Starting your own business can be a very exciting time, but it can also be very expensive. It doesn’t matter whether you’re starting your own app, opening your own store, or even becoming an influencer; you need some sort of capital or investment to get you started. As the old saying goes, you need to spend money to make money.
However, not everyone will have investors or capital to start with, and businesses that start with next-to-no money or their own personal finances as their own investments are known as bootstrapping. In today’s guide, we will explore what bootstrapping is and its role within the business world.
What is Bootstrapping?
Usually, a bootstrapper is someone who starts and launches a business with little to no investment aside from their own money (usually not considered high value) nor outside support. The term is all about the process of starting up a business, similar to ‘booting’ up a computer and its operating system when you turn it on, which is where it gets its name.
If you want to bootstrap your own business, you’re going to face challenges because it’s hard to make a product and get yourself out there into the public eye without any resources. It’s a bit of a slog, hence the other origin of the term, which means to pull up one’s bootstraps before heading out on a long and difficult journey.
However, there are certainly benefits to starting a business in this way. For one, you don’t have to worry about the opinions and beliefs of your investors because there aren’t any. You have full control over your business and can take it in any direction you want without the say of anyone else. This can be a very positive thing if you have a very clear direction in your head of where you want your business to go.
This doesn’t mean you can’t invest your own money as well, however. The median start-up funds for most businesses sit around the $10,000 mark, which most people usually save up as personal finances. They aren’t typically started with loans or credit.
As reminded by Businesstrex, there are also extra challenges along the way.
It’s estimated that around 90% of startups will fail within their first year as they fail to get off the ground, and if you’re running on limited resources, then this is only increasing your chances of failure. But, not all is lost, and there are plenty of bootstrap businesses out there that have found huge success with their ventures.
Some of the top bootstrap companies in the world include the likes of Spanx, the Tough Mudder racing events, and Electronic Data Systems, a company that was later sold to General Motors for $2.5 billion.
If you’re extremely passionate about starting your business and you’re determined to make it work, then going in as a bootstrap business is certainly an option for you to think about. However, it requires a lot of planning, and you need to ensure you’re a headstrong kind of person that will be able to stand up to the challenges you’ll face and can figure out grounded ways to move forward.