Bootstrapping

You better believe you have to become a bootstrapping artist if your small business is going to survive. You have to learn to improvise, make things up as you go along, innovate, create and adapt.

One of the areas that will require the most bootstrapping is money (currency, capital, revenues, whatever you want to call it). For some small business people, raising money is as simple as getting a venture capitalist to fund their initial start up (and maybe even continue to pump money into the business as it progresses). But the trouble with venture capitalists is that they often own a big piece of the business and you can’t get rid of them. They often want to sit on the board, dictate business strategy, and otherwise tell you how to run the show. There is nothing wrong with this. It is just that for some small business people, it is not how they want to run their business. They want to call the shots.

Calling the shots, therefore, will mean bootstrapping. How can you raise money without a venture capitalist? Strong marketing, more sales, higher revenues? Tapping personal assets like retirement accounts and real estate? Leveraging? Selling the family jewelry? Getting a loan from the SBA (Small Business Association)? Operating in the red till it turns green? Whatever the plan, it’s called bootstrapping. Small businesses will have to do at least some of this, if not a lot, given the situation right now in the economy and with the banks.

Do you know that many entrepreneurs consider themselves bootstrappers? Look at Google. Sergey Brin and Larry Page did not use venture capitalists to fund Google. They bootstrapped. They economized, used equipment they already owned, tapped their credit cards for funds. They did not go to venture captitalists. Now look at them?

Other entrepreneurs bootstrapped by offering equity stakes in the company in lieu of having to come up with cash for products and services they needed in the start up phase of the business. But sometimes, when you are starting with "nothing," you don't have a choice. You either get a venture capitalist, or you find ways to bootrap.

The great thing about today's reality, is that you can start a business from any Starbucks. You don't need a fixed office for most types of businesses, so you can save a ton of money right there on overhead costs (one of the biggest expenses for startups). If you have a laptop and a cell phone, that is literally all you need. You can literally be sitting in the sculpture wing of the Metropolitan Museum of Art while communicating with customers in Tel Aviv or Mumbai. That is bootstrapping right there at it's most glorious.