Self-funding

Financial Management

A popular mantra for success in personal and business finance is “Live within your means.”  Funding a business from own source, often referred to as bootstrapping. ie., pulling yourself up by your bootstraps. Bootstrapping a business often means money is tight, particularly in the early stages. With careful planning and making creative use of the resources, the bootstrapping can be a great way to fund a business.

Once the business is up and running, it should start generating profits and cash that can be plowed back into the business. If the company is doing well, this money will be enough to fund any investments in future. This strategy is very effective, low-risk and low-cost.

  Advantages of self funding:

• 100% Ownership
• Full Control on the business
• More Discipline
• Can know exactly how much money is available.
• Can move forward quickly with what matters most on running the business.

Funding from external sources can be risky. If money is raised through debt, the repayments and interest will eat the earnings. External funding can lead to inflated spending at any time, leaving the business vulnerable if funding dries up later on.

Self-funding makes it easier to keep the business operating at a sustainable level, avoiding excessive spending and relying on its own resources rather than the support of outsiders.

Aiyan Thiruvalluvar says

குன்றேறி யானைப்போர் கண்டற்றால் தன்கைத்தொன்று

உண்டாகச் செய்வான் வினை   (758)

निज धन रखते हाथ में, करना कोई कार्य ।
गिरि पर चढ़ गज-समर का, ईक्षण सदृश विचार्य ॥ (७५८)

Explanation by Scholars:

An undertaking of one who has wealth in one's hands is like viewing an elephant fight from a hill-top.

தன் கைப்பொருளைக் கொண்டு ஒரு தொழில் செய்வது என்பது யானைகள் ஒன்றோடொன்று போரிடும்போது இடையில்சிக்கிக்கொள்ளாமல் அந்தப்போரை  ஒரு  குன்றின் மீது நின்று காண்பதைப்போன்று இலகுவானது.