Bootstrapping big deals

Filed in archive Bootstrapping Thoughts on July 31, 2008

Photo courtesy of iStockphoto, Image# 3898716


So what is the big deal with bootstrapping? Why should perspective entrepreneurs consider it as a method for starting a new venture? Here are some reasons from my perspective.

• Get rich quick. Well not that quick, but certainly bootstrapping allows entrepreneurs to expand their businesses more rapidly than those who must wait for funding. Whether your business is already operating or just starting out, bootstrapping allows you expand and change direction at will simply by making that next sale and bringing in more cash flow for expansion.
• Make your own choices. No board of directors, no bank presidents or loan officers. Only the bootstrapper decides on the direction of his or her business venture. That decision must be based on customer need, of course, but when it comes to identifying and developing new markets, bootstrappers are masters of their own fate.
• Start where you are. No need to wait until you have the money to start a business. Bootstrapping allows you to start with what you have tailoring an approach that fits your limitations and plays to your advantages.
• Grow with success. Avoid the pitfalls of expanding too fast by borrowing or financing for an unpredictable market. The bootstrapper grows his/her business with growth of revenue meaning the growth is sustainable over time and based on a proven market rather than speculation.
• Own what you grow. Instead of making payments to investors or creditors, bootstrappers are able to keep their earnings and reinvest into growth of the business and ownership is not diluted. What you create with this method belongs to you with no strings attached.

To read more about bootstrapping from one of the seminal posts on the subject and major influence on this blog, read Greg Gianforte's "Bootstrapping your business: Start and grow a successful company with almost no money."

Additional thoughts? Leave a comment below.