Entrepreneurs around the world know that multibillion-dollar business startups are a rarity, despite the glowing news coverage of high-valued ventures attracting capital from well-heeled investors. These high-profile ventures are out of reach for most would-be entrepreneurs, mostly owing to the fact that such ventures depend on the right business connections and past successes.
What can entrepreneurs do if they cannot attract venture capitalists and other wealthy investors? The solution is a method termed “bootstrapping”. Sebastian Guthery, business leader and serial entrepreneur, has employed that method time and again. In simple terms, bootstrapping means raising capital through one’s own efforts; in other words, self-financing a business venture. Guthery is the leader behind a successful ethnobotanical import and retail operation, and he also founded a prominent industry advocacy group to support his efforts. His skill at taking an idea and creating a multimillion-dollar operation is nothing less than legendary in entrepreneurial circles.
What does it take to bootstrap a business venture? For Sebastian, it meant toiling away 16 or more hours a day, every day, and making smart decisions that balanced risk and reward. Here are some of the takeaways from his experiences in funding and growing his own lucrative ventures:
Don’t borrow money if it can be avoided – owing money to others can create friction and a false sense of security. Many small-time entrepreneurs borrow funds from friends and family, or take out expensive business loans from banking lenders. The key here is to create a savings plan long before the business is launched, setting aside funds for the operation and making smart financial decisions to maximize the value of those savings. Guthery even suggests putting purchases for the business on a credit card rather than becoming reliant on personal loans.
Take action, but don’t become afraid of mistakes – it is all too easy for entrepreneurs to second-guess their way into paralysis. Part of the role of a successful entrepreneur is to learn to become fearless, taking the steps needed to establish and grow the company without spending too much effort overanalyzing the situation. Overcoming the “what-ifs” and fear of mistakes is what defines a true leader. A key here is to set short-term goals and make progress toward achieving those goals before tackling the next challenge. Incremental but regular actions can spell the difference between success and failure.
Establish and leverage a personal network – one of the techniques Guthery used in his path to success was to surround himself with people who shared similar interests and goals. He learned from other business leaders, spent time with mentors, and continuously networked until he had built up a group of like-minded individuals. It is critical to identify the right people – those who have achieved success and had something to share – and to open oneself to learning from their experiences. In addition to connecting with peers, identify industry pioneers to follow their work. Often they will have Twitter, LinkedIn, or other web pages you can follow and gain inspiration from.
See the latest from Guthery – his IMDB profile