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Wednesday, February 16, 2011

Bootstrapping

The term "bootstrapping" comes from the phrase "pulling yourself up by your own bootstraps." In this case, instead of relying on financial institutions and investors. You self-finance until you have a provable operation. Then you can borrow to fund expansion. Whether you are a family business, a partnership, or a solo-preneur, you can brainstorm some appropriate bootstrapping options. Start by cutting your costs so much that you need less money to start. Here are some ideas to get you started:
  - Instead of renting office or operation space, use the spare bedroom or
    garage (don't ever use your own bedroom)
  - Use Vonage or Lingo or other internet based phone system
  - Create an inexpensive website (ask us if you need ideas), then pay
    someone to create a better site after you have cash flow
  - Outsource menial tasks to a lower-paying country
  - Suspend a sheet of plywood over boxes rather than buying a desk
  - Hire students. They want the CV experience and need part-time work,
    but cost minimum wage.
  - Buy equipment off of eBay (but remember that it is not always the cheap
    way)
  - Use freelancers rather than employees
  - Ask lots of people for advice

Years from now, when you are a mogul, you will look back and relish the bootstrapping days.

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