It seems that most people expect others to finance their business. The fact being, that if you are not prepared to put your money in then why should others. Most people then give up on their ideas as they believe other don’t see the value in the business. This is not true.

The most important person who should believe in your business is a customer who is parting with their cash. This person is the top of the business value chain and is your champion, they are the customer and always always right. So find this person to help start your business.

You owe this person everything, because without them you have nothing. Even if you were able to get all the money in the world to start your business, yet had not a single paying customer then you still don’t have a business. I just have to say dot com.

Therefore, bootstrapping is the process of starting a business based on customers paying you for products and services. The profit from this sale (money) is put back into the business to fund the next round of customers. Each time you sell something you make a profit and the business builds it value. This is the way the majority of businesses start and grow. Therefore it should be a major part of your business plan, growth strategy and business launch.

When I tell people this they come back with:

So what if I need to buy some major equipment? Lease it and ensure the profit is still there based on the sales and cash flow.

So what if I need to have some offices? You can only afford offices once your cash flow provides the capacity to do so. So either hot desk or find a more cost effective solution.

So what if I need to hire 50 people and a large factory to make the product? You will have to outsource the production and pay for the completed products.

Bootstrapping allows you to own your business from the very start which means you will always be in the most powerful position when it comes to dealing with new shareholders, banks, suppliers, customers and staff.