Employing bootstrapping measures to grow a small firm clearly relies greatly on networks, trust, cooperation, and wise use of the firm's existing resources, rather than collecting new financial resources from outside.

→ Venture Financing Funnel

→ Venture Financing: Key Documents

Strategies for successful bootstrapping are based on the following seven recommendations:

1. Get operational quickly.  Use a copycat idea in a small target market to get a firm off the ground fast. New and bigger opportunities are certain to develop once the firm is in business.

2. Look for quick, break-even, → cash-generating products. Firms that are making money build credibility in the eyes of customers, employees, and investors. Therefore bootstrapped firms may wish to take on profit → opportunities that large firms regard as distractions.

3. Offer high-value products or services that sustain direct personal selling. Since it is usually difficult and costly to persuade customers to switch from a familiar product or service to a substitute offered by a new firm, → successful entrepreneurs usually choose high-ticket products and services where their individual → passion and → virtuoso marketing and → sales tactics can substitute for a large marketing budget.

4. Forget about the crack → team. Small bootstrapped firms do not have the financial means to afford and recruit a well-balanced management team of seasoned veterans. Reliance on inexperienced personnel is common - and not always a disadvantage.

5. Keep growth in check. Since bootstrapping supplies only limited financial means for growth, bootstrapped firms should take care to expand at a rate they can control. Too many start-ups fail because they grow beyond their financial means.

6. Focus on cash (not on profits, market share, or anything else). Because of their financial means, bootstrapped firms cannot afford to pursue a number of strategic goals. Bootstrapped firms cannot pursue loss-making strategies to build a market share or a customer base. Having a healthy cash flow is critical to survival, so their sales strategies must ensure healthy returns from the outset.

7. Cultivate banks before the business becomes creditworthy. Bank financing is usually unavailable to start-up firms, especially if little or no collateral is offered. However, bank financing is quite important for all small firms once they are established and making some profit. Keeping good books, immaculate records, and sound balance sheets from day one allows you to approach your banker with confidence once the firm has been in operation for a few years and is creditworthy.

→ 6+6 Drivers for Entrepreneurship

Step-by-Step Guide To Venture Financing

Venture Map To Financing

Would-Be Entrepreneur

The First Few Steps In the Right Direction

Startup Company

VC Is Not the Only Way

Start-up Capital Formation Process

How To Succeed in Business

7 Simple Steps to Small Business Success