Yup it's true, everyone and their grandmother wants to be an entrepreneur. Sounds so sexy doesn't it? "What do you do for a living?" "Well...cough cough...I'm an entrepreneur." (the crowd goes wild) Because the term entrepreneur has been placed in the spotlight by hollywood, everyone thinks that it's so easy. Well I'm here to tell you, it's more difficult that what you see on the big screen. One of the main things that gets me is so many "entrepreneurs" thinking that for their idea, they deserve millions of dollars in funding. Simply for having an idea. Let me clue you in on something. EVERYONE has ideas. It's those that execute that win the game. I have started four different businesses, become a minority shareholder in a 5th and written a book ALL with no money to put up. So based on my experiences, here are the top reasons you should boot strap your startup.
1. You Are More Careful With Your Spending When It's On Your Dime
Think about it this way. An angel investor loves your idea and grants you $100,00 in funding. Fantastic right? Well, not necessarily. When something is given to you, you are not as careful with it. Since you are starting out with a large amount of cash that you did not have to earn, you may spend it in the wrong places. A local TV station approaches you and offers you a "great" deal on an ad that they say will reach 150,000 people in your target audience. Sure, why not throw $40,000 at TV ads. If you had to earn that money yourself with your own sweat, would you be so quick to toss 40k into TV? Probably not. More than likely you would start with door to door sales, searching for free press, partnerships and Facebook advertisements. Which I believe are very effective ways to get your brand out there. Most of what I just listed cost you nothing but time.
2. You Find More Ways To Be Creative With Your Resources
Since starting my companies, I ALWAYS look for opportunities to barter. Yes, people still do that in 2016. Need some equipment for your new business? Look on craigslist and find someone who has what you need. Reach out to them and see if they would be interested in a trade for your services in exchange for the gear. Happens more often than you may think. I mentioned earlier that I released my first book and it didn't cost me a dime. A found a talented writer that was in need of a new website. I approached her and asked if she would be interested in a trade. I build her website, she writes my book. She jumped at the opportunity. The only thing it cost me was time. Is there a large conference coming to your area? Often times sponsorships go for several hundred to even thousands of dollars. This past year I found a great event that did not have a company filming the event. We made a trade. We will develop some video content in exchange for 8 minutes to present our business. The trade ended up better than I expected. The enjoyed our presentation so much that 8 minutes turned into 25 and we gained 4 new clients. Time to get creative.
3. Only Answering To Yourself
When you bring in an outside investor, you give up control. The reason many people go into business themselves is because they want to be their own boss. Well if you bring in investors you can kiss that dream goodbye. If someone gives you thousands of their hard earned dollars, you will have to answer to them. Now it's true, you more than likely will retain majority control of your company, and you should. But now you have someone else looking over your shoulder. Wondering how hard you are working. Questioning when they will receive a return on their investment. Not to mention the pressure. It's hard enough starting a business to support you and your family. To have the added pressure of generating large enough margins to cover your bills and pay your investor back, no thank you.
One thing I want to make clear. I'm not saying that it's bad or wrong to take on investor dollars. There are many cases where this could work in your favor and help you grow faster than you would have on your own. Just consider these points before you deposit that check.