How bootstrapping helps your start-up

Most entrepreneurs today want to start-up by raising funds.

CHENNAI : Most entrepreneurs today want to start-up by raising funds. It has become an unsaid rule to measure a start-up’s success with the amount of funds it has raised. A lot of start-up blogs even cherish it and rank funded start-ups to hard-code that in your brains. But wait. No matter how much you read about funding being the only way to run a start-up, it’s wrong. The key way? It’s bootstrapping!

Bootstrapping, or in other words self-funding your business is the way most start-ups launch. If you have the necessary resources to execute your start-up plan and a capital pool that can sustain you from getting drained out, then nothing can be better than a bootstrapped start-up as you will enjoy complete creative and business freedom over your start-up. No taking approvals for making business calls or making start-up pivots. The go-to-market time is the shortest because once the founders decide, the next step is just executing it instead of convincing your board or investors. 

Another advantage is that bootstrapping helps you really taste what running a start-up means. As they say, once you are on investor money, you are on a treadmill. Here’s how to bootstrap. If you start as offering services for other businesses, you will be getting money in your start-up account to fund your product initiatives. If you want to be in product business, then enter with a product line that goes out of shelves faster. (This might take some market surveys and hit and try from your side).

The quicker the sales, the quicker you will get your cash back and the quicker you will be able to invest it in your business. Price the products in a way that you will start relishing profitability once you hit a certain achievable scale (For eg: 500 units a month run-rate).  We understand that by just selling few units you will never be able to recover the fixed costs and thus scale will be a key factor. 

But, hey! Let’s also discuss the cautions. Under-staffing is better than over-staffing. People sitting idle and goofing off on your bean-bags is the last thing you want as a bootstrapped startup. Let ‘hiring in advance for troubles’ be a corporate’s mantra, not yours. Do not waste resources on a bad hire. If in doubt, start with your hire as a freelancing project. If they perform good, then take them on-board. You might get unexpected hiccups and road-jams. Plan and keep aside some money to avoid these troubles. Keep evaluating feedbacks on your products, improve and launch the newer version. 
Happy Bootstrapping!     

If you have any queries, feel free to write to me on Rajeev@TBSPlanet.com

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