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Bootstrap Financing – Dead End Or Doorway to Small Business Success?

Bootstrap Financing - Dead End Or Doorway to Business Success?

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Have you heard of bootstrap financing? Many of us have heard of the terms “bootstrapping” and “shoestring start up”, but few of us understand how to make it work for us. Is it possible to have small business success by bootstrapping — or is it just a dead end? Let’s take a closer look at this largely overlooked and under utilized form of business start up funding.

What Exactly is Bootstrapping?

Bootstrap Financing is a complete financial management system for starting and building a brand new business, without the assistance of loans, the misuse of credit cards or blowing your life savings.

There are many misconceptions, and even more misinformation about this business financing strategy. I should know because I talk to clients everyday that either, (1) have never heard of it, or (2) just don’t how to make it work for them.  As a Start Up Efficiency Consultant, I teach budding entrepreneurs how to reduce their start costs and ongoing operating expenses through the use of my 3 step bootstrap financing system. This system doesn’t require:

  • borrowing against the value of your home’s equity;
  • taking money from family and friends
  • the misuse of credit cards.

What’s even better, you can employ this system, even if you have very little money to start, poor credit or don’t own your own home. You just don’t hear many “experts” extolling this form of business start up funding.

Why Should I Consider this Funding Strategy?

Many new entrepreneurs choose this method of business start up funding by necessity. If you have very little money, poor credit or don’t own a home, bootstrapping is usually your only option. Even if you’re not in this situation, it just makes plain good sense not to borrow money if you don’t have to.

Can I Really Start a Successful Small Business Without Debt?

Absolutely! Again, I cannot stress enough that small business success with this financing strategy is all about the system of bootstrapping that you use, and not just the means employed. Do not attempt bootstrapping unless you have a proven system in place. If you do, your chances of failure are great. Here is what you need:

  • business plan, specifically for a bootstrapped business
  • cost reduction plan for start up costs and operating expenses
  • alternate income streams to fund your reserve account
  • employ effective cash flow management strategies

Get Started Today!

As you continue to pursue your dreams of small business success, be sure to conduct thorough research. Don’t take all “expert” advice! Make sure that the advice you do take makes common sense. Bootstrapping isn’t rocket science, but it does go against the main stream adage of “borrow, borrow, borrow” or “buy now, pay later”.   As you plan for building your business, do not make plans to build a house of cards upon a mountain of debt! Instead, build a successful small business upon a sure and firm foundation. In doing so, you’ll soon discover that bootstrapping is truly the doorway to long-term business success!

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Source by Kimberly Kelly

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