courage and motivation. If there’s one thing that puts a stopper to making this a reality, read finance. The see-saw between getting together a first, simple prototype and putting up enough to impress investors might well be the longest game you ever played. Why not make the struggle easier? Why not set up house in your own skin? Let’s go the bootstrapping way.

The essence of bootstrapping lies in being self-dependent in supporting your business; in other words, mastering the art of circulating cash within. Based on funding the entire set-up from your pocket, bootstrapping is a way to start small, while playing it big. Built on a strong foundation of smart planning and management, bootstrapping is a slow but steady path to establishment and growth.

Let’s take a look at few pointers!

How to bootstrap?

  • Set aside a certain amount at the start to put back in later, and reinvest profits.
  • Chart out a carefully laid financial plan, and stick to it as much as possible.
  • Check the market before you begin; analyse requirements, expectations and how much customers are willing to pay for your product. Do not shy away from marketing yourself.
  • Take the development in stages. Go in for methods that will give better results in quick time.
  • Keep your team limited, but make them feel rewarded by offering better roles or a share in the company stocks. Offering internships and outsourcing a part of the work can also be viable options.
  • Sharpen your skills to result in maximum efficiency.
  • One can convert your home into an office space, or consider sharing office space.

What does it have for you?

  • One thing many entrepreneur-aspirers struggle to follow is the financial aspect. While technically sound and good at management, some fall short when it comes to equity, shares and the like. A factor that strikes one about bootstrapping is the simplicity of the process. The idea is not complicated to understand.
  • You know you should plan and limit investing in something new if it eats into your bootstrap fund. On the other hand, the fund kept aside gives you a fixed input that you can always bank on.
  • With you and your company being your sole investors, your business is always within your control. Be it financial decisions, business ideas or marketing goals; you have the final say.
  • While a good amount of time is generally spent on getting in funds, you have the liberty of channelling the rest on your customers. Expand your reach, connect better with those in the know and put constructive feedback to good use.
  • One is not left hanging for someone else to release funds.
  • Over time, profits can be re-routed into the business, or even the bootstrap budget itself.
  • There is more space for experimentation in all forms. Starting on a limited budget string urges one to be extra careful, while also giving room for mistakes.
  • With time, one learns the art of better management. The future offers very good opportunities in terms of making a name and creating interest from big names.

What might not work

  • The first fact one has to acknowledge is straight forward – Bootstrapping is not easy.
  • Being on your own, the entrepreneur has to bear the brunt of financial risks and business decisions.
  • The very beginning involves investing a good amount of cash, not to mention time and efforts.
  • Progress in terms of returns might be slow as growth is measured.
  • Excessive credit might get one into an interest loop, while too much credit might result in undesirable longer contracts.
  • If the business venture fails, one is personally hit too. But the learning is huge. As they say, failure is the stepping stone to success.

There are many businesses that started out by bootstrapping – Facebook Inc, Microsoft Corporation, GoPro, GitHub, TechCrunch, to name a few. Many start-ups have succeeded with this approach today. Gives one some confidence, right? Bootstrapping needs the will to take risks and level headedness in any situation. Bootstrapping need not be forever, just long enough to make a firm beginning. After all, slow and steady wins the race!

 
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