Bootstrapping is all well and good when starting out but continuing it for too long can hamper your business. For a viable business, there will come a time when scaling up your business is your best move. Here are 4 indicators that you can stop bootstrapping and start growing:
Once you have proven the concept
So your mum and best friends all agree that your start up is fantastic but have you really tested the market in an impartial environment? Is it viable? Have you generated revenue and most importantly, can you cover costs as well as generate profit? If the answer is yes then it’s time to grow. With these boxes ticked, your business will be an attractive investment for a bank, a VC or angel investor.
Once you have a predictable system
A good test is to imagine if you took a couple of weeks off work would your business survive ? If the answer is yes then it looks like your business is robust enough to tackle the growth curve and is a great indication that it’s time to move to the next level.
Once you are making sustainable profits
The key word here is “sustainable”. If the machine is proving itself month on month and showing tangible growth, then you have proof of concept and the green light to move forward, take on staff and court investors.
When you can no longer satisfy demand
Are your sales orders increasing consistently? Do you need more staff? Is the market reacting well to your product or service? Are you unable to satisfy demand with your existing set up? If yes, then it’s time to progress.