LiveCareer News - Boost Business With Bootstrapping


Boost Business With Bootstrapping
11 November 2008
 Small businesses can save money by being home-based.
With the slowing economy making it harder for budding entrepreneurs to secure finance through traditional means, some small businesses are looking to the "art of bootstrapping" to get their enterprise off the ground.

Colin Mason, visiting chair at the Sobey School of Business, wrote in Chronicle Herald Business that bootstrapping eliminates banks and external funding by using "imaginative and creative ways" of accessing capital at reduced or no cost.

This helps entrepreneurs to retain control of their company, allows them to concentrate on the business by cutting down on time spent trying to secure funding and generates a sense of fiscal discipline, he noted.

Methods of bootstrapping can include anything from sharing premises and working from home to negotiating special deals with suppliers, applying for government grants and entering business plan competitions.

Otherwise, entrepreneurs could use personal credit or delay payments to suppliers in order to postpone the need for more capital.

However, Mr Mason warned, some of these methods can be dangerous or ethically unsound and it is therefore essential that entrepreneurs apply bootstrapping in a thoughtful manner.

According to the Small Business Administration, 52% of small firms are home-based.
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