How do the majority of stories start? There could be a myriad of motives, but the most popular is that the person is obsessed by the events and the number of funds accumulated in the accounts for funding in Startup Eco-System, or he/she is dissatisfied with the present solution to an issue and wishes to create a total disruption in the method or technology that can solve the issue.
The first step is to identify a problem or an idea (It’s more effective to identify the problem first before we consider the ways to address it in the best way previously). From there then, we start building an organization and create a solution or product. Our primary objective is to always create an improved product and improve it constantly based on feedback and experiences from customers.
We’re always mindful about the whole procedure of business, i.e. the product’s specifications, upgrades and extensions, launch and marketing locations, targeted customers, price competition, etc. However, shortly after our beta release, we began participating in a competition to be funded. Thus, our efforts begin becoming less focused on the creation of pitches and networking events, as well as shows and showcases for products.
We can see changes in our focus and priority, i.e. funding, funding, and only financing right now. Each time we encounter rejection, we are demotivated and uncertain of our plan. We lose our faith, and a sense of doubt begins to creep in. The sooner or later, we end up dying or begin thinking about a new business idea. Why? Simply because we have completely gotten off the path and are an unproven startup that stands on the stage merely to raise money.
We’ll start with the very first sentence in the 3rd paragraph in this blog post “We always think about the whole procedure of business, i.e. the product’s specifications enhancements, upgrades and launch and marketing locations, targeted customers, price competition etc.”(repeated phrase). Instead of sourcing money from outside sources and focusing our attention solely on the business process and we are able to finish having positive, positive outcomes.
There are numerous instances in which startups have proven themselves first without needing any outside funds. It was because they decided to begin by bootstrapping at first. This isn’t necessary for every startup in existence; however, it’s a good idea to do it. The process of launching your startup can have many benefits, and I’m trying to summarize some of these here.
1. Never Lose Focus When we’re self-funded.
We are aware of the value we have received in terms of funding and what we can do with it. We then create our process plan very effectively and economically. We plan to spend the bulk of our money on products or solutions as opposed to marketing. Better yet, we prefer marketing without cost.
We communicate with our customers and are therefore the first to address their issues by offering our solution. If we receive the same feedback from many customers, we take the suggestions for changes to bring efficiency to the entire process. Since we are able to spend less on office equipment, staff as well as sales and marketing so we are not under stress. When we are bootstrapping, we can observe that the idea we had was more effective has been transformed into a better solution due to the open and thoughtful brain, discussions with our team members, and in the process, suggestions from our clients.
2. Your Investment is Yours Control:
We do not reduce the stake in the exchange of funding; total control over the company is in our control. We can freely think about, what to do next, how to do next, and when to do next (upgrades/changes/pivoting). This is an essential element in the growth of your company. You might think that I’m wrong because all Investors aren’t the same. Some are in the position of asking founders to develop their business according to their own preferences and beliefs. You are aware that you’re using someone else’s money, and you will be a bit smug about it.
You’ll need to meet with your Investor on a regular basis and will be required to provide audit, business, and plan reports later. This is where you begin working on Excel sheets to make documents for the Investor instead of creating your product. Therefore, I recommend keeping complete control over your business until the point that it is genuinely needed.
3. Good Traction Recurring Customers, Good Traction and steady business growth
The reason we don’t have to spend hundreds of thousands on marketing and advertising, therefore, we know that we are not going to be bombarded with customers on a daily basis. If there is a customer base, most likely, we’ll be able to identify them by their names as well as phone numbers. If that’s the case, then you’re doing well. It indicates that you’ve developed an excellent relationship with your clients, and they’re sure to be loyal to you for a time.
In bootstrapping, we address the problem of the customer in two dimensions, i.e. professional and personal. That’s why they enjoy dealing with us, which leads to a return customer.
4. More Profitability and Higher Value
Companies that are bootstrapped have greater chances of being profitable in the beginning stages than startups that are funded in the early stages. This is likely due to the differences in the business plan, advertising budgets, as well as staffing to manage business demands and the accumulation of the entire “monthly cash burns”.
It’s also a fact, and I’m sure we all have heard this and a business that has already made money receives an increase in valuation when compared to the companies that aren’t even breaking even.
This post isn’t in opposition to being funded, but it’s a type of article about “How we can make things better in startups with bootstrapping?”. If you’re trying to bootstrap your business, you’ve had a glimpse of my blog. If you have then, please share this post with your acquaintances and give yourself a pat on the back at the very least.