a handful of golden acorns

Some say that small businesses will lead the way out of the global economic downturn, presumably because hard times create  necessity – the mother of invention.

I am not so sure, although I would be pleased to be proven wrong.

I suspect that the credit crunch will give us a handful of golden acorns – but not a forestful.

Picture credit: tigerlillyshop

Very few newly-founded, small businesses get sufficient traction, quickly enough, to have the broader short-term impact that we will need to restore much-needed economic ‘normality.’

For sure, history teaches us that even the largest enterprises all begin with an individual with an idea. However, not every acorn fulfils its potential to become a mighty oak tree.

For every multinational conglomerate founded in a back bedroom or garage, there are millions of would-be entrepreneurs who don’t realise their ambitions.

That’s life – the world of business is a harsh environment, even in the best of times, and we have to deal with it. But having a go is what it’s all about. Actually doing something new and risky; not just daydreaming.

Building any sort of new business needs substantial investments: time, effort and money – especially money. But where do you go when the money supply for risk has pretty much dried up?

looking elsewhere when the drawbridge is up

During hard-pressed times, the traditional sources of funding (e.g. Banks, Venture Capitalists) tend to sit on their hands and raise the drawbridge – or at least make borrowing difficult and expensive. The would-be entrepreneur has to look elsewhere for investment. Or, perhaps, become even more inventive.

Sramana Mitra is a columnist for Forbes magazine and she has written a book (Bootstrapping: Weapon of Mass Reconstruction) to show that successful businesses can be built without formal borrowing.  The book contains a dozen case studies of successful [mostly online] businesses that have been built on the principle of bootstrapping – development through progressive re-investment of revenue, rather than borrowing money and watching the burn-rate until the business either prevails or fails.

entrepreneur journeys

Mitra has structured the narrative interviews with the successful entrepreneurs into four useful sections:

• Doing more with less;
• Getting started with little or no capital
• Validating the market – on the cheap
• Resurrecting the dead

All of these topics are attractive to readers keen to start out as business owners. I must say though that this is not a ‘how-to’ book, more of ‘how we did it’ compendium. The case studies are particularly relevant to online/ intellectual property propositions and somewhat less relevant to ‘bricks and mortars’ entrepreneurs.

your own golden acorn

Bootstrapping: Weapon of Mass Reconstruction is a fair insight into how a previous handful of golden acorns was nurtured into healthy maturity. You will also find some useful war stories of what was less successful too. Could be a useful book, if you are about to embark on the search for your own golden acorn.

Bootstrapping: Weapon of Mass Reconstruction
Stramana Mitra
http://www.booksurge.com