Understanding The Value of Bootstrapping

Ok, so you’re bursting with ideas and don’t know which one to pursue or even where to begin? Soon you’ve decided on a project and start calculating all the things you’ll need to get started. You’re looking at systems, software, hardware, outsource support, possible premises, staff and all the rest. Now let’s have a fun thought experiment and follow your stream of conscious trajectory.

“The costs… ahh well the costs… will be 60-80k to get started but heh once we’re rolling I can project 30-40k per month coming through… less fixed and estimated variable costs… and our little project will be able to pay back our initial  outlay within the first year and bam we’re cooking in year 2.”

Ahh!!! But wait a minute how much does it cost for us to live in the same style our family’s living now? Ok let’s add it up, we need a minimum of 4500 to 5000 monthly just to stay afloat. Also, I should be saving more for my children’s education not forgetting to remember we should be putting more away more for our retirement… but with my new business idea, I’ll be able to put a fat stack away in year 4-5. We might even get bought by a large predatory competitor as our service will be so unique with tremendous added value and specialist knowledge that it’ll take a couple of years for them to start to compete effectively anyway… that is unless they’re successful at poaching my business partner? 

But Nah… that could never happen, we’ve known each other a long time and we’ve worked together on some pretty demanding projects along our collegial path. I can’t see this happening unless?…Well, she does have small kids and has been talking a lot recently about all her current travel demands and she did say last time we had a drink after work about wanting more work-life balance… But with this new idea, I’m sure she’ll get totally focused like last time and go crazy on the thrill of grabbing new business and spearheading new markets.

So 30k each and we’re off, right! Well, that’s certainly one way of Looking at it. Might there be another view I can look at which would allow me to get started on this new idea and feel less demanding financially? Maybe there’s a way I could test out the market and my business partner’s motivations and commitment at the same time without all the added costs?

What could that be? Hmmm, how could I possibly start this awesome project without all the funding my initial estimates showed? What’s the magic question? What am I missing?

Let me think about this differently. What if I had didn’t have access to 60k? What if all I had was my energy and human capital? what if…

All I had to work with was what I’ve got now minus the 60k? How could I still get started and play this thing out?

Well, I could work from home, look for ways to create my own customer service systems with free online tools, apps. I can use google docs or excel and free social media collaborative tools. I can contact all my friends and colleagues to ask them for ideas and /or support either directly or maybe through someone in their networks.

I could do most of the work myself in the early stages and find out how efficient I can make the necessary tasks and record this process in detail as if I’m creating a franchise system.  I can set a goal to have my product/ service ready in 6 weeks for Market tests and then bring my business partner on. Perhaps she can hit up her contact list too? and I’ll ask her to make sure she closely documents her trial and error process while she works her business development magic getting our first customers. She could create a marketing and sales template which we can use to provide to new sales staff once we’ve perfected our client acquisition strategy.

We could save our first proceeds to build our cash flow and savings for future expansion and investment. 

Now I can start to envision how relaxed I feel. I can see that I’m loving life. I’m completely focused on my work and connecting and feeling alive and thankful for my wonderful stress-free existence without excessive overhead costs which often makes entrepreneurs feel trapped into taking on clients for the sake of the revenue and not for the thrill of working with fun and interesting people. Or feeling forced to dumb down their product and service to attract the mass market.

Not us, We’re now making positive and exciting decisions. Our firm is growing on our own terms and we’re feeling free and having a blast because we chose the smart alternative to building our new service/and or product.

We know we are providing massive value to our chosen customers and they are referring us to their trusted partners. We’re becoming known in the marketplace for our unique value. We are working because we WANT TO not because we HAVE TO and because we love what we do we can feel that our customers and client’s feel the love too.  

Our bank account is growing more than it’s shrinking. We are very happy and proud to see that we are running an efficient and profitable company. We no longer feel that we have to take on difficult clients or problem causing customers just to fill up our company coffers every month only to be dismayed at how quickly it’s emptied from excessive costs by the end of each month. ” 😀 END OF THOUGHT EXPERIMENT!


Dominic Kotarski is the author of international best-seller “The Making”. He writes, speaks, inspires, motivates and teaches on the most important aspects of your business including Sales, Coaching, Team-Building, People Management and Business Development. Get weekly access to his blog & training videos FREE by subscribing HERE! and when you sign up you will get Instant Access to his Sales Skills Training Video.


 




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