1. Focus on your cash flow, not your profitability. Everyone assumes that profits are the key to survival. If you could pay the bills with theories, this would be fine. But the reality is that you pay your bills with cash; so focus on your cash flow.

2. Forecast from the bottom up. Many people look at the total market for their product and then assume that they will win a certain percentage of it. For instance, the dog food market in the UK is worth £1 billion. Someone forecasting from the top down might say that they were going to go after 5% of that market. Someone forecasting from the bottom up would say, "I think I can sell my dog food into 100 outlets and that each one will sell £1,000 a month. I think we both know whose forecast is likely to be more accurate."

3. Start out as a service business. Say you want to build a software company. Provide consulting and services based on your work in progress software. This has two advantages. First you get immediate revenue and true customer testing Second, once the software is fiels tested, you can flick the switch and become a product company.

4. Focus on function, not form. Yes, it is wonderful if you can create a product like the Apple iPod or the Rolex. But as a bootstrapper it may be better to focus on a product that provides a very tightly defined function. A stapler that works, instead of one that just looks good, for instance.

5. Understaff. Many entrepreneurs staff up for what could happen, best case. Bootstrappers understaff, knowing that all hell may still break loose.

6. Go direst. The optimum number of mouths between a bootstrapper and his customer is zero. Of course, retailers provide great customer reach and wholesalers provide distribution. But e-commerce was invented so that you could sell direct and reap greater margins

David
Small Business Resource