Anyone forming an LLC in Arizona knows that risk is part of the game, but a U.S. Small Business Administration director says that bootstrapping - funding a startup without outside financing - is an advantage when it comes to limiting debt.
Including a third party means someone else has a voice in a business, writes Pravina Raghavan in Crain's New York Business. Whether it's a bank or a venture capitalist, it means that a business owner is not free to make all decisions.
"[T]he reality is that bootstrapping often allows entrepreneurs to keep control of their business and minimize their debt, even as they assess when and how to grow the business, possibly through outside investors or financing," she writes.
The nonprofit group of experienced professionals, SCORE, and the SBA development centers can help aspiring entrepreneurs with the steps required to set up a new business, including tips on how to minimize risk for bootstrapping a business.
The recent winner of SCORE's Outstanding Woman-Owned Business, Nikole Stillman, used funds from her 401(k) to fund her home-care company. Although she did obtain some private financing, she said the assistance from SCORE was helpful in going from an idea to a successful business.
Tags : az, c corp, ca, llc, lp, ny, operations, s corp, small business management, tx
Posted: Sep 22nd, 2010