Starting a business can be expensive.
Did you take note of the other meaning of that statement? If you read it carefully, it also says that starting a business doesn’t have to be expensive.
Most entrepreneurs have a “perfect picture” in mind when they imagine their new business. And to attain that perfect image, inclusive of a well-decorated office or retail store, more than sufficient inventory, and all the latest high-tech equipment, those entrepreneurs usually must spend a lot of effort in the beginning trying to raise money.
But did you know you can start a business without financing? Or considerably less than you imagine? Bootstrap financing has been around for years, and many smart entrepreneurs got started this way. Why? There are many reasons, including:
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No Investors – Investors can be great when you need money. But you have to answer to them about your profits (or lack thereof), and they can also get involved in the decision-making of your business.
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Save money on interest – Without investors or loans, you save considerable money on interest expenses.
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Valuable market experience – By making sales to help finance your business, you get to focus on actual business activity and gain valuable information about your market and industry.
What is bootstrapping? Entrepreneurs who bootstrap use their own resources as much as they can to help their business. Not only do they try to use their own funds, but smart bootstrappers get businesses going in money-saving ways.
For example, say you wanted to start a nice restaurant. It would take a considerable six-figure capital amount to get the business built even before you made your first plate of pasta. But a bootstrapper will start small, like opening a catering business. By collecting deposits upfront, a catering entrepreneur could work out of a friend’s industrial kitchen and never have to put any money into the actual operation of the business. Job by job, and by saving frugally, the catering entrepreneur could eventually have enough money to open his or her own restaurant – as well as a built in client base.
The key is to have a big picture, but start small. Sell products on eBay. Use affiliates to help make sales. Bootstrapping is a smart way to begin and grow business without gathering a tremendous obligation to pay back investors and banks. Get your business started today with bootstrapping, and the money you earn will go right back into your business.
