By: TimoStevens (2009)
“Doing More with Less”
Bootstrapping is the art of learning to do more with less. During the prelaunch phase of your business, raising capital may be difficult. Thus, bootstrapping becomes an alternative for your capital formation strategies.
An entrepreneur who operates from a mindset of bootstrap management understands that all resources are scare and that cash must be cherished. To him or her, “cash is king!”
Most entrepreneurs in today’s world have started successful businesses on a wing and a prayer and one special ingredient: an understanding of the art of bootstrapping. These entrepreneurs have all learned how to survive on a shoestring budget – by being creative and aggressive and by monitoring their cash flow carefully.
Take for instance, your business like most startups, needs $200,000 for growth and expansion (or survival). Instead of focusing on how and where the money can be raised, the bootstrap entrepreneur will ask, “what can I actually do with the money, and are there other means to obtain these resources?”
Although bootstrapping involves a risk for the entrepreneur, the absence of any stakeholder gives him or her more freedom to develop his business. Many successful businesses including Dell Computers were founded this way!
Source: Raising Capital, Andrew J. Sherman
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