'Bootstrapping' To Finance A Startup
Written by Jenna Weiner
Making sales right from the start can both fund a business and establish it in its market.
The reticence of banks to lend to small businesses has been all over the news. For entrepreneurs, this has become one of the largest obstacles to starting a successful business. However, a recent USA Today piece suggested that one of way of financing a business may be the most obvious - to start making sales.
The expression "pull yourself up by your bootstraps" succinctly summarizes the method proposed in the article. By beginning to produce profit through business endeavors, entrepreneurs can not only gain money but also gain experience.
"Instead of opening a restaurant, begin with small-scale catering or being a private chef," USA Today suggested. "Instead of opening a dress shop, launch an eBay store or conduct in-home sales parties. Developing a new product? Build a few prototypes and start selling." The article added that trade shows can be an effective platform for launching initial sales.
The technique helps entrepreneurs to hit the ground running, by focusing on business strategies rather than the task of raising money. The real-world experience in the market that can be gained through the process may turn out to be invaluable.
An earlier USA Today piece pointed out that bad economic times shouldn't be discouraging for entrepreneurs - they may be the best time to start an eventually profitable small business.
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