Bootstrapping

Bootstrapping is "a situation in which an entrepreneur starts a company with little capital. An individual is said to be 'bootstrapping' when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.

Bootstrapping is compared to using venture capital, bootstrapping can be beneficial as the entrepreneur is able to maintain control over all decisions. On the downside, this form of financing may place unnecessary financial risk on the entrepreneur. Furthermore, bootstrapping may not provide enough investment for the company to become successful at a reasonable rate. Typically, many entrepreneurs will begin with bootstrapping, but eventually obtain sources of capital in another avenue.

Click here to read more about the "Five Rules for Bootstrapping Success" by Jim Beach, David Beasley, and Chris Hanks of Entrepreneur:

1) Get Operational Quickly

2) Understaff

3) Keep Growth in Check

4) Forecast from Bottom Up

5) Reconsider the Traditional Business Plan

You can also read and learn more about a major bootstrapping success story of Mike Carter, CEO of eGroup in Charleston, South Carolina.

Learn more about Leo's story about bootstrapping and listen about his first-hand account about how to create a successful business based on bootstrapping.