What is Bootstrapping?
The journey of entrepreneurship is not easy, and one of the qualities an entrepreneur must possess is the ability to obtain maximum output from limited resources. Bootstrapping refers to utilizing personal finances and available resources to establish a business. The process of bootstrapping is about self-reliance and doesn’t allow the interference of any external investor.
Using personal savings and the limited resources you have in your hands to kickstart your entrepreneurial journey isn’t a bad idea, although, as everything has two sides to it, the concept of bootstrapping too has its advantages and disadvantages.
Advantages of bootstrapping:-
- Authority over the business: Bootstrapping doesn’t allow you to be financially dependent on someone; does it provide you with full authority over your startup? Bootstrapping also allows a quick start, as you don’t need to invest your time in pitching the idea in front of investors and convenience for them to step in.
- No equity split – While you choose the path of bootstrapping, it means you don’t have to chase investors or go for huge loans which saves you from equity split or heavy interest rates.
- Healthy spending habits – When entrepreneurs decide to spend their money on their startup without taking any external help, they spend consciously and tend to make wise choices.
Disadvantages of Bootstrapping :
- Slow growth: Comparatively, businesses funded by investors grow at a faster pace than businesses sustaining their resources.
- Limited resources: Relying on your resources might create some limitations. At some point, you might run out of expenses and external financial support may appear necessary to you.
- Risk factor involved in bootstrapping costs your personal savings, which makes the process a bit risky, if you fail at your business, it’s you who has to bear the loss all by yourself.
Bootstrapping techniques
Here are some of the bootstrapping techniques you can opt for as self reliant entrepreneurs –
- Analyze your resources – Try to bring whatever you have in use be it financial assets, social resources, materialistic assets.
- Don’t hire until necessary – It’s a myth that establishing any successful business requires a full- fledged team. Don’t engage employees until it’s required.
- Ensure cash flow – You might take advance payment from customers and utilize that money in further processes. Bootstrapping businesses demand a strong consumer base.
- Essential marketing strategies – Create brand awareness for your business such as creating blogs, collaborating with social media influencers (keeping the cost in mind), staying in touch with customers for the purpose of sales & promotion, building strong digital presence all these can be of great help.
- Less inventory – It is suggested to invest less in inventory if it is a self- funded startup to minimize the risk factor involved.
- Testimonial matters – Gaining the trust of customers is the key to establish a successful business, for this to happen don’t hesitate to promote your products & services among potential customers, if required provide them with free samples of your products or free access to your services.
Indian bootstrapped startups that are thriving
- GrabOn – Founded in 2013, the company has maintained its USP (unique selling point) by providing the customers with authentic and updated coupon deals across a wide range of categories be it beauty, fashion, food, lifestyle, flights & hotels, electronic appliances, movies and a lot more.
The business strategy of GrabOn includes B2B partnership with e-commerce platforms which mutually benefit them. Basically the company help its affiliates to expand their reach, promote their brand and widen their consumer base by providing the best coupon deal to the end customers. It helps India to save big.
- FusionCharts – It is a data visualization tool. The company says that data interpretation through spreadsheets is a difficult task, thus FusionCharts helps to convert the raw data into the format of graphs and charts which becomes easier to interpret.
Information in the form of graphs and charts helps to draw better conclusions and in turn make better decisions. For example using a data visualization tool it becomes easier to track the record of sales, profit, executive’s performance and much more which helps in strategy building. A user can get access to over 100 kinds of charts and 2000+ data driven maps.
- Zoho corporation – This software development company anticipates the need and innovates products that help to resolve business problems. Zoho corporation focuses more on research & development, innovation and customers’ needs rather than investing in sales & marketing.
Zoho corporation believes software development to be work of art and the company has successfully launched over 50 products in the market within the span of 25 years without any external acquisition. To name a few companies it has served are Amazon, Ola, Hyundai, Hotstar, Philips, L’Oreal, McAfee and a lot more.
- Zerodha – It is an online platform providing trade & investment services in Mutual funds, stocks & IPOs, currency derivatives, commodity derivatives, bonds and more. Started in the year 2010 the company wanted to resolve issues around trade and investment in India such as costing, technology, awareness.
The company is one of the biggest stock brokers in India with a strong consumer base of over 1 crore customers. Zerodha also runs online education programmes as an initiative to guide potential traders. Equity delivery investments and direct mutual fund investments are absolutely free of cost.
- 42Gear – The company provides enterprises with mobility solutions, cloud solutions and builds unified endpoint technology that helps businesses to grow.
It develops softwares that securely monitors and manages company owned as well as employees owned devices at a reasonable maintenance fee.
- Freshworks – The software development company Freshworks builds easy to use softwares for enterprises of all sizes. Mainly it develops affordable and quick to implement softwares designed especially for end customers which help companies to enable better consumer experience.
- Quack Quack – The meaning of dating has definitely changed with changing times. In the present era dating apps are getting widely recognized and Quackquack is one of the leading Indian dating apps which is not only easy to use but also reliable for users.
With over 20 million app installations, almost 41k + users upload their photos everyday on the dating platform. The company reported over 3.14+ matches last year making it one of the most successful dating apps in India. The app uses AI tools to detect suspicious users ensuring users safety.
- HappyFox – A software company which provides ticketing solutions and help desk to businesses dealing in the segments like education, media, e-commerce, retail, Information technology, manufacturing and more.
- Thinkpot – It is a manufacturing based company which produces quirky designs across 20+ categories. The vision of the company is to make international standard products available to the Indian consumers. Products belonging to Thinkpot are available across 100+ retail and online stores with over 500 designs.
- Social pilot – It is a marketing tool which helps its customers to hit their social media goals by publishing customized content for various social media sites, analyzing and reporting the progress and engaging more and more audience through its strategies.
It has a consumer base of over 12,000 customers and the social media marketing agency produces over 10 million posts and reels for its clients.
- Tagalys :- The company promises to bring intelligence to online stores by predicting the product performance for every existing and newly launched product which helps online retailers to improve their sales and conversion.
- Kayako – It is a software development company which helps businesses by making help desk softwares for them which connects businesses to their end customers.
The company helps startups, governmental organizations & charities, multinational companies to deliver the best consumer experience.
- Wingify – It is a software company that makes technology based products to optimize the website of its clients, mainly to increase their sales, conversion rate and signups. Indian Brands like upgrad, Paytm, ICICI bank are also included in the consumer list of Wingify.
Conclusion
Establishing a business without taking any external financial support isn’t an impossible task. Entrepreneurs need to analyze first the domain they want to enter, the problem around which they want to work and accordingly they need to make strategies. Correct strategies can help in building successful startups even with limited resources.
