Bootstrapping: How to start and grow your business yourself

Published Friday 30 January 2026

Table of contents

• What is bootstrapping?
• What are some bootstrapping examples?
• Eight bootstrapping strategies for your business
• Why bootstrapping is popular with entrepreneurs
• The challenges of bootstrapping
• Are there other ways to finance a startup?
• Bootstrapping tips
• Managing your bootstrapped business finances
• FAQs on bootstrapping

Key takeaways

• Start your business with personal savings, credit cards, or small unsecured loans to maintain complete control over decisions and avoid waiting for investor approval or loan processing delays.
• Use presales strategies to generate funding by collecting deposits for future products or services before you produce them, which helps cover production costs without external investment.
• Implement precise cash flow management and track expenses closely to make every pound count, as limited resources require strategic spending decisions based on real-time financial data.
• Build a strong network of experienced entrepreneurs and mentors who understand bootstrapping challenges, as they provide valuable guidance and may lead to partnerships that support your business growth.

What is bootstrapping?

Bootstrapping is funding a business using personal resources instead of external investment or formal business loans. This self-funding approach helps entrepreneurs launch their startup quickly without waiting for investor approval.

First-time business owners often choose bootstrapping because traditional funding can be difficult to secure. Instead, they use personal savings or credit cards to cover startup costs, while some may seek small, unsecured loans; for example, in the UK, entrepreneurs can apply for a loan up to £25,000 through the Start Up Loans scheme to help launch a new business.

Where does 'bootstrapping' come from?

Originally the bootstrapping meaning comes from the phrase 'to pull yourself up by your bootstraps', referring to the idea of taking personal responsibility for something.

Although there are other ways to fund your startup, like through external investors (venture capitalists and angel investors) and traditional business loans, self-financing and bootstrapping techniques are still popular with entrepreneurs who want to keep control over their company and grow their business organically.

What are some bootstrapping examples?

Successful bootstrapped businesses started with minimal external funding and grew through creative self-financing strategies. Famous examples include:

• Facebook (Meta): Mark Zuckerberg launched from his college dorm room
• Amazon: Jeff Bezos started from his garage

Creating a self-financed startup requires matching your bootstrapping approach to your business type. Tech businesses might rely on programming skills and personal savings. Manufacturing businesses could use presales to fund production costs.

For instance, if you're a tech business you might use personal savings to cover initial startup costs like software licences. You might also rely on your own programming skills. If you're starting a manufacturing business, like a t-shirt company, you could start a presales programme where people buy your t-shirts before you've made them, and use the presale income to cover your production costs.

Eight bootstrapping strategies for your business

These eight bootstrapping strategies provide different funding sources depending on your business needs and financial situation:

• Personal savings: Use your own money to maintain full control over business decisions.
• Unsecured personal loans: Access thousands in funding based on your credit score without collateral
• Credit cards: Obtain tens of thousands in credit, though with higher interest rates
• Grants: Secure free funding from organisations supporting specific causes or minority-led businesses. In the UK, for example, some subsidies worth under £315,000 may be available with fewer compliance requirements under the minimum financial assistance rules.
• Peer-to-peer lending: Connect with private lenders through online platforms who back promising ideas
• Friends and family funding: Tap your personal network for startup or operating expense coverage
• Presales: Generate funding by collecting deposits for future goods or services delivery
• Crowdfunding: Pitch your business to online communities for presales, equity investment, or loans

Learn more in the guide 14 ways to finance your business.

Why bootstrapping is popular with entrepreneurs

Bootstrapping appeals to entrepreneurs because it offers significant advantages over traditional funding methods. Key benefits include:

• Faster launch: Start immediately without waiting for investor approval or loan processing.
• Complete control: Maintain full ownership and decision-making authority without external influence.
• Debt avoidance: Eliminate hefty business loans and interest payments that strain cash flow.
• Creative efficiency: Tight budgets encourage innovative cost-cutting solutions, like handling deliveries personally instead of outsourcing.

This careful approach helps entrepreneurs develop sustainable business models that stretch finances further as the company grows.

Entrepreneur bootstrapping remains a go-to strategy for many when starting a business.

The challenges of bootstrapping

Bootstrapping challenges create significant risks that entrepreneurs must carefully consider before choosing self-funding:

• Limited capital resources: Restricted funding makes it difficult to handle unexpected expenses or opportunities.
• Personal financial risk: Your personal savings and credit are at stake if the business fails to meet profit projections.
• Slower growth potential: Less available funding can limit marketing, hiring, and expansion compared to investor-backed competitors.
• Scaling difficulties: Limited resources make it harder to invest in infrastructure, technology, or staff needed for rapid growth.
• Loan qualification barriers: Banks typically require personal asset guarantees, like your home, for business loans to bootstrapped entrepreneurs.

Are there other ways to finance a startup?

Because of the financial risks involved in getting a startup going, many entrepreneurs build a modest version of their business from a mix of savings and unsecured loans.

There may be other ways to finance your startup, such as grants and financial support from government programmes. For instance, the UK's Growth Guarantee Scheme provides lenders with a 70% government-backed guarantee on loans up to £2m.

Of course, it's often easier to attract external finance once your business is established. After initially bootstrapping your business, you could factor into your business growth strategy to seek extra funding once you're up and running.

Bootstrapping tips

Bootstrapping success requires focused execution during your startup phase. These strategies help maximise your limited resources:

Manage finances with precision

Implement strong cash flow management and strategic spending to make every pound count. Track expenses closely and prioritize investments that directly generate revenue.

Build your network and find mentors

Connect with experienced entrepreneurs who understand bootstrapping challenges. A strong network provides guidance, prevents common mistakes, and may lead to valuable partnerships as your business grows.

Stay adaptable and nimble

Use your low financial obligations as an advantage. Pivot quickly when opportunities arise or challenges emerge, giving your business the flexibility that larger, debt-heavy competitors lack.

Managing your bootstrapped business finances

Managing your bootstrapped business finances requires precision and discipline to maximise limited resources. Strong financial management directly impacts your startup's survival and growth potential.

Successful bootstrapping depends on maintaining positive cash flow and making spending decisions based on up-to-date numbers. Real-time financial insights help you spot problems early and identify growth opportunities.

Cloud-based accounting software like Xero provides the automated financial management tools bootstrapped businesses need. Features like automated bank reconciliation, expense tracking, and cash flow forecasting reduce administrative time and improve financial oversight, giving you more time to focus on growing your business. Try Xero for free.

FAQs on bootstrapping

Starting a bootstrapped business raises many practical questions. Here are answers to the most common concerns:

How much money do I need to bootstrap a business?

The amount varies by business type, but most bootstrapped startups launch with £1,000 to £10,000. For example, a key initial step in the UK, registering a limited company online, costs £50 and is typically registered within 24 hours. Service-based businesses typically need less capital than product-based or manufacturing businesses.

How long should I bootstrap my business?

Most entrepreneurs bootstrap for 6 months to 2 years while establishing revenue and proving their business model. The timeline depends on your industry and growth goals.

When should I stop bootstrapping and seek external funding?

Consider external funding when you need capital to scale faster than organic growth allows, enter new markets, or compete with well-funded competitors. Ensure you have proven revenue and clear growth plans first.

Is bootstrapping suitable for all types of businesses?

Bootstrapping works best for service-based businesses, software companies, and businesses with low startup costs. Capital-intensive businesses like manufacturing or biotech typically require external investment.

What's the difference between bootstrapping and self-funding?

Bootstrapping specifically means building a business using minimal external resources and growing steadily from your own sales. Self-funding is broader and can include using significant personal wealth without the same focus on keeping costs as low as possible.