BS8

NEW VENTURE CREATION : WHAT DOES BOOTSTRAPPING IN BUSINESS MEAN ?

BOOTSTRAPPING IN BUSINESS MEANS STARTING A BUSINESS WITHOUT (MUCH OF) EXTERNAL HELP OR CAPITAL.

IT REFERS TO TECHNIQUES FOR GETTING BY ON AS FEW RESOURCES AS POSSIBLE AND USING OTHER PEOPLE’S RESOURCES WHENEVER FEASIBLE.

FUNDING STARTUPS THROUGH BOOTSTRAPPING  INVOLVES BEGGING, BORROWING, OR LEASING EVERYTHING NEEDED TO START A NEW VENTURE AND IS THE ANTITHESIS OF THE « BIG MONEY MODEL » ESPOUSED BY THE WALLSTREET BIG BOYS WHEN THEY TALK ABOUT ENTREPRENEURIAL VENTURES.

BOOTSTRAPPING IS A MODEL FOR STARTING A BUSINESS WITHOUT MONEY – OR AT LEAST WITHOUT ANY MONEY BEYOND THAT PROVIDED BY THE ENTREPRENEUR’S PERSONAL RESOURCES.

ALTHOUGH THERE ARE LOTS OF WAYS ENTREPRENEURS CAN BOOSTRAP, SOME GREAT BOOSTRAPPING TECHNIQUES  ARE :

  • BARTER FOR MEDIA TIME.
  • USE STUDENT INTERNS AND HIRE AS FEW EMPLOYEES AS POSSIBLE.
  • SEEK WAYS TO MOTIVATE EMPLOYEES WITHOUT MONEY.
  • MANAGE RECEIVABLES WEEKLY.
  • LEVERAGE PURCHASE DISCOUNTS.
  • SEEK VENDOR CREDIT.
  • KEEP OPERATING EXPENSES AS LOW AS POSSIBLE AND LEASE OR SHARE EVERYTHING.
  • NETWORK TO FIND COMPEMENTARY RESOURCES THAT CAN BE SHARED OR LEVERAGED.
  • PUT RESOURCES INTO THINGS THAT MAKE MONEY RATHER THAN USE MONEY.

BOOSTRAPPING TACTICS IN THOSE TIMES OF CRISIS MUST BE ENCOURAGED TO ENABLE A NEW VENTURE TO SURVIVE AT STARTUP AS LONG AS THEY LEAD TO BUSINESS PRACTICES THAT ARE SOCIALLY RESPONSIBLE AND ETHICALLY ACCEPTABLE.

PHLDUCX