In business, bootstrapping is a term that describes the minimalist approach to starting a new business, where the business owner uses their personal funds rather than outside money for the initial startup. To launch their business, a bootstrapping entrepreneur may use their personal savings, customer funding, or sweat equity—the exchange of services for a non-monetary benefit (like shares). The term “bootstrapping” comes from the colloquial phrase, “pulling yourself up by your own bootstraps,” which means achieving success on your own, without assistance. 

There are a few advantages for bootstrappers, such as: 

1. __Lower financial risk__: Side-stepping the costs of hiring expensive services to build your business is an exercise in efficiency and frugality, and can mean spending less of your own money on day-to-day expenses. 
2. __Full control__: Without allegiance to investors, business owners are free to call the shots of their own business and make all of their own decisions. 
3. __More time__: When you start your own business with your own resources, you don’t need to spend time securing venture capital, which gives you more time to focus on the core elements of your company. You’ll be able to devote time to building relationships with your customers, who are the major financiers of your business. 

The bootstrapping process is not without its challenges. Some disadvantages of bootstrapping include: 

1. __Issues with cash flow__: Not receiving upfront money from venture capitalists may allow you to wield more control, but you may not have access to enough money if initial sales don’t meet your projections. While some small businesses can manage this issue, larger companies may have a problem accessing the funds they need to profit and support their [entrepreneurship](https://www.masterclass.com/articles/how-to-succeed-in-business-5-strategies-for-entrepreneurs). 
2. __Takes time__: Bootstrapped businesses can take a while to get off the ground due to the lack of helpful resources that investment capital can provide. While this may be acceptable to those who already have day jobs, it can be a long wait for those going all-in on their creative business ventures and may even increase debt in the end. 
3. __High risk of failure__: Many factors can go awry when [starting a business](https://www.masterclass.com/articles/sara-blakelys-tips-for-starting-a-business), and taking on most of the responsibility yourself can lead to a higher risk of failure. While you may save money and retain control through the bootstrap process, the onus falls on you (and your co-founders, if any) to keep everything afloat—which can be challenging for new entrepreneurs or those with limited experience. 

Bootstrapping is a challenging endeavor that can be worth the investment. For a few ways on how to bootstrap a business, see below: 

1. __Make a business plan__. A [business plan](https://www.masterclass.com/articles/what-is-a-business-plan-learn-how-to-write-a-business-plan-in-8-steps) with a clear goal can help keep you focused on the main goal while also keeping track of all the smaller details that may slip through the cracks. 
2. __Start small__. Depending on your available savings, bootstrapping a big idea may not be feasible. However, you can start with ideas on a smaller scale—products or services that provide a quicker turnaround, like an [e-commerce](https://www.masterclass.com/articles/ecommerce-explained) store. Choose a venture you can do from home that won’t initially require a large amount of expensive equipment or rental space. 
3. __Barter__. To cut down on monetary costs, try bartering products or services (of equal value) with another business. 
4. __Be ready to multitask__. As the creator of a business, you should be prepared to wear many hats. You may not have the funds to hire employees or assistants at the earlier stages of your business, so every element of your business becomes your responsibility. 
5. __Conduct market research__. Before starting a business, you should be well-versed in your chosen field. Conduct surveys to better understand your venture’s dynamics and prepare yourself for all the pitfalls associated with this particular type of business. 
6. __Create a presence__. Establish a website that clearly and passionately defines your business. Use [blog posts](https://www.masterclass.com/articles/how-to-write-a-blog-post), social media, and digital marketing techniques to boost your online presence and expand your reach. 
7. __Show confidence when selling__. Be passionate about your endeavor, and make sure others can see that passion. Unwavering confidence is a necessity for entrepreneurs. Consumers buy from companies they trust, and this display of confidence will signal that your business is trustworthy, which can translate to revenue. 

Get the [MasterClass Annual Membership](https://www.masterclass.com/) for exclusive access to video lessons taught by business luminaries, including Sara Blakely, Chris Voss, Robin Roberts, Bob Iger, Howard Schultz, Anna Wintour, and more.
The bootstrapping business model takes a particular savviness and know-how to pull off successfully. However, a successfully bootstrapped business can offer high-reward for those willing to dig their heels into the process. 


The bootstrapping business model takes a particular savviness and know-how to pull off successfully. However, a successfully bootstrapped business can offer high-reward for those willing to dig their heels into the process. 


How to Bootstrap a Business: Pros and Cons of Bootstrapping

In business, bootstrapping is a term that describes the minimalist approach to starting a new business, where the business owner uses their personal funds rather than outside money for the initial startup. To launch their business, a bootstrapping entrepreneur may use their personal savings, customer funding, or sweat equity—the exchange of services for a non-monetary benefit (like shares). The term “bootstrapping” comes from the colloquial phrase, “pulling yourself up by your own bootstraps,” which means achieving success on your own, without assistance.

What Is Bootstrapping?

There are a few advantages for bootstrappers, such as: <ol class="mc-m-4"><li class="mc-my-4"> 1. Lower financial risk: Side-stepping the costs of hiring expensive services to build your business is an exercise in efficiency and frugality, and can mean spending less of your own money on day-to-day expenses. </li><li class="mc-my-4"> 2. Full control: Without allegiance to investors, business owners are free to call the shots of their own business and make all of their own decisions. </li><li class="mc-my-4"> 3. More time: When you start your own business with your own resources, you don’t need to spend time securing venture capital, which gives you more time to focus on the core elements of your company. You’ll be able to devote time to building relationships with your customers, who are the major financiers of your business. </li></ol>

3 Advantages of Bootstrapping a Business

The bootstrapping process is not without its challenges. Some disadvantages of bootstrapping include: <ol class="mc-m-4"><li class="mc-my-4"> 1. Issues with cash flow: Not receiving upfront money from venture capitalists may allow you to wield more control, but you may not have access to enough money if initial sales don’t meet your projections. While some small businesses can manage this issue, larger companies may have a problem accessing the funds they need to profit and support their <a href='https://www.masterclass.com/articles/how-to-succeed-in-business-5-strategies-for-entrepreneurs' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/how-to-succeed-in-business-5-strategies-for-entrepreneurs","linkCopy":"entrepreneurship","category":null}'>entrepreneurship</a>. </li><li class="mc-my-4"> 2. Takes time: Bootstrapped businesses can take a while to get off the ground due to the lack of helpful resources that investment capital can provide. While this may be acceptable to those who already have day jobs, it can be a long wait for those going all-in on their creative business ventures and may even increase debt in the end. </li><li class="mc-my-4"> 3. High risk of failure: Many factors can go awry when <a href='https://www.masterclass.com/articles/sara-blakelys-tips-for-starting-a-business' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/sara-blakelys-tips-for-starting-a-business","linkCopy":"starting a business","category":null}'>starting a business</a>, and taking on most of the responsibility yourself can lead to a higher risk of failure. While you may save money and retain control through the bootstrap process, the onus falls on you (and your co-founders, if any) to keep everything afloat—which can be challenging for new entrepreneurs or those with limited experience. </li></ol>

3 Disadvantages of Bootstrapping a Business

Bootstrapping is a challenging endeavor that can be worth the investment. For a few ways on how to bootstrap a business, see below: <ol class="mc-m-4"><li class="mc-my-4"> 1. Make a business plan. A <a href='https://www.masterclass.com/articles/what-is-a-business-plan-learn-how-to-write-a-business-plan-in-8-steps' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/what-is-a-business-plan-learn-how-to-write-a-business-plan-in-8-steps","linkCopy":"business plan","category":null}'>business plan</a> with a clear goal can help keep you focused on the main goal while also keeping track of all the smaller details that may slip through the cracks. </li><li class="mc-my-4"> 2. Start small. Depending on your available savings, bootstrapping a big idea may not be feasible. However, you can start with ideas on a smaller scale—products or services that provide a quicker turnaround, like an <a href='https://www.masterclass.com/articles/ecommerce-explained' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/ecommerce-explained","linkCopy":"e-commerce","category":null}'>e-commerce</a> store. Choose a venture you can do from home that won’t initially require a large amount of expensive equipment or rental space. </li><li class="mc-my-4"> 3. Barter. To cut down on monetary costs, try bartering products or services (of equal value) with another business. </li><li class="mc-my-4"> 4. Be ready to multitask. As the creator of a business, you should be prepared to wear many hats. You may not have the funds to hire employees or assistants at the earlier stages of your business, so every element of your business becomes your responsibility. </li><li class="mc-my-4"> 5. Conduct market research. Before starting a business, you should be well-versed in your chosen field. Conduct surveys to better understand your venture’s dynamics and prepare yourself for all the pitfalls associated with this particular type of business. </li><li class="mc-my-4"> 6. Create a presence. Establish a website that clearly and passionately defines your business. Use <a href='https://www.masterclass.com/articles/how-to-write-a-blog-post' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/how-to-write-a-blog-post","linkCopy":"blog posts","category":null}'>blog posts</a>, social media, and digital marketing techniques to boost your online presence and expand your reach. </li><li class="mc-my-4"> 7. Show confidence when selling. Be passionate about your endeavor, and make sure others can see that passion. Unwavering confidence is a necessity for entrepreneurs. Consumers buy from companies they trust, and this display of confidence will signal that your business is trustworthy, which can translate to revenue. </li></ol>

How to Bootstrap a Business

Get the <a href='https://www.masterclass.com/' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/","linkCopy":"MasterClass Annual Membership","category":null}'>MasterClass Annual Membership</a> for exclusive access to video lessons taught by business luminaries, including Sara Blakely, Chris Voss, Robin Roberts, Bob Iger, Howard Schultz, Anna Wintour, and more.

Want to Learn More About Business?

The bootstrapping business model takes a particular savviness and know-how to pull off successfully. However, a successfully bootstrapped business can offer high-reward for those willing to dig their heels into the process.