Bootstrapping: What it is? and How it works?


Growing and scaling your business comes in many forms and methods. Some think that it is an absolute necessity to reach in for investors. Others believe that it is an absolute necessity to open up credit lines. However, there are other ways for growing and scaling your business. In this article we are going to go over the bootstrapping method. What it is? and how it works?

What it means?

It comes from the figure of speech "pulling yourself up from the bootstraps" Meaning utilizing the resources available and building from there.

How it works?

Bootstrapping is a very effective way in scaling your business organically through profits being re-invested into your company without relying in a foreign injection of cash (Financier, Loan, Investor etc). You usually have your small investment (I), (C) your cost of goods and you sell that for (G) gross profit giving you an (N) net profit. Using your (N) net profit invest in a larger (C) which now means in a larger (G)gross profits, thus having a larger (N) net profit.

Also, the term "Value Apex" is one you should add to your vocabulary. That thought process is involved in literally every decision you make, from buying an ice cream cone to running a business. The basic idea is that everything has a value on it, whether that's a product or a service, but the key is to look at what the VALUE of that product or service brings to your business, NOT the actual price of it.

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