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Bootstrap side project or full-time funded?

    • 4 posts
    July 5, 2008 9:14 PM EDT
    I`m thinking about starting my own business in a couple of years; I have a sound business concept with a reliable revenue model, but I`m not sure how I will go about starting my business when it comes time to pull the trigger.

    I`ve broken down my possible startup entry strategy into two options:
    • Bootstrap the project over a couple of years while I work full-time as a means of supporting myself or
    • In two years time, secure funding and work on my startup project full-time.
    Which option would you pick and why?

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    Aaron Stannard
    Editor of Working Smarter
    Owner of Marketing Ninja

    • 66 posts
    July 15, 2008 1:14 AM EDT
    Absolutely bootstrap it!
     
    You need to determine how the business will be structured, determine actual demand, and get all the kinks out.  Once you have a model that works, is generating re-occuring revenue, and is scalable... then consider funding.  Or you may find yourself in a postion where you have enough cash flow to fund it internally (and retain 100% equity), and as Martha says "That`s a good thing."

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    Mike Michalowicz
    Author of The Toilet Paper Entrepreneur

    • 927 posts
    July 6, 2008 6:15 AM EDT

    Aaron,

    Selecting an appropriate capital direction starts with determining what options are available.

    Bootstrapping may be an "available" option if you plan to create a lifestyle business. On the other hand, if your vision is to build an international enterprise - the business will probably need external capital at some point, so it`s best to plan for that in the beginning.

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    Business Growth Masters, LLC -
    Capital Catalysts for Entrepreneurs
    Home of the Scalable Business Plan and QuikStart Capital Programs
    http://www.bizgrowthmasters.com
    info@bizgrowthmasters.com


    • 927 posts
    July 6, 2008 10:42 AM EDT

    Craig,

    Thanks for the nice words.

    In some situations, bootstrapping can ultimately be quite "expensive" - although it may be hard to identify the final "cost".

     

    ---
    Business Growth Masters, LLC -
    Capital Catalysts for Entrepreneurs
    Home of the Scalable Business Plan and QuikStart Capital Programs
    http://www.bizgrowthmasters.com
    info@bizgrowthmasters.com