 "Mistakes to avoid when bootstrapping your startup")
Bootstrapping a business is certainly not everyone’s strong suit and when it comes to startups, as there’s always that high probability of not being able to succeed. However, you might be surprised to know that the majority of startups are funded through personal savings and credit.
However a lot of things can go wrong when it comes to bootstrapping your business, which is why it is important to keep in mind the possible mistakes you can make.
1. Being too greedy
Your savings and life’s earnings are on the line when bootstrapping, but that doesn’t mean you expect your business to pay up overnight. Remember the fact that it takes most businesses at least six months before reaching a financial break even. So there’s no reason for you to expect profits in just a matter of days.
2. Not being greedy enough
There’s a flip side to the problem highlighted above. While you want to avoid expecting success and profits overnight, you also want to avoid being overly optimistic about how your investments are being utilised.
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Many small business entrepreneurs try to grow too fast. It makes sense to rush when it comes to cash inflow, but not to grow your business too soon when you’re bootstrapping your business. Of course, growth also requires further investment, which requires more cash.
4. Not having an emergency fund
Despite your lack of sources for funding, it’s crucial to have and maintain an emergency fund. An emergency fund ensures that when you run out or are in dire need of financing, you don’t have to rely on lenders or other sources that will only increase your debt.
This is an excerpt from Tech in Asia. You can read the full article here.