How do you launch a business with little or no cash and no access to credit?
Bootstrapping means starting a business with no venture capital, no bank loans or angel investors. With bootstrapping, aspiring entrepreneurs rely on hard work and sometimes personal savings to start a business.
Ventures that begin by bootstrapping usually go through two stages:
Seed money: This comes from personal savings or by borrowing just enough money from friends and family to cover startup costs. Some entrepreneurs work more than one job to earn additional funds to support the project.
Customer funding: During this second stage, entrepreneurs reinvest any customer revenues back into the business to further its growth. Growth is usually slow, as any earned money needs to cover operating costs for the business to stay afloat.
Successful entrepreneurs provide guidance on bootstrapping a startup, from selling high-margin products and services to the importance of building partnerships. If you are still not convinced of bootstrapping’s merits, check out this list of highly profitable companies that began with bootstrapping.
Entrepreneurs embark on many different paths toward realizing their goals. Gatherings, like the sixth annual Global Entrepreneurship Summit taking place in July, offer young business leaders the chance to exchange ideas with peers and help make their dreams a reality.