Many new entrepreneurs and startup owners have this misguided notion that lack of enough money is the reason for business failure. As one needs money to pay salaries, execute marketing campaigns, and run day-to-day business operations, it is not surprising that some businessmen have such a notion.
However, the reality is different. Money is not the only thing that determines startup success. You need to have a great product first.
Here are 5 key reasons why you should do it.
1- Products Need Nurturing Initially
Your responsibility does not end after launching a product. In the initial stage of any business, a product needs constant nurturing. Focusing on it helps you communicate the purpose of your product to the world. Also, it helps your customers comprehending what it is you do and how it compares.
2- You Get to Know the Market
Nurturing your product idea consists of competitor analysis, industry research and conducting surveys from other industry specialists. It gives you a proper idea about your market, and whether the idea you have for your business is worth pursuing or needs any modification to become successful. And when you have a great understanding of your marketplace from the very beginning, you can create a sound business strategy to help your brand grow and set yourself apart from your competitors.
3- You Learn Bootstrapping
According to Investopedia, “Bootstrap is a situation in which an entrepreneur starts a company with little capital. An individual is said to be bootstrapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.”
The deciding factor in a startup’s success, scale, long-term prospect and your relationship with your company is based on how you fund your business. Young Entrepreneur Council believes that bootstrapping is never easy and certainly not glamorous all the time. But it has everything to boost a person become a better entrepreneur. It encourages the entrepreneurs to grow the businesses with whatever means they have. It gives complete creative freedom and high reward to an entrepreneur.
When you focus on your product and services at the idea stage instead of deciding how you can get funds, it helps you make your product better and understand how you can bootstrap your business to get complete control over your product. When you fund your business by yourself, every last penny matters, thus you need to pay attention to your customers and their requirements by building an excellent offering. This insight and dedication improve the likelihood of generating revenue and establishing a brand faster.
4- You Retain Ownership
When you bootstrap your business at the initial stage, of your business, you get the complete ownership of your company. Self-funding a business denotes that you have to answer to yourself only. You have complete freedom to direct your startup. And believe me, freedom is well worth it to a startup owner.
When you don’t have any parameter set by anyone else about how to conduct your business, you can produce a great product without much outside hassle. You can transform your idea into reality in your own creative way. And that’s what really important at the initial stage of a startup to achieve success in long run.
5- Established Products Bring Funds
Have you already bootstrapped your business and give it a great kickstart with your great product? If you have, then it’s possible that after a point of time to make the business grow faster, you may need more money and an investor. At this point, it will be easier for you to raise money because you have already proven the product out with customer reviews and high margins of productizing it.
A product quality, i.e. how well a product does something that it is supposed to do and how well it holds up over the time is the most important thing that can help you achieve sustainable growth for your business. It is considered a competitive marker of your brand that influences buying decisions and profitability. Therefore, at the starting stage, instead of giving complete focus on how to raise money, you must give importance to your product. Rest will come your way eventually.
Nowadays ventures and angel investors have become so demanding that they want something beyond just a novel idea. Thus, before you embark on the journey of raising funds, you need to focus on your product first.