Forget the credit crunch: bootstrap your business

Filed in archive Bootstrapper News on September 27, 2008

Has the latest news on U.S. and global financial problems got you down?

There is an alternative. Stop worrying about Wall Street and bootstrap your business startup or expansion instead.

Here's how:
• Start with no money. Begin with a service (generally the least capital intensive kind of business) that people REALLY need.
• Grow with cash flow. Instead of seeking investors to finance your great idea or help expand an existing business, defer your initial earnings or use part of your existing revenue to grow your business
• Avoid short-term loans. This is the big problem with the current financial crisis, business being in the habit of borrowing what it needs instead of expanding only as much as cash flow allows.
• Avoid other credit. Sure there are examples of entrepreneurs who have started their business with plastic, but be very careful when taking this route.
• Seek customers first. If you've got someone paying for your product or service, whatever it is, you're on your way to an effective business model. Don't fall into the trap of planning too much for a business. Find customers, develop cash flow and forget about needing money (or credit) to get started.

Here's more on bootstrapping and its virtues. Please consider joining our Yahoo! and MySpace groups to network with likeminded people seeking to start their businesses without the need for big financing.

Photo Credit: David Bohrer