Bootstrapping is a hot word in entrepreneurship today. More people are starting businesses with less than ever before. It’s a good thing for our economy and sometimes necessary with today’s lending and investor situations (that are constantly getting better, by the way).
One of the biggest issues I see with those who are bootstrapping a new business is a failure to look at their overall livelihood at the same time. After all, if you are able to make more and spend less in your life, doesn’t that give you more available funds for your business?
Anyone, whether bootstrapping or not, should really watch their personal spending when they have a new business. Just forget that new car, home upgrade, and expensive vacation until the business is running and profitable on a consistent basis. Then, reward yourself with these things you avoided during the startup phase.
Here are the top 3 reasons why bootstrapping your life is a better option than your business.
- Money Spent on Your Business Generates Returns – This seems obvious, and frankly, it is. But too many people forget it. When you spend money on your business, it helps to generate additional returns. Period. If you don’t think it will, you probably aren’t going in to the right business.
- You Will Need Professional Services – Don’t kid yourself to think you can do it all on your own. You will need professional services sooner rather than later. You’ll need a lawyer, an experienced consultant, a coach, a business plan, marketing assistance, etc. If you’ve saved for these expenses when you need them, you’ll be much better off by keeping your business moving forward.
- Bootstrapping Your Life Helps You Keep Your Money in the Business – Too many entrepreneurs start new businesses with very little money and then need to use those immediate profits to live on. Instead, reinvesting these profits in y our company, particularly in the early stages, provides you with a better opportunity for success.
