The best definition of bootstrapping I found is from Wikipedia, which says “Bootstrapping in Business is to start a business without external help/capital. Startups that bootstrap their business fund development of their company through internal cash flow and are cautious with their expenses. Generally at the start of a venture a small amount of money will be set aside for the bootstrap process.”

In other words, bootstrapping involves starting the business without venture or angel funding. The obvious question is why would someone choose to take the hard road (bootstrapping with personal funds) when there is an easier road (venture/angel funding) available to them?  Well, the truth is that the “easier road” is actually the least traveled for most start-ups. That is because for the longest time, a myth has been perpetuated that all you need to do is to come up with the next great idea and venture capitalists will be tripping over themselves to get a piece of the action. In reality, less than 5% of venture money goes to seed-stage startups. Which means for 95% of start-ups, seed funding comes from personal resources (in my case, credit cards) or borrowing/gifts from friends and family.

The irony is that venture funding usually follows later, after you have successfully proven the model and built something of value (generating revenue, and maybe profitable, or close to profitability). So, if we can agree that the probability of a start-up getting venture or angel funding as seed capital is next to impossible, then the question becomes, how do you maximize the funds you are able to raise from personal resources or borrow from friends and family to start your business? The goal is to get to the point where the business is generating enough cash flow to fund operations, and eventually lead to profitability. That is where bootstrapping comes it.

Over the next couple of posts, I will discuss the benefits of bootstrapping to the entrepreneur, after which I will introduce in broad terms, my bootstrapping ideas, which will form the basis of this blog. Stay tuned!

I was listening to PRI’s “The World” on NPR yesterday and was surprised to learn that Venezuela, with its oil resources, is facing the same problem of rolling blackouts. Like Ghana, it turns out Venezuela gets 70% of its electricity from Hydro power and a prolonged drought in that country has led to power rationing.

My sister lives in Ghana and owns a Fashion Design business and I have heard her complain several times about how the power ration is affecting her business. I can imagine what other small businesses in Ghana and Venezuela are going through. For a third world country where jobs are scarce and unemployment is high, the least the government can do to promote growth is figure out how to provide dependable power supply. I am sure hotels in places like Accra, Ghana have back-up generators, so tourists are generally shielded from this, but those who venture outside Accra are definitely going to see how frustrating power rationing can be.

It just makes me realize how blessed I am to be doing business in a country where I don’t have to worry about power supply. The things we take for granted

As a rule of thumb, I only spend a maximum of 20% of my time on side projects. I have had to work hard to stick to this rule since side projects have a tendency to take your focus away from your main business. I will provide further updates as we make progress on the site, so stay tuned.

A good example of how perseverance can pay off is reflected in the success GiftCardRescue has had with our Bulk Gift Cards program. Our goal was to become the #1 buyer of Bulk Gift Cards/Wholesale Gift Cards. Getting bulk suppliers to trust our brand and sell gift cards to us was not going to be an easy task. But through clever marketing, relentless focus on customer service and staying on top of changing trends in the marketplace, we have grown our bulk supplier base to the point where it now accounts for two-thirds of our revenue.

So, the point here is that sometimes, you may not have all the answers to a particular problem when you initially launch, but as you persevere and focus on what your customers want, you will lead yourself to a workable solution.