What are the pros and cons of bootstrapping for your small business? Also, what are the pros and cons of having friends and family help you with your small business?
Explanation:
Pros of bootstrapping:
- When using internal capital properly you don't need to rely on equity capital more and when needed you can use and raise equity capital efficiently.
- you will have proper control of business and have better creative ideas for your products.
- by bootstrapping, owner getting full command and don't have to answer any stakeholder as there are no stakeholders. so he will enjoy more freedom and work efficiently with his team.
Cons of bootstrapping:
- When you bootstrapping your company you have to rely on less money so the team you will have is less skilled and you have to pay for their mistakes in business.
- With lesser resource of money if you go wrong you have to start from scratch, but when you have funding you don't have to bother that much.
Pros of help from friend and relatives:
- You will have to worry less about funding and contstant tension od interest rate and other things.
- Family member and friends also help about ideas and solution to problem if there is any in business.
- You can use their creativity and ideas in business if they have any.
Cons:
- If you having loss in business the funding will create tension and strains in your relationships with them.
- Sometime they want you to run business according them as they have funded you setting up business.
- They will try to control your business and might will ask for share because you have used their money to set up.
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