What is Shoestring Entrepreneurship?!? A “Shoestring” or “Bootstrap” business refers to a business started with the owner’s own funds or resources. The alternative is for a would-be entrepreneur to develop a business plan and seek outside investors. There are disadvantages and advantages to both types of businesses.
The main advantage bootstrapping on a shoestring budget is that you lower your risk by using your own funding and in return you have complete control. When you use funding from other investors, naturally they are going to want to have some type of control over the business. However, what you give up in control you have gained in the amount of capitol needed for your business. Some business models may be impossible to pursue when limited to your own available resources. This would be a case where it would to your benefit to pursue investors for your business.
You may feel like you have a good mutual understanding after pitching your idea and receiving the “go-ahead” from an investor. However down the line they may have a different idea of where they want the business headed than you which may put a cramp on your ideas and in turn your motivation for starting a business in the first place.
The advantage to starting a “Shoestring” business is that you can start where you at with what you have. This is a huge advantage because it gives you momentum and gets you to start with your idea. I believe is one of the biggest obstacles that many would-be Entrepreneurs never overcome. Just get out there and start with your idea! You will learn as you go. Don’t worry so much about having a solid business plan right from the beginning. Just jump in!
Sure do some planning. That is important because it gets your mind engaged and active in the business ahead of time. However, don’t fall for the common trap of “Paralysis by Analysis” and end up never doing anything. Time is ticking and the world won’t stop spinning for your to decide to get out there and start getting your hands dirty.
It is equally important to start doing something to move your business forward so that you begin to gain momentum. And one of the greatest things you can do to gain momentum is to make your first profits to show yourself that it is possible. For this, the best way to start is by selling “stuff.”
And the easiest way to do this is to go through your house and find things that you no longer want or need. Find things that you are willing to part with. And then utilize the internet to sell these items via eBay or Amazon. I would guess that almost everyone has at least 500 dollars worth of stuff they no longer need. For most it is probably more around 2,000 to 4,000 bucks if you are really honest with yourself as to whether or not you really “need” something or not.
I took this perspective. I tried to define things as either an asset or a liability. In financial terms, and asset is something that bring you more money or has the potential to do so. For example if the value of your house is increasing and you can sell it for a profit then you could consider it an asset. If you are able to make money with your computer then you could also consider it an asset. Now think of your TV, what would it be? Unless you have a method for making money with your TV then it is a liability because it cost you money but you are getting nothing financially in return for it.
Now I understand not everything is about money. Some things you have at home are for sentimental value, some things save you time, some things are for entertainment which you do need some of. My reasoning for looking at things the way I described above is because I wanted to start my own way of bringing in my own income and I was willing to part with quite a bit right now with the goal of creating my own income streams in the future. I want to create income streams that I do not have to exchange excessive amounts of time for as I have in the past in the form or a job. Instead I want to be geographically free by being able to run my business from a computer anywhere. I also want to be able to have freedom of control over my business which is why I am going the shoestring entrepreneurship route.
I’d love to hear what you all think, so leave a comment below.