One Greek Store, an example of a successful bootstrapped business
Starting entrepreneurs usually encounter the problem of funding. There are several ways to go about it, and college students Tony Tran, Nick Leung and Dennis Ngin took a path not commonly traveled: using credit cards. Another interesting path taken by Dennis and his partners when starting the One Greek Store, a custom apparel for the minority fraternity and sorority market, is that they didn’t outsource the their work – a path usually taken by bootstrappers to avoid capital costs from day one. Instead, they bought their own sewing machine. Several factors attributed to this decision, such as:
1. Money saved from a recent internship that made it possible to pay the debt down easily if something went wrong
2. The resale value of the machine which added security since it could be liquidated if necessary to pay debts
3. The partners’ confidence that they had enough demand from a local market on the campus of the University of Florida in Gainesville where they were students to carry the business for the time being.
When they were looking for the right market, they chose not to “go with the flow” but instead, focused on a niche. Once they have the market and tools, the three partners in One Greek Store put in not only borrowed money but also plenty of time and sweat equity to make their venture a success. It was light work during the summer months – until classes kicked in. Still, they survived and today, the One Greek Store is flourishing. Despite the initial risks of his endeavor, Dennis bootstrapped all the way in other parts of his business spending just $110 to host his site and $30 for a website design template. And with the high profit margin, Dennis just can’t help but recommend the very lucrative business opportunity.
Just a reminder: while some people have thrived using credit card funding, there are also dangers to watch out for, and it’s best to keep certain things in check:
1) Keep business and personal cards separate – Don’t use your personal cards to pay for business expenses or you will put your personal credit at risk
2) Resist the allure – Don’t get too many credit cards. You’ll know it’s excessive when managing them begins to get difficult.
3) Know your credit history – Making sure your credit report is correct and up-to-date could make the difference not only in whether you get the card or not but at what rate.
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