3.2 Dilemma 2: managed growth
A second dilemma is that it is very common for start-ups to ‘bootstrap’, i.e. to operate with no external help or finance beyond one’s own savings or available personal credit (which was first discussed in Session 2). While it might be exhilarating and interesting keeping it all under your own control, pretty soon it may also prove to be overwhelming or even counter-productive.
Activity 3 Limitations of bootstrapping
Can you think of three signs that indicate it is time to go beyond bootstrapping to seek external resources?
Enterprises of different types will have slightly different needs. For example a physical product may need to store raw materials, manage packaging and be made on premises. Before long you might find that, for example, sharing a kitchen, computer, phone line or office space will create a problem with capacity.
Nobody has more than 24 hours in a day! No matter how talented and willing you are to work hard and do it all, at some point you will have to decide where you should focus your time and energy for the best. At that point, you may need to consider recruiting staff, volunteers or other support to be effective in each of the three areas of your enterprise – running, getting and delivering the business.
To turn a business idea into a reality you will need to deploy a range of skills, knowledge, experience and resources. Some of these you will have already. Other skills and knowledge can be acquired or developed, either through your own learning or by hiring the right people, on a temporary or permanent basis.
The combination of the knowledge, skills and often ‘personality’ of you and your staff/volunteers or network is unique and can form part of your competitive advantage.
However, many small firms do not employ support staff, turning instead to more creative uses of technology (e.g. accounting software) or making more use of outsourcing (e.g. virtual PA or customer service centre, or sales).