Building a Bootstrap Culture

My column this week in the Tennessean explores how to build a bootstrap culture:

When starting a new business, most entrepreneurs have to bootstrap their business — that is, find ways to get things done with limited resources.

But why do so many owners keep bootstrapping even when the cash starts flowing and they no longer have to bootstrap out of necessity?

Bootstrapping over the long term helps keep the business efficient, which reduces the need to secure external financing. This allows the entrepreneur to keep ownership of the business, reduces the need for taking on debt and helps strengthen the business during recession.

In addition, continuing to bootstrap helps build a stronger cash flow. And the stronger the cash flow, the higher the value of a private business. Bootstrapping, therefore, helps build wealth for the entrepreneur by increasing the value of the venture as it grows.

An entrepreneur has to get everyone in the organization to become a bootstrapper. This requires the creation of a bootstrapping culture throughout the company. Entrepreneurs should communicate a consistent message about bootstrapping. Highlight its importance in every form of communication, ranging from informal conversations with employees to formal communications such as newsletters, annual reports and policy manuals.

A consistent message reinforces the importance of bootstrapping behavior.

For example, include a feature in every company newsletter about an employee who was the “bootstrapper of the month,” offering a story of how he or she accomplished a task with minimal resources. Remember, storytelling is a fundamental part of building a culture in a business.

However, remember that your actions need to reinforce your message about bootstrapping. The leaders of a business should bootstrap at every opportunity to serve as a role model and demonstrate their commitment to bootstrapping.

Building a bootstrapping culture also requires careful recruiting of new employees. When bringing new people into the business, look beyond their technical skills and experience to fill the position. So, if you want a bootstrapping culture to flourish, find out if prospective employees fit into a bootstrapping way of doing business.

Ask the right questions

One approach to evaluating the fit of prospective employees is to develop open-ended interview questions that assess their bootstrapping temperament. For example, you can ask all the applicants the following: “Tell me about a time when you had to accomplish a task when limited resources were available.”

If the interviewee answers by saying that she always had more than enough budgetary support in her old job, it might be difficult for her to adapt to a bootstrapping environment. Or, if she answers by complaining about the lack of resources in her old job, or about how her old boss was always a cheapskate, it’s a sure sign that this person will not have bootstrapping in her blood.

On the other hand, if she speaks with enthusiasm and pride about how she got the job done within the limited resources available, the candidate is a perfect fit.

To keep bootstrapping alive as a company grows, entrepreneurs must create a culture in which bootstrapping is simply “how we do business around here.”