Recession Means Back to Bootstrapping Basics

Now is no time to despair.

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Tim Berry
Hooray for bootstrapping.

While lots of would-be Neros fiddle, Rome burns. Economic stimulus gets stuck in partisan traffic—pork, or not—and, meanwhile, the job ticker goes steadily down and a credit crunch continues.

The New York Times reported the other day that angel investors are pulling back. And U.S. News's Matthew Bandyk posted yesterday on how venture capitalists are taking a beating. The Small Business Administration backed way fewer business loans last year than the year before. And commercial banks are tightening restrictions.

But business goes on. You and I continue to buy things. New businesses are still starting, even though getting the money is obviously tougher. I've talked to several businesses that are doing just fine, even growing, with or without investment or commercial financing.

It starts with doing something—building a product or offering a service—that people want to buy. Basic necessities are always nice, but luxury businesses survive and grow, too. Value is really important, as in giving value to your customers. And the best financing is customers.

Start small if you have to. Work harder. Plan realistically. And if people want it, and you can make money offering it, then don't fail to start just because times are hard.

Tim Berry is president and founder of Palo Alto Software, founder of, and a cofounder of Borland International. He teaches "starting a business" classes at the University of Oregon. He is author of books and software including Business Plan Pro, published by Palo Alto Software, and The Plan-As-You-Go Business Plan, published by Entrepreneur Press. He has a Stanford M.B.A. degree and degrees with honors from the University of Oregon and the University of Notre Dame. He blogs at Planning Startup Stories and Up and Running.