Why bootstrapping is so damned sweet
Photo courtesy of iStockphoto, Kateryna Govorushchenko
O.K., so there are reasons every entrepreneur might be intimidated by the bootstrapping approach.
I've committed to bootstrapping the startup of my own blog network PostRanger.com (a network, by the way, that should soon offer a great value for sponsored posts unparalled on the Net so stay tuned.)
So what is it that I and others think is so great about starting a business with little or no money?
Here are some of the main reasons:
• Low or minimum risk. Bootstrapping guru Greg Gianforte argues one of the best things about bootstrapping is the ability to start up with as little or as much as you feel comfortable risking. Forget all that 'you need money to make money" crap. If you have a product or service you can trade for cash, there's no reason to mortgage the house.
• Ability to start immediately. As in today. No waiting to find investors who share your vision. No waiting for completion of a complex business plan. (More on both of these later.) No waiting for that rich uncle of yours to die. If you've got a product, start selling it. If you haven't developed one yet, try consulting to pay the bills.
• No need to wait on investors. Folks with money may have their own ideas about how your business should be run and may insist on your following their suggestions in return for taking their money…whether those suggestions are right or not.
• No need for extensive planning. Business plans can be a great way of putting your thoughts in order, but in the end there's no way of telling how customers will react to your product or service. Spending weeks or months painstakingly creating a business plan including projections of revenue and expenses for a business that is not yet operating may be an exercise in futility.
• No excuses. Finally, bootstrapping is a great way to start a business because no better method exists for determining whether a business model is workable or not. Since bootstrappers must rely on revenue to launch and grow their ventures, entrepreneurs can have little doubt about the reasons for a business's failure. Without the cushion of outside investment, bootstrappers cannot deceive themselves about the viability of a venture.
Bootstrapping puts the emphasis squarely on revenue and a workable business model, the real world elements that make a successful business and eliminate waste and speculation.
Like to suggest another benefit of the bootstrapping technique? Do so below in the comment section.