ABSTRACT
This chapter summarizes some of the common bootstrapping techniques used by entrepreneurs. Many entrepreneurs bootstrap because they want to keep 100 percent of the ownership in their own hands. Using bootstrapping to reduce the need for debt financing reduces the risk the business faces during difficult economic times when sales may become soft, inflation heats up, or interest rates climb. Many entrepreneurs find that bootstrapping techniques used during start-up actually create a more effective way to run the business even as it grows. Bootstrapping overhead can lower the point of breakeven effectively and thus reduce the amount of cash required to start a business. The chapter examines common methods for reducing overhead expenses without necessarily sacrificing the company’s ability to perform the administrative functions it needs to operate. Several bootstrapping techniques are available for businesses that manufacture products. Manufacturing companies can also use inventory management to bootstrap their businesses.
