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Bootstrapping is a wonderful concept. Having started over 40 businesses myself, many of which were bootstrapped, I know it works.
But for the solopreneur or micro-business owner who has ambitions for real growth, it contains a hidden trap that can strangle your business almost at birth.
Here’s the theory:
Bootstrapping in theory
What bootstrapping is meant to do is to move you seamlessly (if slowly) along a trajectory of growth, only using resources as you find them, thus avoiding the need to find external capital.
Now, if you’re a committed solopreneur, with intentions to remain a solopreneur, that’s fine.
But if you want to move from being a solopreneur into a microbusiness, a small business, a medium-sized business, or a global whatever, then there’s a problem lurking ahead.
Here it is:
Bootstrapping in practice
In reality, growth is never seamless. There’s always a point at which a step is required to get to the next stage (in moving from solopreneur to microbusiness or small business, that step usually involves moving out of the home office, committing to employing someone, or purchasing expensive but needed equipment).
And it’s at this point that all sorts of subliminal stuff kicks in, testing the solopreneur’s commitment to building their business.
Do I really want to do this? Is this worth it? Is there a financially viable future if I make this commitment?
This is a key inflection point – the point at which what is now a source of additional income may (or may not) become a business in its own right:
Bootstrapping to viability
There are two viable responses to the bootstrapping ‘step challenge’:
- Your business plan shows that you will make a good living continuing as a solopreneur, so you plan and act accordingly, or
- You want to grow a stand-alone business, so you make a conscious decision to move out of bootstrapping mode and do whatever it takes to make the step up in resource commitment.
"Bootstrapping puts you in a position where your company has to succeed. It forces you to find ways to be creative and unique, which can result in innovative new products or services." - Les McKeown, Founder and CEO, Predictable Success
The trap many solopreneurs fall into is in sublimating, ignoring, or rationalizing away the ‘step’ decision altogether – remaining in ‘hobby’ mode, or reaching for other sources of income (selling other people’s products, joining affiliate programs, taking part-time work, or gigs outside of their solopreneur niche), in the hope of avoiding the key decision: how am I going to make this work in the medium and long term?
So, when you reach the bootstrapping inflection point, here are the key questions to ask yourself:
- Am I doing this because I want to work on my own (as a solopreneur), or because I want to build a business bigger than (or independent of) myself?
- Is there a market that will support my decision in (1)? (TIP: Get someone else to help you answer this. Your own perspective may be, shall we say, emotionally invested.)
- What is the next step I need to take to make it happen?
- What is the investment required?
- Am I prepared to make that investment?
- What do I need to stop doing, to focus solely on making this work? (Yes, those other things you’re doing to make a living which aren’t part of your solopreneur niche will have to go.)
One of the best things about bootstrapping is that it puts you in a position where your company has to succeed. It forces you to find ways to be creative and unique, which can result in innovative new products or services.
Taking the time now will make achieving those next steps much easier later on in the process!