Why Every Entrepreneur Should Bootstrap At Least Once.
“Starting a company is like eating glass and staring into the abyss. If you feel like you are up for that, then start a company.” Elon Musk
Entrepreneurs belong to part of a select club. In terms of difficulty, some would rank being an entrepreneur right up there next to lion tamers, cliff jumpers, and chainsaw jugglers.
Bootstrapping a company from the ground up is even more difficult, requiring sacrifices that most people wouldn’t consider making. But I also believe that it’s through bootstrapping that entrepreneurs learn some of life’s most important business lessons—lessons that can’t be learned any other way.
Here are four valuable bootstrapping lessons that will set you up for entrepreneurial success.
- You learn to prioritize.
When money is tight and business is slow, you learn to make every dollar count.
“There’s no room to be loose with resources, with design, or with responsibilities in a bootstrapped company,” wrote Andrew Gazdecki. “As a result, a culture of discipline in many areas of the business tends to arise organically (otherwise, the company falls apart pretty quickly). So deadlines can’t be allowed to slide far, if at all, and every member of the team is held accountable for delivering their share.”
Prioritizing your resources also forces you to develop additional skill sets—because you don’t have the money to pay anyone else to do it. One of the business owners that I mentor explained it this way: “I pay employees by the hour to perform a variety of services. But if I misjudge the time it takes, then I finish the work myself to keep costs down for clients. This has forced me to become a better estimator, a better servicer provider, and a better business owner. I’ve also been forced to learn things outside of my original skill set, like accounting and software technology, to keep the business running smoothly at a low cost.”
Whether you are bootstrapping or have outside funding, prioritizing resources is something successful entrepreneurs never outgrow.
- You watch your cash flow like a hawk.
When every dollar is stretched to its limit, bootstrapping entrepreneurs learn to naturally watch their cash flow to keep their companies solvent and on-track.
Tim Berry, Founder of Pala Alto Software, described it well: “We spent our own money. We never spent money we didn’t have. We never got into debt on purpose, and we didn’t go looking for other people’s money until we didn’t need it.”
No business can afford to overlook unchecked spending and unmonitored expenses. Learning to monitor expenses from day one will set you up for profitability regardless of the stage of your business.
- You build your network to survive.
When you are relying on your own resources, it’s common—and usually necessary—to make deals and trades with other businesses. In my early startup days, my friend Adam Clark gave me a discounted rate on Salesforce. I could not have achieved access to that platform without the help of a trusted friend. In another situation, in the early days of PCCareSupport, we traded radio advertising in exchange for tech support, resulting in a large, business-saving contract.
When you have realized success, pay it forward by being approachable to other entrepreneurs in need of your knowledge or expertise.
- You never stop selling.
One of the advantages of bootstrapping a company is that you become very adept at sales. Bootstrapping requires you to sell your concept to investors, sell a service to your customers, and sell your vision to employees. Employees in the bootstrapping days are usually underpaid and overworked yet remain because you have sold them on believing in your company. It requires a constant belief in yourself and what you are trying to accomplish. That is a passion that shouldn’t subside when the need for bootstrapping ends.
Bootstrapping your startup isn’t for the soft or easily swayed. But it is a strategy that allows you to learn skills that are difficult to acquire in any other way. Learning to prioritize, track cash flow, network, and continuously sell create business standards that will carry you through the lean times into an enduring level of success.
Reference : https://www.linkedin.com/pulse/why-every-entrepreneur-should-bootstrap-least-once-ryan-westwood