Bootstrapping 101: The Ultimate Guide to Being Self-Funded

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If you have an amazing business idea and dream of running your own operation, you shouldn't let anything stop you. However, not all entrepreneurs are eligible for a small business loan. If you have poor or little credit, you may have a hard time getting approved for startup funding. 

Fortunately, traditional business loans aren't your only option. In fact, if your business is small enough and doesn't require a ton of overhead, there's no reason you can't fund the startup yourself. This is also called bootstrapping and it can provide a ton of benefits. 

Want to know more about bootstrapping businesses? Keep reading for everything you need to know about self-generated funds for startup capital. 

What is Bootstrapping? 

Bootstrapping a business, as hinted at above, means investing your own personal finances into your business to get it off the ground. It comes from the old adage of "pulling yourself up from the bootstraps." While carrying some inherent personal financial risks, bootstrapping is a completely viable way of starting a business, provided you are in a position to do so. 

Bootstrapping Benefits 

One of the biggest benefits of a self-funded startup is that you won't have anyone to answer to other than yourself. That's not to say that you shouldn't create a board of advisors or be open to other perspectives. However, when bootstrapping a business, you're not held accountable to other shareholders, investors, etc. 

Just as importantly, you won't have to worry about monthly business loan payments to the bank or investor. Even if you were able to get a business loan and your business tanked, you would still be personally accountable for paying back that money. 

How Can Your Business be Self-Funded? 

Now, let's talk about how you can get self-generated funds for your startup hustle. Typically, bootstrapping your business means starting small and allowing your success to dictate your business growth and expansion. 

First, if you have personal savings, this is a good time to use them. Depending on how much you need and the amount of money you have in savings, you may or may not need to drain the accounts. 

If you need more money than your savings account can provide, you can also: 

• Sell personal possessions 
• Downsize your house 
• Downgrade your car 
• Take out a personal loan 
• Use a credit card 
• Use initial pre-opening sales 
• And more 

You may need to get creative to procure the amount of funding you need for your startup. Just remember to start as small as possible and take it slow. 

Finally, take steps to protect yourself. Once the business is started, separate your business finances from your personal finances. Additionally, check out this site to help protect your accounts from identity theft. 

Looking for More Information on Bootstrapping Your Business? 

As you can see, bootstrapping your business isn't out of the question. Furthermore, it can be incredibly beneficial. If you think your start-up can be self-funded, there's no reason why you shouldn't take this bootstrapping business option. 

For more information on bootstrapping and advice on running a small business, check out some of our other articles before you go. Our entire website was designed to help entrepreneurs like you create a thriving business without breaking the bank. Bootstrapping your business is best for the bold!

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