How to bootsrap
By Venuri Siriwardane | Sep 20, 2010
Ask an MBA how to start a business, and they'll likely tell you to craft a business plan, pitch it to investors, secure a healthy dose of initial funding and start cranking the PR engine. But the reality is that most entrepreneurs just use homegrown ideas to take their start-ups to the next level — without much help from the venture capital circuit.
Bootstrapping, or the art of building a business with little or no money, is the most common way to start a company. Most are launched with $10,000 or less, according to a Wells Fargo/Gallup study. And some, such as Apple and Dell, became industry juggernauts, dominating their sectors and reaping billions of dollars in revenue — with $1,000 or less to start off with.
The appeal of bootstrapping is simple: freedom.
"When you raise capital, it's not uncommon to end up selling your soul for a pile of money," says Greg Gianforte, CEO of RightNow Technologies and author of the book, Bootstrapping Your Business: Start and Grow a Successful Company with Almost No Money. "The biggest benefit of bootstrapping is that, in the end, you own the business and you end up with the fruits of your labor."
To get your start-up off the ground — without investors watching your every move —you'll need to build a culture that inspires creative money-saving tactics, attracts talented employees who will work for less, and controls cash flow to keep the lights on until you achieve profitability. Here's some tips to get you started.
How to Build a Bootstrapping Culture: Make Everyone a Bootstrapper
When hiring an employee, don't just focus on technical skills and experience. Find out if he or she has a bootstrapping temperament, says Peter Cobb, senior vice president of eBags, the Denver-based online retailer of bags, luggage and other accessories.
"It's important that they share the