Is there a Fallacy in Your Shoestring Start-Up Thinking?Dec 19, 2023
Will you be starting a Shoestring Start-up or a Bootstrapped Business?
These terms usually refer to the financial resources or ‘the budget.’ A brand-new business rarely has loads of outside funding. So, who pays the worker bee(s)? Who pays for the website, the development, the marketing, the pictures…. Well, you get the point.
When starting a new business or even branching into a new revenue stream, I often hear people say they’re shoestring or bootstrapping it - even more recently, I hear, “I’ll do a lean start-up.”
They often mean they'll use their time/energy instead of hiring out the work - fair, you become the worker bee.
They also intend to invest the minimum amount of money during the start-up phase and only spend on the ‘necessities.’ The ‘must haves’ to bring the new business or product/service to the market. Also, fair. Don’t risk more than you need to.
Then, IF they’re successful, they'll invest in the ‘nice-to-haves.’ Also, fair. Sounds reasonable so far.
What is a necessity, though? That's the ultimate question!
The fallacy of a shoestring, lean, or bootstrapped business is to believe you can start one without any time/energy or - cash on your part.
Each business has different needs. I talk about babywearing businesses the most, so in this case, you need some kind of baby carrier. If you’re doing education, then it stands to reason you need some baby carriers and some dolls, but how many?
Really, how many carriers does a babywearing consultant need?
Could you start with none? What?!!!! Yeah, it might be possible. Keep your mind and options open…
It might be more important to work your network and find a few groups you can get in front of and speak with - your potential customers - so you can understand what your community needs right now.
It might be more essential to invest the money you would’ve spent on the baby carriers to create a few flyers and handouts pointing to a one-page website. Heck, you may not even need a setup to capture their emails just yet because you could ask for them at the events and send personal follow-up emails.
I am not saying this is the best thing ever here; it depends on what you imagine for your business. My point is that:
"Many people spend their investment money on the wrong things."
They prioritize things that don’t bring value for the long haul.
While it’s likely you’ll need a few baby carriers- at some time fairly soon - ask yourself:
- What do I need to know before I choose this specific carrier to buy?
- Why that carrier?
Did several people in the early networking opportunities ask about those carriers? Did your local parenting page have a lot of questions about that carrier?
Do you want the carrier for yourself?
Are you telling yourself you will keep it for the business, too? Then, it’s not part of your investment capital, in my opinion.
Every carrier you buy is obsolete almost as soon as you buy it.
Manufacturers make changes all the time. Many go under—many merge. Sure, you can probably still use the carrier in your work. But let’s be real, you’ll still want the newest carrier, too. This raises another question - what’s your plan for obsolete baby carriers?
How much do you want to invest in the carrier side of your business before you even have a paying customer? This is a serious question - if you’re serious about creating a business. There are other investments you’ll need to make soon.
What about your marketing and sales?
Do you need to start with ads? Do you need a blog? Email newsletter? A website? Do you need all of this on day one?
Are you thinking you’ll start a new Instagram page and promote your new services since that only costs you time and energy? This might be a great way to start. I know it’s pretty darn easy, but is that really the thing to do first?
Who’s this new business page going to engage? What actions should they take, and what services will you offer them? Where will you point them to learn more about you or hire you? How will they pay you, and how much will they pay you for those services? What key ways will you support them, and at what point on their journey?
What about your tech needs?
It’s a digital-first world now; you'll need some tech. What tech solutions do you need ASAP - you know, the ones that need your investment now? What can you use on a free plan? What do you have already? And what can you live without, at least until you get some paying clients?
I could keep going, but you have a starting place.
Invest in a shoestring start-up method, but don’t confuse that with a no-investment start-up.
Have questions, want to talk out your plan? I’m here for you.