Bootstrapping means starting a business with little to no capital from outside investors – by lifting yourself up by your own bootstraps.

This usually means relying on your personal income and savings to fund your startup. Many of the world’s largest, most highly successful corporations, (Apple, Dell, and Coca-Cola to name a few,) started with small personal investments from their founders.

In fact, Paul Aldrich, the founder of Yankee Candle, started the company on just 20 dollars borrowed from a close friend. It goes to show that you do not need a lot of money to make a profit. Over 90 percent of businesses begin without funding from external sources and there is a good chance that you are in this majority.

Why Should Entrepreneurs Bootstrap?

So, why do so many entrepreneurs start businesses with no outside funding? Simple. It’s difficult to find investors for your company, and many new businesses just do not have any other choice but to fund themselves. Seeking investors can take several months. It would take a load of time, money and effort that you may not be able to afford in the beginning stages of your business.

On the other hand, some startup owners are capable of acquiring funding but instead choose a business model that revolves around making the best of less startup capital.

One reason entrepreneurs choose to bootstrap is to maintain complete control over their new business. Accepting funding from outside investors dilutes your freedom to make the best decisions for the growth of your company. With no outside influences, you can avoid compromising in the best interests of investors and concentrate on progress.

Bootstrappers have the ability to pivot, or experiment with different business models, manufacturers, sources and techniques at a moment’s notice. Without investor influence, you can change your mind and try something new as soon as you realize your current plan is not working. Since you will be starting small, any mistakes you make at the inception of your business will also be small.

How To Make Bootstrapping Work For Your Business

Entrepreneurs who use bootstrapping to fund their startup (almost all of them,) have to find creative ways to use their money and stretch it the furthest. Your hard-earned cash has a greater value to you, so you will be more inclined to utilize management techniques that cut costs. Bootstrappers need to invest wisely in suppliers and materials to create the best product or service for the lowest cost. Your expenses will be low from the very start, maximizing your profit margin even as your business expands.  

  • Reach out. While you can start a business without outside funding, outside advice and help should always be welcome. Consult small business owners in your community, and enlist the help of family members and friends when you can. Being sociable is a cost-free way to raise awareness about your startup and learn from those who have experience starting successful businesses.
  • Lease, don’t buy. Whenever possible, lease your equipment instead of purchasing it. This will largely cut costs while assuring that you will have the equipment you need to start your business. You may need to shop around for the best rates.
  • Grow slowly. When you start to experience success at the small scale, it can be tempting to take out loans to speed up the growth of your business. When you grow your business at your own pace, you can catch scaling issues early on and enjoy a smooth transition to a larger, more profitable business.

If the inability to acquire funding has held you back from starting your own business, bootstrapping might be your solution. The amount of startup funding available to you does not determine your success. Your ability to make the most of your cash with creative solutions and a solid business idea mean much, much more.