Though much has been written about bootstrapping a business, I’m often surprised that many people I talk to about starting a home-based business don’t understand the concept. The term refers to “pulling oneself up by one’s bootstraps” meaning to rely on your own effort and your own financing. According to Investopedia, bootstrapping is:
A situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.
I love the self-reliant nature of bootstrapping, particularly when starting and running a home-based business. There’s a big misconception that starting any business is expensive, and requires business plans, investment strategies, and business loans. The idea behind bootstrapping is that you forgo all that and use your own know-how, creativity, hard work, and money (and as little money as possible) to get up and running.
One of the biggest benefits of a nest-based company is low overhead. You’ll find many articles like this one citing “Small-business owners spend about $10,000 to start their companies, mostly out of their own pockets…” I’m so glad I didn’t have any of this info available to me when I started, otherwise I would have thought “there’s no way I can afford to start a business.” I always remind people that these types of startup costs are not typical of a home-based business.
It’s hard to know where to look for good bootstrapping advice. There are tons of resources on the inter-web on the best way to bootstrap your business, some good, some bad, and some just plain wrong. But two that I consistently recommend are Seth Godin’s The Bootstrapper’s Bible (download in PDF format), and Guy Kawasaki’s The Art of Bootstrapping (a companion post to the excellent book The Art of the Start).
Starting a business, any business, is hard work. The most important lesson that I’ve learned is to find something you enjoy, that utilizes your talents and passions, and to get started quickly and as cheaply as possible. If you love it, the work doesn’t seem as hard. And by working from home and being self-reliant, you keep expenses down, making profits so much easier to achieve.