This June 2019, I am into the third year since I go all out to bootstrap a business.
For three years, my small business only relies on one principal vendor. The business model is simple. I find out the needs of my clients, set-up a technical discussion and provide a solution to their processing needs.
My principal vendor will supply me the ingredients and additives that cater to the solution. Apart from providing technical consultation, I am also the salesperson, debt collector and the delivery man.
The truth is, not everyone who starts a business like to do it this way. It was exactly for the opposing views, I had an argument with a dear friend. Well, she was adamant that I am doing it all wrong. Forget about explaining because I have decided that how I run my business is none of her damn business.
Therefore at this point, is bootstrapping a business your cup of tea?
IF YOU AIN’T A BIG SPENDER
I heard this encouragement from a friend, who bought up a small manufacturing arm a year earlier than my own startup. “Robin, if you could bear earning a smaller salary than what you are getting now, you should start one on your own.”
In case you don’t know what bootstrap business means, it means you finance your own business without the help of external fundings. Therefore, our main task as a bootstrap entrepreneur is to generate sufficient profit the earliest possible to finance the monthly operating expenses.
Imagine yourself in the predicament of a bootstrap startup. Firstly, you don’t know how long it will take your team to break even. How long can you survive your bootstrap’s cash burn rate?
YOU ENJOY THE PEACE OF ORGANIC GROWTH
Most if not all who builds a startup loves seeing their business grow. In fact, growth is the ultimate emotional catalyst for business owners to keep their fire going despite all odds stacked against them.
But here comes the question. Do you have the stomach for excessive expansion if the lucky genie indeed grants you this wish? Recently, a new vendor has offered to support me with a new series of food ingredient called the hydrocolloids. In layman’s term, this awesome ingredient that caters to most of the world’s food system like beverages, candies, sauces, soup, etc.
If I follow the CEO of the new vendor advice to scale the use of hydrocolloids into the bakery network nationwide, my bootstrap philosophy will not make the cut. I might need to recruit a small team of experienced sales personnel to hit the market with the new ingredient.
My business will need funds to build a new sales support team with technical cum sales personnel, warehouse, and delivery infrastructures. On the other hand, I could continue with the bootstrap way, by penetrating into other food industries in my region.
Business partners especially vendors may sometimes get impatient with bootstrap business owners. They want everything to be fast, and yet, it is sometimes our own nature that we want things slower.
We can’t let our suppliers dictate the way we want our business run. We are the one who pays them anyway. And most of the time, bootstrap businesses pay their suppliers promptly.
YOU HAVE ACCUMULATED SOME GOODWILL IN YOUR WORKING YEARS
Unlike starting a well-funded enterprise, you can start a bootstrap business almost at the same time you quit your job. Making it this far is indeed liberating.
In order for a bootstrap startup to have a fighting chance, you need support from your existing network. This network could be anyone within your business domain.
In 2014, I nearly gave up working in the baking industry due to burnt out. Out of desperation, as far as I’m concerned, anything goes. I went as far as taking three examinations to be a qualified insurance agent. In God’s Will, the insurance venture was a waste of time.
Thanks to my network within the baking industry, God blesses me with a trading company that deals with baking ingredients. And there are competing vendors approaching me because of my background in this area.
Don’t get me wrong. There are people who excel in a new profession, but that kind of probabilities are few and far between.
Koay, a friend of mine received a VSS package three years ago from Intel. Today, he is a training consultant with the bulk of his clients coming from his former employer.
WHEN YOU HATE TO REPORT TO OTHER PEOPLE
I had years of experience reporting to individuals or answering to a board of directors. Let just say, it’s not my cup of tea.
It’s ironic that the majority of people love to work under supervision. This kind of arrangement is good if both parties, the lead and those being lead, contribute to the best interest of the company. Unfortunately, to err is human.
I have had the best mentors as my manager early in my career. Each of them appeared when I started off as a manufacturing supervisor, sales and finally, into the management position. I remember working my heart out when these magnificent people were working alongside and guiding me.
However, God seems to have other plans for me. He turns the supply tap of mentor off. He put in their place powerful people with selfish agendas. My bosses in the latter part of my career, forgive me for saying this, only have their own benefits in mind.
Ironically, these “unsavory” people too, play an important role in determining my new career path. They make it so unbearable to work with them that I have no other choice, but to surrender to God. With God, I bootstrap a new business in 2016.
When I quit the last employment, I ask God to be my Boss forever and no more reporting to idiots again. God, in case You wonder, this is a prayer from me to You. Amen
WE HATE CREDITORS
There are entrepreneurs who don’t mind dealing with creditors.
Mr Devadass was a contractor that dealt in roadwork construction. When he ran his business, his company was always relying on banking facilities like overdraft to finance operation. At times, even his staff salary was financed using this fund when cash flow choked up.
I knew Devadass through an employee of his. Sometimes, Devadass would misuse the banking facility for own personal use, like home renovation and car purchase. As you can guess, his company suffered the consequence of cash mismanagement.
Of course, I ain’t saying that every entrepreneur that takes external funding will abuse the money. But there is a breed of business people who simply love the peace of mind when coming to business dealing.
It’s complicated enough to deal with suppliers and customers. We don’t need bankers and creditors come breathing down our neck while we are busy hunting for our next meal.
YOU ARE OK WITHOUT THE LIMELIGHT
Even the shyest among us love to do the Tony Stark thing once in a while, “I am Iron Man.”
But we know that’s not the idea of why we go into business. Fame invites envy, especially from competitors. The only time when you need fame to play a part in your strategy for success is for publicity.
If the limelight is unnecessary to bring about the leverage like funds and new business, you better reevaluate your strategy. Why court unnecessary attention when you can build your bootstrap in peace?
Take a look at yourself and make your own decision. Business partners and their investment can be helpful if your business model requires support from these elements. On the other end of the spectrum, maybe a peaceful venture is all you need to achieve your goal.