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Small Business Bootstrapping Techniquesby Stefan Töpfer on Oct 01, 2007I often refer to “bootstrapping“, when I talk about small business, you may very well be asking “What the hell is bootstrapping?” To put is simply, bootstrapping is the art of running a small business with no or very little money and/or funding. So if you are thinking about starting, growing or running your small business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses, but are worried about if you can be successful, worried about failing, worried about giving up your job, etc. than bootstrapping is for you. Especially if your aim is to build a personal business, like contractors, freelancer, self-employed, sole-trader and virtual assistants, working from home, creating an income and keeping it small and manageable, then bootstrapping is definitely for you. There are more than 18 million small and home businesses in the US alone, self-employed working is gathering pace in all areas of business. If you look around you you will most probably know many people working from home, or doing contract work, freelancers and so on. One very unpleasant outcome of a small business venture is the failure thereof. Bootstrapping will mitigate any fallout from a business failure. Remember that business success often comes with experience and experience comes form making mistakes – bootstrapping will allow you to make mistakes and recover from them. Here are a few bootstrapping facts to consider if you wonder if bootstrapping is for your:
It is never too late to start with bootstrapping even if you have been running your small business for years. So have a look at it and build a stronger, more secure small business for yourself. When are you going to start bootstrapping? ST. Related Items: 
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Said on October 1st, 2007 at 3:40 pm
With bootstrapping, if the business fail it doesn’t really hurt that much because you start with just small capital and it can be replace in no time unlike in multinational companies once it fails everything will be affected from the shareholders to employees.
Of course we wouldn’t want our business to fail, SME or multinational, we want our business to grow but running a business also means you are ready for the possibilities of failing. It is just a matter of following your business plan.
Said on October 2nd, 2007 at 1:09 pm
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 9th, 2007 at 6:42 pm
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 9th, 2007 at 7:35 pm
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 11th, 2007 at 3:15 pm
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 12th, 2007 at 7:05 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 14th, 2007 at 8:36 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 15th, 2007 at 7:16 pm
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 16th, 2007 at 11:22 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 16th, 2007 at 1:37 pm
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 18th, 2007 at 9:28 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 18th, 2007 at 10:52 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 24th, 2007 at 10:13 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on October 26th, 2007 at 9:28 am
[...] Web Worker Daily has a piece on getting yourself off those annoying mailing lists, he uses a company called ProQuo.com, which is still in Beta and it is free, so definitely something for the regular bootstrapper. [...]
Said on October 26th, 2007 at 9:28 am
[...] bootstrapping (cutting costs), it all means the same for any small business and start-up business, like SOHO-, SME, SMB-, Micro-, [...]
Said on October 29th, 2007 at 9:22 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on November 1st, 2007 at 9:29 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on November 4th, 2007 at 10:24 am
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on November 13th, 2007 at 12:18 pm
[...] Small Business BootstrappingHow to start your own small business with no or little money. [...]
Said on February 28th, 2008 at 4:51 pm
[...] from home and using bootstrapping techniques will save you money and help your small business to stay afloat. But you will need some [...]
Said on April 10th, 2008 at 11:10 pm
the internet has allow the bootstrapper to go to a whole new level. It does not mean you can’t realise real profits either.
Said on April 20th, 2008 at 9:12 pm
Bootstrapping is great also because with success does not come huge expenses that can’t be endured with the ups and downs that come with any industry. The choice to remain low cost is a smart one.
Said on April 22nd, 2008 at 12:53 pm
Another good point is that without business financial commitments you can concentrate getting the sales to grow your business without the worry of paying the bills. This is especially the case if you start a home business.
Said on May 23rd, 2008 at 7:17 pm
I agree that it might make sense to ‘bootstrap’ when you’re just starting out, but doesn’t it also make sense to consider whether you have access to good financing opportunities? I think anyone who’s running a small business for a certain period of time should at least familiarize themselves with what’s involved in obtaining money from banks or alternative sources before deciding that they’re not interested in taking out a small business loan.
Said on May 24th, 2008 at 8:55 am
Hi Kerry,
Getting a loan – from whom ever – is a risk, whichever way you look at it. In my opinion and experience it is always better to bootstrap the business and grow without a loan.
It is also the better option if things go wrong, since often you have to personally sign and be liable for the borrowed money.
– Stefan
Said on May 27th, 2008 at 11:38 pm
STEFAN: I fully agree with bootstrapping. That said, I’ve seen too many entrepreneurs focus way too much on saving a buck instead of increasing their sales and opening up more opportunities for themselves.
Bootstapping is fine, as long as you don’t lose sight of the fact that when the company is young and tender, sales at the best possible gross margins have to be achieved as soon as possible.
Cordially / Carlos.
Said on May 28th, 2008 at 8:53 am
Carlos,
Thank you for your comment. You are right of cause when you say sales are important. It is one of the cardinal rules of bootstrapping that any growth is based on the cash-flow of sales. This eliminates costly mistakes. You can only grow when you are generating sales, it is bad practice to borrow money and hoping you will get the sales.
– Stefan
Said on July 14th, 2008 at 6:08 pm
I like how you reffered to bootstraping as an art. It seriously is. I have found that the biggest challenge is to start a business with no money down. I mean $0! Can you do it? Can someone start a business with $0 investment and make money? This is the stuff they should be teaching people struggling to get their MBA’s
Said on July 18th, 2008 at 8:40 pm
I like what you said here “Bootstarppers don’t follow the herd.” I think too often people see success and try to emulate what the other guy did. More often than not that train has moved on. To be successful as a small busines owner you have to be creative, stay focused, and be realistic with your goals. I have never thought of this as bootstrapping per say. But, the term truly paints a mental picture that gets your point across.
John Tasher
Said on July 29th, 2008 at 4:43 am
I totally agree that bootstraping is a must, but I can also see how small business would require additional funding for equipment, supplies, ect., that will take their sales levels to the next level. Small business owners need to research all options that are available and make a educated decision only after they have exhausted all possible options.
Said on September 8th, 2008 at 4:03 pm
bootstrapping techneque is the best one to run and start a new business with low finance…..
Said on September 8th, 2008 at 4:05 pm
Another good point is that without business financial commitments you can concentrate getting the sales to grow your business without the worry of paying the bills. This is especially the case if you start a home business.
Said on October 13th, 2008 at 3:16 pm
it used to be, many eons ago, boot strapping was the only way to start a business. You started the business, sold like a mad man, and grew based on the sales. My uncle starting an insurance business this way. he sold policies out of the trunk of his car for many years. After about twenty years he sold out to a large insurance firm…he does not work anymore and neither do his children. Today the cost of living is so high that people starting a small business need immediate income. So, they try to get outside funding to hit the ground running. It does not always work out the way they want it too.
Said on November 7th, 2008 at 3:31 pm
Yes boot straping is best technique to generate a new idea….
Said on November 18th, 2008 at 2:09 pm
“Remember that business success often comes with experience and experience comes form making mistakes – bootstrapping will allow you to make mistakes and recover from them.”
I have had a few failures on my quest in building a small business. I have had a few false starts and a few ventures that never got of the ground. But, I have learned from each and every one of them. Using the bootstrapping technique as you outlined above does indeed allow for both success and failure.
So, the statement I quoted here is the one that rings the most true for me. You have to keep on trying. Don’t put all your eggs in one basket. And when you find the goose that lays the golden egg, nurture it. Eventually you will find another and then another, eventually you will have a gaggle of geese. Just never give up and never believe the is only one way to do every thing.
Said on November 18th, 2008 at 2:22 pm
I have had many false starts and many no starts in my quest in finding a business that will help me become financially independent. What has enabled me to follow so many different trails has been “bootstrapping”. keeping my costs as low as possible. You are dead on here.
Said on November 19th, 2008 at 11:00 am
If you can start any business with zero outlay, the only way you can go is up, and there is no way the buiness can fail…What do you have to loose ?
Said on December 1st, 2008 at 11:08 am
We see many start up businesses and very few have the kind of capital needed to make a successful start and to grow the business in its first years, the problem is these buisneses also have very little knowledge of starting a business with little capital either.
Said on December 5th, 2008 at 3:30 pm
It is my believe that you do not need money to start a business, you often already have what you need, computer, broadband. The most important resource is time.
People do not value their time enough, stop wasting it on non-core activities, focus, focus… focus.
Stefan.
Said on December 18th, 2008 at 8:39 am
Thanks for the info… The internet is a bootstrappers dream. I’ve started an built up a traditional business and have been working on a web based business for a couple years now. What a difference. You mentioned the unwanted result of business sometimes being failure, some statistics say %95..
Keeping costs low makes it easier to stay in the game.
Said on December 18th, 2008 at 12:07 pm
You are welcome – but bootstrapping is more than only internet based, it works for all kinds of businesses in all kind of situations.
Registered for the RSS feed from your blog BTW, I like your blog – great resource for small business.
Thanks for the comment.
– ST.
Said on February 23rd, 2009 at 6:29 pm
Great article, and very interesting comments. Although bootstrapping is obviously not for everyone, and certainly may not be a long-term small business strategy, your article was very insightful and the debate following extremely interesting to read. Thanks!
Said on February 24th, 2009 at 12:39 pm
Great article, I think it is best to start a business this way but mostly you can only do that when your business is concerned with providing services!
Said on July 1st, 2009 at 5:44 pm
I guess I am a “bootstrapper”. Starting a small business is a bit of a challenge especially when doing so with no money and no income. Every beginning is difficult but when you get the hang of it and get some income coming in things do get better. Then again, if you are starting out you do need to invest money back into the money making process. Patience, resilience and determination. Great post…
Said on August 12th, 2009 at 5:13 am
Great article, I believe bootstrpping is the best way to start a business as it makes you as an entrepreneur get creative and think out of the box.
Said on August 26th, 2009 at 12:08 pm
I never ever heard about that technique of bootstrapping but it seems to be great, thanks for sharing that kind of interesting and useful info ! Really great !
Said on September 21st, 2009 at 1:23 pm
Yes, along with these techniques Advertising is also important because the largest category in your advertising budget is likely to be your media costs–the dollars you spend for air time on radio or for ad space in newspapers, magazines, and more.
Said on October 19th, 2009 at 3:56 pm
Bootstrapping is perfect for the new business start-up that is ’strapped’ for cash and esures that the company owners are careful with cash-flow and outgoing expenses.
Said on March 23rd, 2010 at 2:25 pm
A convincing argument for starting a business even when on a budget. Great post.
Said on April 3rd, 2010 at 11:48 pm
Great article! I started my business with £50. I managed to get online, set up a website, buy business cards and letter heads and still have cash left over. I’m so glad I did, as I could well have spent £500 or even £5000 and not really achieved all that much more. Bootstrapping is perfect if you want to keep it fairly small and manageable.
Said on April 15th, 2010 at 4:14 pm
You mentioned outsourcing as a method to bootstrap – total money saving option. Just about any service can be done through virtual assistance, keeping costs low.
Said on May 3rd, 2010 at 1:28 pm
This internet has really changed the landscape of business, requiring little more than a website and some ideas to get started with – which I am very grateful for!
Said on July 5th, 2010 at 7:25 pm
bootstrapping rocks for those that know how to work it!! Thanks for the tips
Said on July 12th, 2010 at 8:56 am
bootstrapping is best for the people like me, cause we are in the third world country. we don’t have much money to spent on it, thanks for your post.
Said on August 2nd, 2010 at 8:15 am
I never ever heard about that technique of bootstrapping but it seems to be great, thanks for sharing that kind of interesting and useful info ! Really great !
Said on August 5th, 2010 at 2:14 pm
Bootstrapping is one method to keep the cost of a start up business very low. In common business lingo, bootstrapping means using your personal funds in order to finance the business. You may start the company with your own savings; as the business grows, you will spend only the company’s profits to continue expanding operations. This is in stark contrast to methods of financing that involve investors or loans. Bootstrapping has several advantage over these methods.
Said on August 7th, 2010 at 12:49 am
I guess bootstrapping is not really hard to do. I’ll just make sure that I follow your facts and I am off to go, right?
Said on August 8th, 2010 at 12:45 pm
I guess boot strapping is what we are doing now for our startup, although we invested a bit more than $50. We’ve have had to buy in stock though so not much we can do there.
Maybe bootstrapping is more a state of mind than it is to do with cash? The ability to do a lot yourself, pick up aspects of skills you need to complete a task and then get back into selling/making/building/consulting, ie. what you do to bring in the money. One blog I follow written by the CEO of a startup refers to being scrappy. I think being scrappy/bootstrapping do lower the risk of starting up.
Interestingly, some programmers refer to “bootstrapping” themselves to a new language. ie. Learn C properly and the learn PHP on the fly
Simon