A common step in starting a business or taking it to the next level involves getting cash injections from external funders.
In exchange, these stakeholders often receive shares in the company, allowing them some say in the direction the organisation goes. Have enough stakeholders, and you may get any number of voices telling you to go in every direction.
Some of us may be familiar with a reality TV show called ‘Shark Tank’. Entrepreneurs must pitch their business ideas to a panel of potential investors. Convince them your idea will make money, and negotiations begin. Calling the interactions ‘negotiations’ is putting it rather politely
Founder of Open Minds and TEDx Speaker Jan Wong recently sat down with the Beyond 99 team to discuss the benefits of bootstrapping in business.
For those unfamiliar with the term, Investopedia defines bootstrapping as:
Building a company from the ground up with nothing but personal savings, and with luck, the cash coming in from the first sales. A bootstrap is a business with little or no outside cash or other support launches.
So, why might you want to pull up your bootstraps and fly solo on your next business venture?
A bootstrap forces you to spend effectively
If you are given millions of dollars to work with, everything becomes affordable simultaneously. With no real threat of opportunity cost, you may make unwise decisions on how to invest your funds. These unwise decisions are not fully reflected because there is such a thick pad of cash to absorb the impact.
When you are on a bootstrap budget, every expenditure is scrutinised to ensure it is necessary. When the budget only allows for one of two necessary expenditures (oh, there will come a time) you as the business owner must decide which is more necessary. You will take penny-pinching to the next level.
Take care of the pennies, and the pounds will take care of themselves.
Khushboo Nangalia is a TEDx speaker, award-winning marketer, entrepreneur, and talk show host. She is also the founder and CEO of global digital & creative agency Beyond 99, Through her LinkedInpreneur series, Khushboo and her team aim to connect and tell the stories of innovative entrepreneurs from across Asia. To connect with Khushboo, head to LinkedPreneur.
Khushboo is an entrepreneur, award-winning marketer, and founder of BEYOND99, a global digital growth agency based out of Malaysia. Khushboo believes in paying it forward to inspire future leaders and rise by lifting others.