In order to further delve into the details about the same, we need to know what exactly bootstrapping is. For the unversed, bootstrapping is one of the techniques used by many entrepreneurs for starting or growing their organization. It refers to a process in which there is the use of only existing resources including personal equipment, saving, office space, etc. in order to run the business. This is a completely different strategy of growing business instead of seeking debt or help from investors for proving capital. Now the question that arises here is whether bootstrapping is a good decision on the part of entrepreneurs or not.
Well, whenever we aim at starting or growing our business, the main focus in actually on the funds. Now, it is totally the entrepreneur’s decision whether s/he wants to seek help from venture funds to raise the capital or adopt the technique of bootstrapping. But whatever decision is taken will surely influence the company one way or the other. Numerous entrepreneurs and intellectuals around the world consider bootstrapping to be the best option for raising funds. According to many of them, it helps people to become stronger and better entrepreneurs. So why is it that people are in favor of the process of bootstrapping? Let us find out:
- The first and the most important reason is that bootstrapping provides a kind of freedom to the entrepreneurs whenever they begin with any new project or expand the company. This is because whatever they are doing will be done with the help of their own funds. It not only makes them creative enough but also helps them to have full control over their business.
- Most of the times, entrepreneurs who adopt bootstrapping techniques, begin with small funds. This helps them to make careful assumptions so that they do not make any single mistake. And even if some mistake is done, their impact won’t be much on the company and can be rectified easily.
- As it has been mentioned in the previous point, bootstrapping involves small funds. As a result of this, the entrepreneurs are able to focus more on the products and services of the company. They also start paying heed to the needs and requirements of the customers or clients. All of this will finally help in building up a great brand and generate more revenue.
- Bootstrapping will make you the one and only shareholder of your company. So, whatever profit or success comes by, it will be solely bestowed upon you. Thus, you will be able to regain equity and control over the business without any hassle.
- When entrepreneurs raise funds through venture capital, they tend to become extra cautious when it comes to spending the money. But when it comes to bootstrapping, they do not have to worry much and can intelligently grow their business according to their own will. This will also help them to become a better manager.
- Many studies have revealed that the entrepreneurs who adopt the technique of bootstrapping are able to witness faster progress in their business. It actually motivates the entrepreneur to build a well – efficient product and roll it out in the market.
- The best part about bootstrapping is that there will be no outside influence on the business as well as the company. The entrepreneurs can run it according to their own free will and whatever decision they take is considered to be an ultimatum by everyone.