So you got that million dollar Business plan and all set to start your venture. The first thing that will come to your mind is how to manage the finances and run the show.
In this bandwagon of Investors, funding is latest buzz and trend. More than anything else it has become good PR strategy. As soon as any startup raises funds it comes in limelight and becomes the talk of the town. It takes a lot of efforts to attract Investors and get VC on the board.
But it doesn’t guarantee the success of any venture. It is not the ultimate solution or determinant of bright future of any venture. On the contrary, many firms which are bootstrapped has scaled up as an established firm. The most important thing for bootstrapping is ready availability of the funds.
The amount of money required should be as per the business financial planning. Though it may sound easier than done it is quite a task. One needs to be on a shoe-string budget for each and every expense begin with.
Why is Bootstrapping better than Funding?
- There is nothing called as Free lunch
Startups get lured to chase funding rather than analyzing whether they actually need it. Even if they get Investors or Venture Capitalists, their battle is not over. If someone is investing money they are surely looking out for returns.
As soon as the startup is funded, balls get shifted to Investors court. There’s added pressure by Investors to recover the funds as soon as possible. It may create unnecessary stress on any venture and they may lose focus.
At times, a founder may become a puppet in the hands of the venture capitalists or any investor. In other words, gears get shifted in investor’s hands. In some cases, founders may feel like working as an employee where employers are Investors.
- Decision Making & Leadership
If you plan to bootstrap your venture than you are your own boss in a real sense. One can strategize; brainstorm ways to earn more revenues with their own expertise. One can define the business goals; plan the milestones and benchmarks and set up the deadline. Last but not the least, you can take your own decisions and manage the operations under your leadership.
How to be successful through Bootstrapping?
- Analyze the capital requirement as per ROI.
One needs to have a proper financial planning about how much money they might need to ace the race of startups. If you plan to bootstrap, the biggest constraint can be the scarcity of funds. However; if you have a good pool of savings and some alternate active or passive source of income than you can manage things flawlessly. At the same time, the proper cost-benefit analysis to set up deadline for breakeven and revenue should be done.
- 5 rules of reaching your Breakeven faster
-> First rule of a startup is choosing the right product.
->Second rule is to keep in mind is that your product/service should solve some burning problems.
-> Third is to have a thorough knowledge of the product.
-> Fourth is the unique selling proposition which should be better than the competitors.
-> And fifth is that one should know their target audience and should also be able to make a connection with them which will assist in understanding the size of the market. Also, maximum revenue can be generated through such analysis.
- Define your Role and Get the Cofounders
An Entrepreneur can be a wearing many hats. But as the business expands, he must define his role. As one can be jack of all trades but master of none and furthermore it can affect the pace of the startup.
Every individual’s role should be based on their specialization and passion and same applies to the founding members of any startup. Getting cofounders can also be a smart move. They can not only share the expenses but can bring their expertise as well.
- Identify Competitors; Core Competency; Team & Solutions.
Before starting any venture one must identify competitors and research them well and define some tactics and strategy to gain some visibility among already existing competitors. Another important element of any business is to have some solutions to the problem. Unless you are able to provide your audience with better solutions than competitors, you may diminish gradually.
Additionally to scale-up, one must have a strong team.
- Have a right Marketing Strategy
In this competitive scenario, your marketing strategy should be robust. Whether you are in a B2B or B2C space, unless your marketing plan and budget are in place it will be difficult to get the desired visibility & positioning. One can use both traditional and digital tactics to reach to the end consumer.
Also Read: 10 WAYS TO BOOST YOUR NETWORKING SKILLS
Whether it is an online business or any other venture; Digital Marketing is inevitable. Setting proper goals with a marketing mix that can generate leads and help in getting conversions of customers can lead to faster breakeven and eventually better revenues & turnover in the future.
Bootstrapping can be successful if your strategy and leadership are effective. Becoming a brand is every startup’s dream. However, it may not always need the ladder of funding. There are many traditional businesses which have crossed that threshold without any support. A startup may choose to be bootstrapped or go for funding but it can only become a unicorn if there’s a clarity of vision with a competitive product.