7 Advantages To Bootstrapping Your Business
Right now, the world is seeing a boom in small businesses bootstrapping their way to success. For those who don't know, “bootstrapping” is when you self-fund your entrepreneurial efforts - "pulling yourself up by your bootstraps," so to speak.
While using only the resources you already have to start your venture can be scary, it's often a rewarding process that teaches new business owners a lot about themselves. So if you’re currently debating how to get your brand off the ground, we hope you keep these advantages to bootstrapping your new business in mind.
1. You're the boss.
When you bootstrap, you get to own your company outright and make all the decisions yourself (or with your business partners, depending on the type of company). That much responsibility can feel two-sided since you also shoulder 100% of the burden of all your decisions. However, it usually makes your entrepreneurial experience much more rewarding.
2. You don't have any responsibility to investors.
Since you’re starting your business entirely with your own resources, you won't ever need to own up to any investors. That gives you more flexibility in creating business strategies and plans, along with the 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! You won’t have to deal with years-long debt repayment plans, meaning your profits will stick around once they come in. This is one of the best things about bootstrapping because when the rewards hit, you get to pay yourself first.
4. You can grow at a slow and steady pace and make mistakes on a smaller scale.
You might grow slower than you would with a substantial upfront investment, but the gradual pace allows you to waver on some aspects of your business and make smaller-scale mistakes. If you aren't on someone else's timeline, you can grow into your leadership role through trial and error. And when you do inevitably make a mistake (it happens to everyone more than once when they start out), you won't have to explain yourself to investors, making it easier to bounce back and learn from your missteps.
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 many business owners can’t spare. 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 you could otherwise spend marketing or working with clients. For every minute you spend 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 have to get creative. Starting a business on a small budget means that every dollar makes a much more significant difference, and you will spend a lot less freely if it’s your own money at stake. That craftiness is often an 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 while continuing to pinch pennies.
7. You get to run your business entirely focused on your customers, rather than your investors.
Without investors to worry about, you have the flexibility to cater exclusively to your core customer base and change along with them. And there's no better feeling than making customers happy!
With most small businesses, bootstrapping is not only possible but the less risky way to go. Getting funding for a business is a demanding process that takes a lot of time, and if you're running a small product or service-based business, it might not be a worthwhile use of those valuable startup hours.
