| u need to start or grow your business but have little | | | | shipping label. Advantages include no warehousing, |
| money? Before you look to banks and similar sources | | | | shipping, or inventory costs. |
| of financing, why not bootstrap your way to business | | | | 4. Use Your Customer`s Money |
| success? | | | | Selling memberships, subscriptions, gift certificates, and |
| A bootstrap is a small loop of leather or other material | | | | coupon books are just a few ways of getting your |
| that is found on the top rear or sides of a boot. The | | | | clients to pay upfront. Obtaining advance deposits and |
| purpose of the bootstrap is to help you pull your boot | | | | retainers from your customers can help finance your |
| on. | | | | business operations and reduce or eliminate the need |
| In business, bootstrapping has come to mean helping | | | | for bank financing. |
| oneself without seeking outside help. It means using | | | | 5. Licensing |
| your own resources to finance, promote, and develop | | | | Instead of trying to finance the manufacturing and |
| your business. | | | | marketing of your invention, which could cost millions of |
| Here, then, are some ways of financing your own | | | | dollars before you have your first sale, why not license |
| business by using your own initiative and depending | | | | it to a company with the necessary expertise and |
| less on outside bank financing. | | | | capital? You will then receive royalties in return for |
| 1. Operate a Home-Based Business | | | | your idea. |
| Operating your business from home could save you a | | | | 6. Other Bootstrap Financing Methods |
| fortune. First of all, you eliminate the costs of | | | | Aggressively control costs, barter, get extended terms |
| expensive commercial rent, commuting, et cetera. | | | | from suppliers, establish strict credit and collection |
| As well, your business use of home expenses would | | | | policies and procedures, rent (or lease) instead of |
| be deductible for income tax purposes. Since your | | | | buying equipment, buy used equipment instead of new, |
| home is your base of operations, your travel and | | | | sell off excess inventory and equipment, obtain free |
| automotive expenses from your home to clients would | | | | publicity instead of paying for advertising, and do |
| be deductible. | | | | whatever else is necessary to generate cashflow and |
| 2. Accept Credit Cards | | | | profits. |
| Rather than financing receivables and assuming the | | | | In these ways and many others not listed here, you |
| risk for bad debts, why not accept credit card | | | | may be able to start and grow your business |
| payments? | | | | successfully with very limited capital. Thus, you will |
| 3. Drop Ship Products | | | | avoid having to obtain expensive debt or equity |
| Rather than financing and stocking inventory yourself, | | | | financing. |
| consider drop shipping. | | | | Many who were unable to obtain financing from any |
| With drop shipping, when you make a sale you contact | | | | other source have successfully bootstrapped their |
| the manufacturer or authorized distributor who ships | | | | way to business success. |
| the product to the customer with your invoice and | | | | |