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Important Bootstrapping Techniques to
Minimize the Need for Capital:
-
Buy used equipment instead of new
-
Borrow equipment from other
businesses for short-term projects
-
Use interest on overdue payments
from customers
-
Hire personnel for shorter periods
instead of employing permanently
-
Coordinate purchases with other
businesses (mutual purchasing of goods)
-
Lease equipment instead of buying
-
Use routines to speed up invoicing
-
Cease business relations with
customers who frequently pay late
-
Offer same conditions to all
customers (that is, no expense on preferential treatment to some)
-
Buy on consignment from suppliers
-
Obtain trade credit from suppliers
-
Deliberately choose customers who
pay quickly
-
Share business premises with
others
-
Employ relatives or friends at
non-market salaries
-
Run the business completely from
your home.
Venture
Financing Funnel
Venture
Financing: Key Documents
One of the least used methods to
minimize the need for capital is constant sharing of equipment and employees
with other local businesses to reduce fixed commitments.
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References:
1. "Bootstrap
Finance: The Art of Start-ups" by Bhide, A.
2. "Who Bankrolls
Software Entrepreneurs" by Freear, J., Sohl.J.E., and Wetzel, W.E.
3. "Financial
Bootstrapping in Small Businesses: A Resource-Based View on Small Business
Finance", Winborg,J., and Landstrom.H.
4. "Angel
Investing", Osnabrugge,M.V., and Robinson, R.J.,
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