Why bootstrap a business?

Many people end up at the conclusion to try to bootstrap based on:

  • Your goals
  • How much capital you have, or can get
  • Your network
  • Your risk appetite

Your goals

You might want more independence, coming from a tightly controlled corporate environment. You might want to build a national or international store. Each calls for a different approach. It's the difference between freelancing/consulting alone, or hiring staff and premises. And your willingness to do that depends on your access to capital, network and risk appetite. You can start a freelance business with zero outlay in some industries, making it a very low risk proposition. Or you can get a loan or investors and start to fill an office space with staff, equipment and infrastructure before turning a profit.

Many shy away from hiring staff and premises, as they aren't convinced the administrative and cost overhead would be outweighed by the profit the staff generate. Not to mention the human management activities, as well as any unforeseen negative events they may cause. But if you are growing something to a large scale, reaching the high levels of earnings and creating something that can be sold later on, staff and premises are typically required.

The major counter-example to that is the practice of "bootstrapping" a business, which aims to scale up while keeping costs as low as possible, and offering a service that can be managed by a small team at most.

So your options end up being:

No staff/no premises

  • Freelancer
  • Consultant
  • Contractor
  • Bootstrapped business

Staff/premises

  • Agency model
  • Startup (with capital/aiming for high growth)
  • Retail
  • Manufacturing

The latter are outside the scope of this course, but elements should still apply. Particularly on the growth side. You may be able to bootstrap an agency, but eventually you'll need meeting space and more hands to manage accounts and technical work. Retail is potentially possible too, with ecommerce, but there are many moving parts and stock needs somewhere to be stored.

Bootstrapping is what we've focused on here at Linguaquote, and will be the central theme of the course. While the first three types of business in the no staff list get you the independence you're looking for, they don't end up with a saleable business, nor do they allow you to compound recurring revnue from automated processes. Which can be a powerful thing. So that's what we'll focus on.

Read on to find out about idea generation.

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