My parents happen to be a bunch of mad thrifty & handy people. They don't suck at anything. They sure know how to "get by" with a limited amount of resources.
Because of this, it's been engraved in my brain so much so that, if I left myself to my own devices, there is not a moment where I don't say to myself, "How do I get that with the best deal I can possibly find without wasting time? Ah heck, I'll just do it myself."
I had to 'unlearn' this mentality entirely when I left my corporate life. By the way, the process of 'unlearning' is an ongoing; it never ends.
Here's the ultimate question for you that I had to ask myself:
“Do you want to just... ‘get by’?”
If you are an entrepreneur reading this post, your answer should be a big, fat "NO."
This idea of "getting by" puts you in the mental space that is far, far away from the place of "growth." As a result, you may end up spending unnecessary time to get to where you want your business to be. In other words, this can cause stagnation in your business and slow you down from growing it.
Here, I'm going to share a whole new perspective on how to avoid "Bootstrap Trap" that I wished I knew back then.
3 Signs You Are in the Bootstrap Trap
There is nothing wrong with the value of being thrifty and resourceful the way my parents had demonstrated for me. But, the difference is that they spent their entire working lives at corporations. They had predictable income streams that were somewhat fixed.
Naturally, being thrifty & being good at creative problem-solving served them well.
However, as an entrepreneur, if you take this too far, the effort of being thrifty will end up hurting your business.
Here are some telltale signs that you may be in the Bootstrap Trap:
1. You feel your effort to grow your business isn't paying off. It seems the hardship and struggle are never-ending despite your hard work. Or progress seems extremely slow compared to how much you devote your time to your business.
2. Your business operates on short-term fixes and looks like a monster with 1000 band aids. You may be using 3 different free tools to achieve one task. Or your sales funnel looks like a maze you find in English gardens because it was built organically over time with whatever you could afford.
3. You find yourself always looking for deals or free things you can get your hands on, and your main focus is NOT to pay for anything. This will cement your brain into "cheap" mentality and ultimately will stall your business from scaling.
”Saving money” should never be the ultimate goal in your business. This is where we get into the Bootstrap Trap. Instead, saving should be viewed as a conscious choice to pay for resources that are helpful to grow your business faster. That is why it is vital to establish a clear “why” and a plan to achieve it.
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Which Group Do You Belong To?
There are 2 groups of entrepreneurs who consistently have internal chatters about how they cannot afford things. In this post, I focus on helping people who belong to the latter.
I'm blown away by how many people bitch and moan about how their lives are miserable and how they "cannot afford" something that would help them get ahead or resolve their struggle.
Yet, they have no problem spending away their money on "pleasure-inducing activities" such as taking expensive vacations as a reward for making a small progress in their business, attending all invited business as well as personal social activities (and not being selective about it), or treating themselves in the name of expensive "client dinners" that they get no sales out of.
If you add them all up, you and I know they can easily afford to make a different, much wiser choice - the choice of investing in themselves and/or plowing back the money into their business.
Now for this group, it's a simple case of them not getting their priorities straight. So, I'll just leave them where they are for now.
On the other hand, there's another group of so-called “bootstrapped” entrepreneurs who are hard-wired to be thrifty. This is the category I belong to, and if you are like me, you should be mindful of not falling into this Bootstrap Trap.
Here is how it goes:
We firmly believe that we are doing ourselves a favor by being disciplined and tough on ourselves.
Well, that's what we think anyway.
But the reality is completely opposite of that. We are actually being a disservice to ourselves.
Here's what I mean.
On the outside, we appear we are doing the right thing by being frugal. But on the inside, we are not even aware that we are sabotaging ourselves by hiding behind the "discipline" excuse.
What we are actually saying is,
"I don't deserve to spend on XYZ because I am not worthy of it yet. I don’t trust my ability to commit to it. Instead, the only resources I am willing to put into compensating the void is giving up my time and labor."
It’s the fear of commitment which leads to the scarcity mindset. As a result, we do everything under the sun by grinding and hustling it out instead of being strategic about the best use of our time and resources.
Are you surprised? Chances are you have never thought about purchasing decisions you make for your business in this way. Now you can understand why this can lead to entrepreneur burnout.
Do You Know What's Messed Up? It's Our "Affordability Math."
It's not that we don't know the concept of “investing in our future.” To back this up with a piece of evidence, I want to bring up the fact that most of us went to college. But why?
All the recent arguments regarding whether college education provides value aside, we borrowed money in many cases, to invest in ourselves to maximize the chance of increased future earnings. Right?
This was growth-driven thinking. We bet on our future by committing to something with a high price tag and trusting in our ability to use it as leverage.
But somewhere along the way, we allowed ourselves to keep this "can't afford it" narrative in our heads at all times.
"That's too expensive! There is no way I can afford it. I'll just do it myself."
Every time we say this to ourselves as a reaction to something that costs more than expected, the next question we must ask is:
"Relative to what?"
I know the answer to this all too well. It's relative to how much money we have RIGHT NOW. This is exactly where our math is messed up.
Instead, it should be relative to:
"How much we are going to gain in the future by making an investment to get XYZ now."
Of course, nothing is certain or 100% guaranteed. Nonetheless, purchase decisions as well as hiring decisions should be made by focusing on the future gains.
There's another factor that's often gets ignored. That is, "the ultimate cost of time and resources we incur by NOT opting for XYZ you can pay for that would help avoid losing money in the future."
Often, the cost of not achieving our business goals is far greater than the cost of whatever that we think we cannot afford to get right now.
In the nutshell, the point is this:
We are ultimately undervaluing ourselves by being cheap and running away from making a big commitment.
While we want to be resourceful to avoid unnecessary & easily avoidable costs, we must be mindful of what we can potentially lose as a trade-off. There is a fine line between “being resourceful” and “being just plain cheap.”
At one point, I had to call myself out for just being cheap and re-examine how to overcome this trap in order to foster more of a growth-driven mindset.
This is counter-intuitive. It’s difficult to see intangible values and commit oneself to a potentially large investment whether that could be hiring a coach or any other help, purchasing new equipment, or upgrade to a new system to handle the volume.
Being Resourceful vs. Being Cheap
I have already discussed my strong view on how you should own your command center by being dangerous enough in all areas of your business to avoid getting into “premature delegation” trap.
So naturally, you might want to tell me that I'm contradicting myself by suggesting not to delegate quickly yet also suggesting we should not be cheap about investing in and hiring help or buying tools to grow our business.
Understandable. But not accurate.
Regardless of the strengths and weakness in your business, you must understand what your business as a whole depends on, whether it is building a team, outsourcing to vendors, or buying new systems in order to scale.
However, I don’t recommend stopping there while you do everything just because you feel you can’t afford to get help in some areas you feel comfortable delegating the right way.
Let me give you an example.
I do all of my graphics for anything that has to do with my business. But, this is not because I am willing to trade up my precious time so that I don’t spend a dime on graphic designers. If this was the case, then I am just being “cheap.”
On the contrary, I looked at the process, quantified the cost, and still reached a conclusion that, for now, it makes sense to do it myself. This was a conscious decision. Keep in mind, I have the background in operating Adobe CS products i.e. Photoshop, Illustrator, In-Design, Premiere from my corporate days. This is my wheelhouse.
In this particular case, you can easily imagine that the cost of communicating back & forth with another designer for my basic graphics needs would outweigh the benefit of getting help from him or her.
In the near future, I can absolutely see a possibility of handing the graphics works over to someone else especially when I am going to rebrand. This is the reason I have a system, processes, and specs documented right now so that all I need to do is to direct a designer to where they are stored.
Notice, the difference between “being resourceful” and “being cheap” (disguised in the term “bootstrap”) is whether you can quantify & verify the benefit of doing something on your own and whether you are setting this up to be scalable rather than treating it as a temporary fix.
On the other hand, there was something I had to overcome in a major way: purchasing technology and technology devices. The way I used to think about buying technology was flat out cheap.
Before: So long as it (i.e. a cell phone, a laptop, a camera, a monitor, etc.) was operating, I keep using it until it dies.
After: A minute it starts to show even a slight sign of sluggishness, I upgrade.
“Tolerating” is no longer something to be proud of. It costs us enormous time and mental energy to tolerate something (or someone) operating at the less optimal state. I finally came to realize that the act of tolerating is costing me way more than I want to bargain for.
In the beginning, I felt guilty about ditching something that was still usable. But soon after, most of them were resolved by recycling, trading-in or handing them off to someone. Therefore, there is no excuse for me now to hold onto something that does not help me increase productivity or free up time.
Just to recap, the below are some do’s and don’ts to avoid falling into the Bootstrap Trap.
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Bootstrap Trap: Do’s
1. Every time you are about to say, “I can’t afford this,” make it a habit to ask yourself whether paying for this can help your business grow faster and generate more revenues in a long-run.
2. Have honest conversations with yourself to learn what your money story is. Is it based on scarcity mindset? Are you afraid of losing something over gaining something? Have you been told that money can only come from hard work?
3. Invest in foundations of your business by paying more than what you would feel comfortable paying for robust and best options that would allow you to scale from the beginning as opposed to cheap or free less-than-perfect options as a quick fix. Accounting system, CRM, project management platform, payroll company, and legal help are some examples.
Bootstrap Trap: Don’ts
1. Being emotionally reactive to price tags. Instead, focus on potential ROI and ask yourself what you get in return and if it is aligned with your vision for your business.
2. Not making your time a priority. Your time and labor should not be the answer to everything in your business.
3. Saving small amounts of money for the sake of saving. The goal of saving should be to pay for something that can accelerate growth. Not investing in hiring experts or a team, paid courses or book, faster equipment or other helpful tools can become a setback.
If There’s a Will, There’s a Way
You are thinking, “OK, that’s great. What if I really don’t have that kind of money?”
I hear you. I felt the same way back in 2016. There was one online course I have taken, and the price tag was $2000. I was reluctant to pay that much for a course even after I have done some due diligence.
The reasons I went ahead with it anyway was as follows:
1. I wanted to see it with my own eyes how a $2000 course looks like in terms of how it was designed, what else would come with it, what platform was used, and what level of support was in place.
2. I have estimated the cost of “figuring it all out” all by myself without taking this one. The cost was a lot higher. It would have taken about 18 months with trial & error that would have cost me more than $2000.
3. Because of the price tag, which by the way isn’t that high now for a course like this one, forced me to be committed to going through the entire modules with the even level of intensity and curiosity.
If you find value in your future and the future of your business by purchasing anything, you are going to find a way to make it happen. I have written about a similar concept in “No Budget? No Problem: The Magic Blueprint to Overcome ‘No Budget’ Objections” to prove this point.
If there is a will, there is a way.
Additionally, understanding your own objections in regards to your purchasing decisions can help you immensely when you pitch or sell your service to your prospects because they are likely going through the same thinking pattern.
Remember: You don’t need to make drastic changes; you can start small by asking questions before jumping into a conclusion that you can’t afford something. Start by asking yourself how can I be resourceful without being cheap?
It’s a trap you don’t want to be stuck in.
Gradually shift your focus from “not being able to afford XYZ” to “the potential loss of not affording XYZ.” If the potential loss is greater, then find a way to afford it.