7 Reasons to Bootstrap Your Business

Andy Charters
.
August 18, 2023
Tech News

First-time entrepreneurs often believe that they need millions of dollars to start their businesses. However, most businesses are actually self-funded from day one, often starting with as little as $10,000. The limited financial resources can pose difficulties for the founder and the team, but there are also benefits and perks that come along with it. In fact, we’ve seen bootstrapped startups rise to success over time—GoPro, Spanx, GitHub, Tough Mudder, and Craiglist, to name a few.

Starting a business through bootstrapping requires great dedication commitment, as well as efficient work ethics to bring the business to success. It’s a hard journey if you look at it, but it may prove to be fruitful in the end. If you’re an entrepreneur contemplating on bootstrapping your business, here are some reasons other entrepreneurs have chosen it over VCs:

#1: You (are pushed to) become good fast.

In normal environments or circumstances, we only naturally put as much effort as the situation requires. However, when bootstrapping, the times get tough and that’s what pushes founders to their limits. This leads them to discover other skills or talents that they did not know they previously have.

The challenge forces founders to get creative with their strategy and think of solutions that they have never tried before. In every day, there is a continuous need to be inventive, imaginative, and even experimental. Every moment requires determination and aggressiveness.

#2: You attract the right talent.

While you may not have enough money to attract big-time talent or those with a lot of experiences, but you do have the vision or the idea that can attract the right people—those who believe in your idea and are willing to bet on it.

Think of this: the people who are willing to join you are willing to turn down a secure and regular-paying job to work with you. Why? Because they believe there’s something brilliant in your idea. In the long run, you get a team of individuals who are willing to work with you every step of the way because they believe your idea can turn into a blockbuster, and they want to get it there too.

#3: You can focus on your business.

Not having an investor backing up the business may be a problem for some, but not having an investor is a joy for bootstrappers. It’s their freedom from more stress. Instead of spending lots of time preparing an investment pitch, polishing and revising it, bootstrappers get to save that precious time and use it instead to improve the business itself.

There’s also no added pressure of an investor boss looming around, criticising their every move. Bootstrappers then have the luxury and the peace of mind to focus on their business and building relationships with the customers.

#4: You will think very carefully about scarce resources.

Getting by with scarce resources will teach you how to value them and so much more. Catch My Party founder Jillian Tohber Leslie says that bootstrapping taught her to make the best of the limited resources they had—it made them figure out that they needed less than they think they need.

Scarcity is also a great teacher that trains entrepreneurs to be “good financial engineers,” as BitTitan founder Geeman Yip puts it. At the Impact Hub last 2016, Yip said:

“When it comes down to figuring out how your money works for you—whether it’s paying interest or making revenue—it’s very important, because every dollar counts.”

“You don’t take anything for granted. You really look at everything as your own money, because it is your own money. You’re constantly thinking, can I spend this dollar in a different way?”

#5: You are taught to invest time and money on things that are most critical.

In relation to Point #4, time and money are the most important resources for businessmen and entrepreneurs. When bootstrapping, you realise the need to work toward profit generation while acting promptly. There’s no time and especially money to waste, and so you learn to invest your time and money on only the most critical things—all your actions and decisions are made with the aim of making your business survive.

#6: You get a deep understanding of what works and what doesn’t.

In bootstrapping, you wear as many hats as you need to. During at least the first months, it’s your responsibility to fill in wherever there’s a gap. You’ll be hands-on in all of the processes as the founder.

This not only trains you to become well-rounded, but this also helps you understand which strategies work and which doesn’t. You have a first-hand idea of how your strategies are performing so you’ll know what changes to make, what new steps to take, how to do them, and when to do them. For a business to survive, having this skill will be really helpful.

#7: You build a strong product and you gain larger profit margins.

In a bootstrapped business, the end user is the only source of profit, and so naturally the entrepreneurs will strive to come up with products and/or services that will satisfy the end users. With the consumers in mind, entrepreneurs have the drive to build a quality product for them.

Bootstrapping also lets businesses stay lean as being low on funds lead to being low on overhead costs. When every spending is carefully evaluated and done, only the most essential expenses are made. In the end, this yields higher profit margins for the business.

The limited financial resources and the challenges in a bootstrapped setup may seem discouraging, but bootstrapping can also be an opportunity for entrepreneurs to follow what they want without having to conform to restrictions. There’s a lot of space for freedom and creativity--one that is not controlled by profit-seeking investors. You have full control of the direction where you want your business to go. The lean times may be rough, but bootstrapping makes you appreciate your business even more because of what you’ve invested in it.

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Fullstack Developer

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

We pride ourselves on being supportive and cutting-edge work that continuously invests in staff development, engagement and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Fullstack .NET Developer

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

We pride ourselves on being supportive and cutting-edge work that continuously invests in staff development, engagement and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Lead/Senior Frontend Developer (UI/UX) - Brazil

Cloud Employee is a UK-owned business established eight years ago. We connect high-performing software engineer talent worldwide with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines and Brazil as part of international engineering teams and grow their CV and skill-set.

We pride ourselves on being a supportive and cutting edge workplace that continuously invests in staff development, engagement, and well-being. We provide security, career paths, individual training programs, and mentoring.

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Marketing Specialists

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

We pride ourselves on being supportive and cutting-edge work that continuously invests in staff development, engagement and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Backend Developer (Python)

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

We pride ourselves on being supportive and cutting-edge work that continuously invests in staff development, engagement and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Senior Full-Stack PHP Developer

Cloud Employee is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineering teams and grow their CV and skill-set.

We pride ourselves on being a supportive and cutting-edge workplace that continuously invests in staff development, engagement, and well-being. We provide security, and career paths, along with individual training programs and mentoring.

POST DATE
January 2, 2024
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Remotely
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Full Time
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7 Reasons to Bootstrap Your Business

February 16, 2024

First-time entrepreneurs often believe that they need millions of dollars to start their businesses. However, most businesses are actually self-funded from day one, often starting with as little as $10,000. The limited financial resources can pose difficulties for the founder and the team, but there are also benefits and perks that come along with it. In fact, we’ve seen bootstrapped startups rise to success over time—GoPro, Spanx, GitHub, Tough Mudder, and Craiglist, to name a few.

Starting a business through bootstrapping requires great dedication commitment, as well as efficient work ethics to bring the business to success. It’s a hard journey if you look at it, but it may prove to be fruitful in the end. If you’re an entrepreneur contemplating on bootstrapping your business, here are some reasons other entrepreneurs have chosen it over VCs:

#1: You (are pushed to) become good fast.

In normal environments or circumstances, we only naturally put as much effort as the situation requires. However, when bootstrapping, the times get tough and that’s what pushes founders to their limits. This leads them to discover other skills or talents that they did not know they previously have.

The challenge forces founders to get creative with their strategy and think of solutions that they have never tried before. In every day, there is a continuous need to be inventive, imaginative, and even experimental. Every moment requires determination and aggressiveness.

#2: You attract the right talent.

While you may not have enough money to attract big-time talent or those with a lot of experiences, but you do have the vision or the idea that can attract the right people—those who believe in your idea and are willing to bet on it.

Think of this: the people who are willing to join you are willing to turn down a secure and regular-paying job to work with you. Why? Because they believe there’s something brilliant in your idea. In the long run, you get a team of individuals who are willing to work with you every step of the way because they believe your idea can turn into a blockbuster, and they want to get it there too.

#3: You can focus on your business.

Not having an investor backing up the business may be a problem for some, but not having an investor is a joy for bootstrappers. It’s their freedom from more stress. Instead of spending lots of time preparing an investment pitch, polishing and revising it, bootstrappers get to save that precious time and use it instead to improve the business itself.

There’s also no added pressure of an investor boss looming around, criticising their every move. Bootstrappers then have the luxury and the peace of mind to focus on their business and building relationships with the customers.

#4: You will think very carefully about scarce resources.

Getting by with scarce resources will teach you how to value them and so much more. Catch My Party founder Jillian Tohber Leslie says that bootstrapping taught her to make the best of the limited resources they had—it made them figure out that they needed less than they think they need.

Scarcity is also a great teacher that trains entrepreneurs to be “good financial engineers,” as BitTitan founder Geeman Yip puts it. At the Impact Hub last 2016, Yip said:

“When it comes down to figuring out how your money works for you—whether it’s paying interest or making revenue—it’s very important, because every dollar counts.”

“You don’t take anything for granted. You really look at everything as your own money, because it is your own money. You’re constantly thinking, can I spend this dollar in a different way?”

#5: You are taught to invest time and money on things that are most critical.

In relation to Point #4, time and money are the most important resources for businessmen and entrepreneurs. When bootstrapping, you realise the need to work toward profit generation while acting promptly. There’s no time and especially money to waste, and so you learn to invest your time and money on only the most critical things—all your actions and decisions are made with the aim of making your business survive.

#6: You get a deep understanding of what works and what doesn’t.

In bootstrapping, you wear as many hats as you need to. During at least the first months, it’s your responsibility to fill in wherever there’s a gap. You’ll be hands-on in all of the processes as the founder.

This not only trains you to become well-rounded, but this also helps you understand which strategies work and which doesn’t. You have a first-hand idea of how your strategies are performing so you’ll know what changes to make, what new steps to take, how to do them, and when to do them. For a business to survive, having this skill will be really helpful.

#7: You build a strong product and you gain larger profit margins.

In a bootstrapped business, the end user is the only source of profit, and so naturally the entrepreneurs will strive to come up with products and/or services that will satisfy the end users. With the consumers in mind, entrepreneurs have the drive to build a quality product for them.

Bootstrapping also lets businesses stay lean as being low on funds lead to being low on overhead costs. When every spending is carefully evaluated and done, only the most essential expenses are made. In the end, this yields higher profit margins for the business.

The limited financial resources and the challenges in a bootstrapped setup may seem discouraging, but bootstrapping can also be an opportunity for entrepreneurs to follow what they want without having to conform to restrictions. There’s a lot of space for freedom and creativity--one that is not controlled by profit-seeking investors. You have full control of the direction where you want your business to go. The lean times may be rough, but bootstrapping makes you appreciate your business even more because of what you’ve invested in it.

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