The story that follows is a perfect case-study of how to bootstrap a business from scratch without a bean to your name.

Bootstrapping, as in “lifting yourself up by your bootstraps” is a method of starting a business with virtually no money. If it sounds more hair-raising than business-raising, do not fear, for many a giant has walked this path before you. Microsoft for one … and countless two-man garage startups that went on to dominate their niche.

Our case study is an interesting one because the business was created under conditions of some hardship :

In just a few years, John Fanuzzi built a national business in the U.S. employing dozens of workers. He did it with no capital and used basic cash-flow techniques to accomplish his dream.

John moved from Philadelphia to Montana in 1980 with everything he owned in the back of a pickup, including his two children of five and two years of age. He was a single father and had a lot on his plate.

He’d done a bit of project managing in the past and was a skilled carpenter. His business idea was to build a company in the unlikely field of massage tables.

Fanuzzi was in this situation because he had injured his back and a doctor said it couldn’t be treated. He was cured, however, by a single visit to a massage therapist. Who says alternative treatments don’t work?

The therapist had told him that it was impossible for him to source a portable massage table for the patients who couldn’t come to him. John was so grateful for his cure, he replied without thinking, “No problem, I’ll make you one.”

He began building it in his driveway, having spent $100 on materials and costs. It was so successful, the news got out and soon orders came flooding in. The problem was, John didn’t have enough to fork out $100 for each table while it was being made. He bridged the gap by asking for a deposit of $100 for each table, then charged $185 for the completed item. Classic bootstrapping methodology. Fanuzzi was in an ideal situation. He had no overheads and lots of customers.

After the move to Montana, he persuaded local teenagers to assemble his products for piece-rate wages and even shipped them on Greyhound buses.

Later, in the 1990s, Golden Ratio Woodworks, based in Emigrant, Montana, became an established and going concern. He was doing $200,000 of business a year. His debts were almost zero and customers paid in cash.

Then it took off in more sophisticated areas of the U.S, like California and the East coast, where buyers thought it “kinda folksy” to order from Montana.

The key to his success, as it is with all bootstrappers, is the management of cash-flow.

Careful cash-flow techniques are what a bootstrapper must master to succeed. In other words, the lower the costs, the less you have to earn to get into the comfort zone.