Chris Garrett is a successful social media consultant and blogger who is an ardent supporter of bootstrapping. I had been reading his blog for a while when I found an article from him about bootstrapping over at another blog. That’s when I put two and two together and decided that I had to interview Chris. Here’s my interview with Chris Garrett.
Jim Lastinger: Tell me a little bit about your company and what you do.
Chris Garrett: I guess you could describe me as an internet marketing consultant but really I teach people how to profit from their ideas, knowledge and experience by growing an audience of people who know, like and trust them – it’s about getting people to be attracted to you and trust you enough to take up your solution or advice.
JL: How has bootstrapping shaped your company?
CG: The biggest impact was when I left my job to start the company – I said I would never go into debt to fund it so I waited until I had a good enough contract lined up that would fund everything else. Now the smart thing to have done would have been to have money in the bank set aside for if anything went wrong, but I was lucky enough that before the worst happened I had everything in shape!
People have called me stupid, that I could have grown exponentially faster and bigger, but you have to understand A) I have been burned in several startups and B) My business is more about having freedom and lifestyle rather than being big or breaking any profit records
JL: Would you accept any venture capital now if you needed it?
CG: If the right project came up I would consider it, but I have seen the damage that can be done to a business by just taking what is on offer without thinking everything through – people don’t just hand you a bag of cash, there is always a deeper impact from control through to what the business becomes.
JL: How do you manage creating new businesses/products in a bootstrapped company (financing, workload, etc.)?
CG: First I keep overhead low, and the overhead I do take on is on a project basis and therefore funded out of that project. I do a lot of partnering. I build income generating assets to cover any payments that need to be made.
JL: What advice do you have for new entrepreneurs when it comes to choosing between bootstrapping and seeking outside funding?
CG: Look at the goals of your project, the lifestyle you want to have, how rapidly you need to grow, and what it will take to grow. Do you NEED the stuff you think you need? OK, you might need to invest in sales, stock, location, staff, but do you need outside investment to acquire and maintain these costs? Sometimes you do, sometimes you don’t. Don’t just do something because that is “how it’s done”.
To give you an example, I used to work for an agency that had as many account managers as designers, most of whom were not fully occupied, meaning those designers had to do additional billable hours or increase the rates to cover those people. A good account manager can earn their keep by getting additional work out of clients and keeping them happy, but of course not all of them were good account managers. A lot of the times those people meant well but just slowed down communication and were a net cost to the company.
JL: Any financial advice for bootstrappers?
CG: I think the simplest way of putting it is to look at outside cash as a cost to the company. Somehow that money has to be repaid, and sometimes the conditions are not worth it. Look at all the options before putting your hand in the cookie jar!