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Bootstrapping, the practice of avoiding external investors when building your business, is a popular approach for small business owners who are seeking to circumvent the current credit crunch. Here are four tips to help small business owners and entrepreneurs ease the process of bootstrapping.
1. Build your credibility. Plan ahead for your startup needs by establishing good credit. Obtain a copy of your credit report and credit score from each of the three credit bureaus to ensure the information on file is accurate.
2. Frugalize. Bootstrapping demands creativity and ingenuity. Become a master of doing more with less and cut your overhead costs down to the bare essentials. Be cautious: Every penny you unnecessarily spend cuts into your ability to succeed.
3. Become a one-man team. Manage all of the day-to-day activities and do it yourself as much as you possibly can. Even if you don’t know a lot about a particular subject matter, you can always tap an online resource, such as a social networking site, to find the information, services, and resources necessary to help grow your business.
4. Create the right mindset. Plan for success, not failure. Planning ahead for failure seems like the smart thing to do, but by removing all possibility of failure from your mind, you’ll be more likely to succeed.
Using these tips during bootstrapping will not only make the process easier, but also enable you to grow your business by reinvesting profits into your own development.
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.