Starting a firm is one of the most planned decisions that one can make in their lifetime. In fact, the founder(s) have so much on stake that they look at all sorts of possibilities - including that of failure. Thus, building something on their own requires practicality, technical expertise and management knowledge in addition to the funds.
Here are some tips on bootstrapping your own business by co-founders of Integration Wizards Solutions, an Indian start up that’s purely bootstrapped and profitable since its first day! Founded by Kunal Kislay, Saquib Khan, and Kumar Raman in 2014, Integration Wizards has a unique product, deployed by a global clientele including eight Fortune 500 companies.
1. Learning to Balance
According to a research published in the Entrepreneur, business knowledge with necessary technical expertise in product development is very important for starting any business. However, "The best approach to achieve this is to get the right co-founders," says Kunal. He further adds, "As your partners they play a key role in taking the organisation in the right direction by bringing their expertise, be it management or technical as well as contributing on various aspects of work and finances as and when necessary, especially if you are self-funded."
2. Financial Planning
“While the lessons learnt along the way are priceless, one of the key lessons this journey teaches is the financial planning,” says Saquib. He adds that one needs to evaluate their revenue sources, plan a clear burn out strategy as well as resource management.
3. Client Acquisition
It’s not just about starting out with an idea, it’s about researching the need for it and developing the product accordingly. If you carefully carry out this research, it has the potential to develop a product that could make your profits break-even within a short span.
4. Creativity in promotions
Bootstrapped start-ups need to be creative in their PR and promotional activities too. While, they should be proactive in attending events and conferences to build personal contacts, it’s important to manage the funds in the right direction, and they need to decide when to spend and where.
5. Risk Assessment
Although, most entrepreneurs are confident, “One should have an exit plan in mind too” says Kunal. This is crucial as you need a plan in case things go south. Risk assessment is very important to save you from bankruptcy. It gives an overview of the business model, the revenue sources, market research, and management strategy et al.
While the sense of responsibility increases as you run an organisation, the freedom to play by your own rules is a breather. As a bootstrapped firm, you will not have venture capitalists or investors breathing down your neck for every decision you make.
Since the decision resides with the founders, the start-up growth is mature as it is free from outside influences that could push the company in various directions. Thus, ‘the company focuses on producing flagship products while retaining their company culture,’ says Saquib.
As they say, necessity is the mother of invention – especially when your own pocket is on the line. Thus, you tend to innovate, invent, and reinvent on various aspects of businesses. In fact, sometimes you might find yourself working or making decisions on aspects of management that you haven’t done before.
However, one disadvantage of a bootstrapped start-up is undoubtedly “the Cash Crunch.” It’s a perpetual reality and affects many decisions. One of these include hiring the right talent. As with all good things, hiring the right candidate comes with a price too. Moreover, if you haven’t taken interviews before, decision making becomes even more difficult.