Thursday, May 10, 2007 at 9:35pm by Site Administrator
A bootstrapper is the essence of a true entrepreneur, bootstrapping their business from start to success. Bootstrapping is a time-honored method of doing business. You start with minimal funds of your own, keep expenses threadbare, and borrow very little. If you borrow, you borrow it from yourself, possibly from savings, possibly from credit cards. You may eventually move to a financed state, once you’ve shown proof of concept, borrowing from friends and family and/or outside lenders.
Every cent of revenue earned is pumped right back into the operation, slowly growing the total profit, slowly improving the product or services, adding employees and/ or resources.
Bootstrapping means some serious sacrifice from the entrepreneur, and being innovative when the bootlaces break – simply because you can’t afford to replace them. You work with what you have at the present moment, and bootstrap your way to success.
The diagram at right shows the intersection of financing methods and business success. It’s illustrative, and by no means represents the relative success of any type of financing. Businesses can succeed or fail regardless of financing method. There are other factors at play.
Why Bootstrappers Are Likely To Fail
Bootstrappers do fail in business, for several reasons.
- They have little or no capital behind them, most of the time.
- They often have only an idea/ goal and passion, no business acumen.
- They have an idea of where they want to go but not necessarily a business plan. At least not initially.
Why Bootstrappers Are Likely To Succeed
But after they fail, they often succeed.
- They have no capital behind them, and thus they need to succeed. Contrary to popular belief, having loads of funding isn’t necessarily motivating enough to succeed.
- They have passion, which drives them. Passion fuels the true entrepreneur. Every mistake made early in an endeavor is a lesson learned. You can only improve from here. (I.e., make your business mistakes early.)
- If you have something to strive for, and an idea of where you want to go, that’s often more powerful than a business plan. But throw in a business plan, and you’re likely that much closer to success.
Passion and vision and action create a synergy, a need to succeed in business startups. This blog hopes to cover discussions on the various aspects of business: bootstrapping, productivity, general entrepreneurship, cash flow, creative financing methods, tools and more. Your participation in these discussions, in the comments section, is appreciated.
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