92WAYS TO GET MONEY WITHOUT GOING

TO THE BANK

Only 14% of new businesses obtain capital from a bank to start up. Yet, most people focus all of their efforts on this unlikely source. However, there are ways for owners to get

money using creativity, innovation, and finesse. These 92 techniques are simple, realistic, and logical.

A solution to your capital problems exists.

Example: An 18-year-old culinary arts student was in a class that I taught.

He had a great business plan for a food-truck company and was seeking $35,000 for a brand-new food truck from the bank.

Of course with no credit history, no assets, no collateral, and limited funds the bank said, “NO.” The cheapest truck he said he could buy cost $2,000 and

needed $2,000 in improvements. I asked if he had eight friends who could pitch in $500. These “investors” could tell their friends that they were investors in a food truck business and the entrepreneur would give them free food at all food truck events. He raised the money, and began operating his business. Within a few months, he was able to buy another used food truck for $6,500, and a few months after that he bought another for $8,000 all out of the proceeds of the food truck business. He now has three revenue-generating food trucks, very

little debt, and a growing business.

WAYS TO OBTAIN YOUR FACILITIES

LANDLORD FINANCING Your landlord is an excellent source of capital. The landlord may

be willing to pay for some or all of your leasehold improvements. If he does, he will add the cost to the rent and amortize it over the life of the lease. If the landlord really likes your business, he or she might invest in your company for a share of the business.

Landlords are excellent prospects for private investors.

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Example: An individual with little capital wanted to open a

restaurant. He found a landlord who provided the leasehold improvements, a walk-in cooler, and the

kitchen equipment. This landlord agreed to start the rent payments in six months. Yes, this individual paid a higher than normal rent. However, he preserved his capital and

was able to afford the higher payments in six months when his restaurant was a success.

DEALER’S OUTLET Sometimes a retail dealer will allow the use of their

facilities for businesses with complementary services and/or services needed by the dealership.

For example, some used car dealers provide facilities and customer referrals for auto repair businesses. The dealership

likes the convenience this arrangement provides its customers. Landlords are excellent prospects for private investors.

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LEASE SPACE FROM COMPETITOR Sometimes, a competitor will allow you to operate out of

their facilities. Some examples are recording studios, hair stylists, photographers, and artists.

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TENANT PARTNERSHIPS Get together all the necessary subcontractors for your business

under one roof and share facilities, equipment, and certain services. Each remains a separate business.

The approach works very well with creative talent. An advertising agency uses this approach by having a printer, copywriter, and public relations expert split the cost of an

office suite. This approach provides greater convenience for the client and you. It may enhance the exchange of creative ideas between tenants. It will definitely present more opportunities

for referrals and cross-selling of services.

RENT A SUITE If you need facilities on a part-time basis, consider renting an

office suite in a shared office space. These suites may be rented by the hour, day, week, or month. Often, they provide a range of other office services and equipment on a fee basis. Some

examples of fee-based services are: name on the door, telephone answering, conference room use and secretarial services.

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6EQUITY SHARING

You can get investors to put up part of the down payment for the real estate required for your business. After a specified time, the investors are bought out or the property is sold and the profits split. In a variation of this idea, the investors purchase the real estate in their name and lease the property to the business giving it an option to purchase.

This is an ideal way to get angels to invest in a project requiring real estate. The investor receives a real estate secured transaction with a tenant. The business gets the building and the use of the property it desires. This approach has the added advantage that there are significantly more real estate investors than there are business investors. Therefore, your chance of finding this money is better.

TENANT PARTNERSHIPS Get together all the necessary subcontractors for your business under one roof and share facilities, equipment, and certain services. Each remains a

separate business.The approach works very well with creative talent. An advertising agency uses this approach by having a printer, copywriter, and public relations expert split

the cost of an office suite. This approach provides greater convenience for the client and you. It may enhance the exchange of creative ideas between tenants. It will definitely present more opportunities for referrals and cross-

selling of services.

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HOME-BASED BUSINESS You can work out of the home. Many service businesses start in a private residence. This approach gives you a competitive

advantage of lower overhead. It allows you to save your capital for the critical issues. You should wait until your sales level

justify outside quarters before leasing office space. The growth in E-Commerce businesses and Web distribution allows many to

work from home and ship via other company distribution and sales channels such as Amazon, Etsy, and Ebay stores.

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SUBLEASE Want to buy a building?

Sublease part of it with several months of lease payments paid in advance. This would reduce the capital needed to purchase the building. You should consider subleasing the parking lot to other

businesses with different operating hours. Is your restaurant or club open at night only?

Sublet it during the day to a dance studio, karate class, or as a rehearsal hall.

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LEASE/PURCHASE FACILITIES Some real estate sellers will allow you to lease with an option to purchase your facilities. Always explore this potential. You must

remember that your primary goal is to obtain a successful business. A business investment should achieve a return of at least 25%

on your capital. Since real estate deals usually generate returns substantially less than 25%, your business should be first priority. Save your capital for it. You should consider purchasing real estate

when you have excess capital or you need to have long-term control of a special use property. Leasing with an option to purchase puts

you in control and preserves capital.

MOBILE RETAIL STORE You can create a mobile retail store without a fixed location.

This may allow you to take your merchandise to your customers. This approach has achieved great success when selling to the

construction industry and food sales.

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Example: One business sold clothes to farmers and farm hands off a truck. The truck

would always be at a location the same day and time each week. This allowed the business to operate out of numerous locations. It sold those clothes on a weekly installment plan and customers would come by each week to make their payments and

purchase new items. Since the cash down at the time of purchase was

equal to the cost of the goods sold, this venture was very profitable. Also, the majority of the owner’s

capital went into inventory to be sold rather than fixed assets.

TRADE SHOWS You can eliminate the capital needed for facilities by selling at trade shows, consumer product shows, fashion shows, bridal

shows, etc. An excellent example of cooperation in a show is all the companies that exhibit in bridal shows.

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FLEA MARKETS You can test the demand for your consumer product while

significantly reducing your capital requirements by selling at flea markets. These have little overhead and may have large crowds of buyers. Since these facilities are usually open limited hours,

you are not paying for an empty store.

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MAIL ORDER CATALOGS Many mail order catalogs are constantly on the look out for new

complementary products to go in their catalog. Sometimes, they will even produce the ads at no cost to you and do market

testing via selected advertising. Selling through catalogs may eliminate the need for retail facilities.

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NETWORK MARKETING Get others to sell your product. This eliminates the money necessary to maintain retail facilities. This involves people

buying your product and reselling it door-to-door or at parties.

DISTRIBUTORSHIPS/WHOLESALING You can eliminate your need for facilities by granting

distributorships or retail sales agreements. In addition, you can sell wholesale to other businesses in order to eliminate

the need for you to maintain retail facilities.

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16BUSINESS INCUBATORS

Business incubators historically have been parts of university and college technology transfer offices. They can be a great way to get facilities and entrepreneurial support

if you are a faculty member or student. Government related and independent business incubators have been growing quickly across the country and offer shared office space,

mentorship, training and funding opportunities.

WAYS TO OBTAIN EQUIPMENT

TENANT PARTNERSHIPS Get together all the necessary subcontractors for your business under one roof and share facilities, equipment, and certain services. Each remains a

separate business.The approach works very well with creative talent. An advertising agency uses this approach by having a printer, copywriter, and public relations expert split

the cost of an office suite. This approach provides greater convenience for the client and you. It may enhance the exchange of creative ideas between tenants. It will definitely present more opportunities for referrals and cross-

selling of services.

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EQUIPMENT PURCHASES Buy equipment and fixtures at auctions, foreclosure sales,

garage sales, and from classified ads. A manufacturing business buys all of its equipment for expansion used. The company has hired an excellent

maintenance/repair person. The cost justifies this expense by spending 75% below new retail for the equipment necessary to operate their business. Buy used to start, and when your business is thriving, you can buy state-of-the art equipment.

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RENT/LEASE You can rent anything you need for your business from equipment to furniture on a monthly basis. This will preserve start-up capital

until you can be sure of your success. Be sure to ask if the payments may be applied to the purchase price in the future.

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SUBCONTRACT FROM/TO COMPETITORS Getting money, products, or services from your competitors is

difficult. However, it is possible to find a mutual benefit. This is likely to be true when the competitor lacks the skill,

equipment, or personnel to meet their commitments. You can do subcontracting work with them to the benefit of all.

This approach may get you the use of the necessary equipment to perform the job and/or your competitor actually performs the work.

This is very common in the construction and consulting industries.

TIMESHARING Many businesses rent out their facilities and equipment

when not in use by the owner. This is a common practice with computer equipment and heavy machinery.

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SUBCONTRACTORSLet someone else make it, package it, deliver it and sell it.

This approach may be less profitable because each subcontractor has additional profit built in the contract. However, it requires

only a small amount of capital to get started. Also, it is probably cheaper until the sales volume is sufficient to start

to see some economies of scale savings.

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WAYS TO OBTAIN INVENTORY

CONCESSION SALES Renting or selling space to other vendors in your store is an

excellent source of obtaining inventory to sell. You can collect a commission for handling the sale in addition to the fee for the

space. All without you having any capital invested in the inventory. Grocery stores have used this technique to provide bakeries,

flower shops, gift shops, cafes, and meat markets within the store. Today, bookstores use this technique to provide coffee shops, art

work, and gifts to their customers.

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MANUFACTURER’S OUTLET Often manufacturers are looking for an inexpensive way to get their product into new markets. If you can help them achieve

this goal, they may supply credit terms for your inventory purchases from them. This is a common practice in equipment

sales and service businesses.

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MINIMIZE INVENTORY You should order in economical quantities.

If your ordering cost is low and the response time is short, you should keep enough inventory to maintain the

required selection plus a margin of safety. Manufacturers should schedule production to minimize floor

inventory. Use inventory purchasing models to reduce the capital needed to support inventory.

Though having inventory on hand does have value, you must make sure that the cost to carry does not

exceed that value.

25PRIVATE FLOOR PLANNING

Private investors take title to durable goods for sale at your business. This has been used very successfully by

auto dealers and dealers of baseball cards. The investors invest in an asset purchased below wholesale which can turn a substantial profit in a short period of time. This reduces investor risk and provides the business with the

necessary inventory to sell.

DEPOSITS Get deposits whenever possible. The deposits should equal your out-of-pocket expense of purchasing the item. This will

dramatically reduce your need for inventory capital.

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INVENTORY PURCHASES Buy secondary stock if quality is not that important.

Try to purchase inventory through bankruptcy sales, closeout sales and/or excess inventory sales.

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CONSIGNMENT Some manufacturers and wholesalers will allow you to take

inventory at no cost and only charge you interest until a sale is made. A fitness equipment company stocked their showroom

with treadmills supplied by the manufacturer and paid 7% interest until the item was sold. The company then paid the

manufacturer for the product.

WAYS TO GENERATE CAPITAL FROM BUSINESS OPERATIONS

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BARTER Businesses may barter for goods and services or may even barter for the use of another business’s facilities during the off hours.

Some examples of this technique are comedy clubs, photographers, nightclubs, late night coffee shops, day care centers and private

parties. Many communities have active barter associations. They have developed formal trading agreements that provide

additional resources to businesses. There are also many formalized barter networks in almost every region of the U.S. such as the

Florida Barter Network. These networks allow you to trade your skills for what your business potentially needs.

A restaurant owner once bartered with a musician to provide guitar background

music during the weekend evening hours. The owner gave “free” meals to the

musician and his family.

Example:

PREPAID CONTRACTS The customer prepays for goods or services. The most common

use of this technique is in selling prepaid maintenance contracts. However, anything may be pre-sold. This is especially

true when the service or good is critical to the purchaser’s success or significant discounting is available.

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USE CASH FLOW FOR DOWN PAYMENT Sometimes sellers are willing to wait for part or all of the down payment. Try to structure the deal so that future business cash

flow will provide the balance of the down payment.

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Example: A motel purchaser paid over $160,000 for a property with only $1,000 in cash. The seller gave the purchaser a year to come up

with another $15,000 and finance the remaining $145,000. The motel generated the additional $15,000 needed.

DEFER PAYING BILLS You may be able to delay paying bills to generate the cash you need. Though this may cause problems with suppliers, there is a chance it may not. If the business has been paying faster

than the industry norms, consider this option. Many businesses pride themselves on allowing their customers

plenty of time to pay and they pay when they receive the invoice. This practice is an inefficient use of capital.

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TRADE CREDIT Ask your suppliers for more credit. Meet with them and explain how much business they can expect. Seek longer

and more flexible terms. Explain your situation prior to the cash flow crisis. This builds credibility.

If your business is substantial to them, they may even provide all the inventory financing you need.

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CUSTOMER FINANCING You should try to use your customer’s money. Offer a

membership with special privileges and/or activities. Sell discount cards. All sorts of businesses use this approach

including restaurants, movies, clubs, grocery stores, consumer goods and office products.

35ADVANCE PAYMENT

Ask for the money before shipment. If you provide a substantial price discount you may get it. This works well with small manufacturers that make goods important to

their clients. They may be willing to pay up front to achieve an excellent price and a reliable supply.

ADVERTISING You can raise capital by renting advertising and display space at your business or on your building. This may be very attractive

when many people see your location daily. If your business has trucks or vans, consider selling advertising on them just as the

local transit authority does on its buses.

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RENT OUT YOUR BUSINESSWhen not at use in your business, you should consider renting

out your facilities and equipment. This is a common practice with computer equipment and heavy equipment. Other examples can be

found in restaurants, clubs and office suites.

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PREPAID SUBSCRIPTIONS Get advance subscriptions to print small quantities.

Use this approach to test customer acceptance and provide financing in stages. Think of all the businesses using this

approach: Book-of-the-Month, Fruit-of-the-Month, CD-of-the-Month, Beer-of-the-Month, etc.

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DIRECT MAIL Anything can be sold via direct mail. The critical ingredients are the quality of the list and the quality of the brochure. Otherwise, this

approach can be very expensive per response. Many books are pre-sold using this technique. This provides all of the capital

necessary to print and deliver the book. Private schools also use this method to pre-sell enrollments.

COUPONS You can sell coupons for any goods or service. They make excellent gifts and can be used to even out your seasonal fluctuations in cash flow. The funds raised can be used to purchase the goods or services to be provided. These can

also be electronic services such as Groupon, AmazonLocal and RetailMeNot.

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SUBSTITUTES Consider a substitute plan for the business. Look for another way to do what you want with less money. For example, buy

a portable cart instead of opening a storefront. These are frequently successful in malls, downtown areas at lunch, and

wherever large crowds gather.

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IMPROVE COLLECTIONS Many firms do a poor job of collecting. Thus, they need significant

extra capital because of their inefficiency. You should: bill customers quickly, develop well-defined collection procedures,

establish late penalties and contact past due accounts by telephone immediately. If you are not built for collections, many

times this can be outsourced to a collection agency which will take part of the recovered capital.

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SELL OFF ASSETS If you are not using it, consider selling it. If you do not want to impact you customers, you can sell to: employees, friends, or

to people outside your market area. If you are using it, consider a sale and leaseback. Do not forget you can sell rights to

trademarks, patents, copyrights, and territorial rights.

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INCENTIVES You might offer free delivery, installation, service, or gifts to get your customers to pay in advance. People love the

idea of getting something “free.”

45PURCHASE ORDER FINANCING

If you have the ability to perform a purchase order and the buyer has a strong history of paying on time, you can

get money to produce and deliver the product. Many commercial finance companies, commercial factoring

companies and banks also provide this type of financing.

FREE ADVICE Many businesses spend a fortune on all kinds of services

that they could have received for free. Examples are suppliers, U.S. SBA, Florida SBDC Network, trade

associations, SCORE, manufacturers and MBA candidates.

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CHECK PROCESSING Open all mail immediately and deposit checks the same day.

This will speed up your collections. If you will have a large volume of payments by mail, you should consider using remote lock-box

collections in order to speed up collections.

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MARGINS Businesses can significantly increase cash flow by

increasing gross margins. This is accomplished by increasing prices and/or reducing direct costs.

Remember the challenge is not to sell. The challenge is to profitably sell in sufficient volume.

Most small businesses do a poor job of pricing in a manner that maximizes profitability. You should make sure that you price

at the level that maximizes revenue, not demand. If you are competing only on price, you will lose. Sell what is unique about your business and test raising the price in the

market to increase margins quickly.

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DISCOUNTING A business can raise discounts to accelerate cash flow in the

short term. However, this usually reduces long-term cash flow due to its reduction in profitability unless the presence of discounts

stimulates additional sales. Try to take advantage of all significant discounts presented to you whenever possible. The economic rewards are usually greater than the additional cost of capital.

Weigh the two considerations carefully.

ELECTRONIC PAYMENT If you are in nearly any service or retail business, consider an

electronic payment account such as SQUARE, which can integrate into your smartphone or tablet, and also allow you to email an

invoice directly to a buyer. Paypal, and other electronic payment systems also offer the ability to bill and collect funds quickly.

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C.O.D. ORDERS You should use this type of order for new customers. It speeds

up the collection process and helps to control credit risks.

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COOPERATIVES Groups of companies get together to buy in larger

quantities in order to get better prices from suppliers. These efforts can be applied to such areas as marketing,

advertising, printings, mailings, etc.

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NOTE PAYABLES You can ask vendors to delay repayment and term out

payables. This may partially transfer them to a long-term debt and provide the additional working capital necessary

to support an increase in activity.

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INTERNS Reduce employee cost by using college interns.

This is a cheap source of well-educated labor. Be prepared to offer meaningful work to the interns,

have the appropriate insurances if needed and provide feedback to a faculty advisor on their

performance and what duties they performed.

55FACTOR RECEIVABLES

Your receivables can be sold at a discount to a factoring firm that specializes in this type of business. Most of the time

your customer will pay the factoring firm direct. You must be sure the practice is acceptable in your industry. Some firms

will look for other suppliers due to a fear that the use of factoring indicates that your firm is unsafe.

DISCOUNT NOTES If your business holds a secured IOU, consider discounting it for

cash. Certain firms buy these IOUs as an investment.

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INCUBATORS Many universities and government agencies are sponsoring

incubators for small businesses. This consists of putting a number of small businesses under one roof and providing services to support these businesses. These services may be free or at a reduced rate.

WAYS TO FIND CASH

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STAGED FINANCING In this approach, the business seeks capital for each stage of

its development. However, do not raise just enough for a few months operations. This approach can be successful when major milestones are achieved. Investors prefer this type of financing because it reduces investor risk as nobody gets too deep into

the deal without concrete evidence of success.For example, initially raise the capital necessary to develop the

prototype and determine its customer acceptance and feasibility. Then, raise the capital necessary to manufacture the product

and achieve $1,000,000 in sales. Next, seek the capital necessary to grow to $10,000,000. After achieving that level, you seek the

additional capital necessary for additional growth.

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USE THE CREDIT OF OTHERS Get a friend or business acquaintance to use their credit to purchase the equipment and/or inventory necessary for

your business. You can pay him for the goods plus a share of the profits, after you collect from your customer.

Remember that angels sometimes let you borrow their credit or assets to use in your business. Many businesses start with bank

loans secured by the assets of friends or relatives.

FUTURE COMMITMENTS If you can obtain letters of intent from established businesses, it may help you raise capital. If you can convince others that you have the ability to perform, these letters of intent may

increase your credibility.

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PAWN BROKERS Business and personal assets can be pawned for cash. Almost every town has a pawn shop in business just for that purpose.

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CREDIT UNIONS/THRIFTS Although credit unions/thrifts do not make business loans, they do make many secured and unsecured loans to their members. Before you quit your job, consider this source

for loans, especially if you need under $25,000 or you have equity in your home.

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PYRAMID YOUR CREDIT This technique increases your credit rating and borrowing

power. Deposit money into an account, borrow against the account and repay the loan. Deposit a larger amount and repeat the process. This can continue until you have

maximized your borrowing power. Next, seek smaller loans on an unsecured basis. The more credit you have obtained and

repaid; the easier it is to get loans.

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CREDIT CARDS Credit cards are a good source for under $25,000 in capital. Their cash advance privileges make getting

small amounts of capital convenient and easy. Turn in all your applications simultaneously and truthfully

disclose. Remember that it is usually easier to get two $5,000 credit cards, than it is one $10,000 card.

Though the cost of money should be a factor in your business decisions, the availability of capital is critically important. For smaller amounts, the

higher interest rates are not significant in absolute dollars. Its additional cost is only approximately

$5 per month for each $1,000 outstanding.

SELL BONDS It is possible to sell bonds to family and friends in order to raise

the capital needed for your business. This approach provides a firm repayment plan for the bond purchaser. Should your

business be successful and the bonds repaid, you should find it dramatically easier to use the same method in the future.

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WAYS TO BUY A BUSINESS

66LEVERAGED BUYOUT

Use the same financing tactics as the big boys, use the business’s assets to secure the loans that are used to pay the seller. You can arrange the financing of these assets

before you buy the business. You may even sell off assets after the purchase to repay the loan.

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INCUBATORS Get the seller to accept your offer to assume certain

existing liabilities as part of the purchase price. This lets the business repay the liabilities while you only need to provide

the seller’s cash requirement.

68SELLER FINANCING

Most sellers of businesses provide financing of the purchase. This financing is often up to 80% of the sales price and occasionally as high as 90%.

Sometimes, sellers provide this financing at lower interest and closing costs. It is almost always easier to arrange than bank financing. In addition, it is sometimes possible to combine seller financing with bank financing in a

way that minimizes your cash out-of-pocket. Because the business has an established history, it is usually easier to obtain bank financing to purchase

a business than it is to start-up a business. The critical factor is often the purchase price. Many businesses are sold at an inflated price. You must be very careful in performing your due diligence and analysis for the potential

purchase. Consider keeping the prior owner attached to the business if they have strong customer relationships. This can be done in an earn-out

agreement or phasing out of the business over a year or two.

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BROKER’S COMMISSION Have the business broker leave in part or all of his commission

as a liability to be paid by you over a period of time. Commercial business brokers are a good source to find business opportunities and financing. However, remember that he is usually working for

and paid by the seller. Do not excessively rely on him. You should verify everything, especially the value of the

business compared to its purchase price.

SELLER ASSUMES THE RECEIVABLES Arrange for the seller to keep the receivables and reduce the price. If they are as good as he claims, this may be possible.

A variation of this idea is to give the seller the proceeds from these receivables after they are collected. You do the record-

keeping and he helps in the collection process. You should allow him access to the records until all receivables are collected.

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NEGOTIATE WITH EXISTING CREDITORS They may be willing to accept less than 100% in order to

expedite collection. This is especially true when the previous owner was a slow payer or having financial difficulty.

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ESCROW DOWN PAYMENT It may be possible to get the down payment check

held by an attorney while certain conditions are being met. This may allow time to sell off assets to provide

the cash down payment.

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LEASE/PURCHASE Some sellers will allow you to lease the business with an

option to buy. This is more likely to occur when the previous owner/manager is no longer available to operate the business.

He may be deceased or ill. The existing owner may not have the interest or ability to run the business. Therefore, they

will consider a lease with an option to purchase in order to facilitate the sale of the business.

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EMPLOYEES Consider selling to an Employee Stock Ownership Plan. The employees of the

business may be interested in joining with you to purchase the business. They have a

stake in the success of the business and this approach may have substantial tax advantages for a properly structured deal. It is possible for

the interest income from any financing provided by a bank or the seller to be considered “tax free.”

This would lower interest costs significantly.

OTHER INTERESTED BUYERS Ask the seller for other interested parties who are also short on capital. Contact them about pooling resources. They are interested and may be susceptible to forming a partnership.

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76SELLER BORROWINGS

After you have negotiated the price get the seller to borrow the money needed for the purchase secured by the business

assets. Create a side agreement for you to assume the liability. This gets the seller his cash and you your financing.

The seller will want certain legal assurances as to repayment.

OTHER WAYS TO GET MONEY

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CROWDFUNDING Crowdfunding for pre-sales or “pre-tail” is a way to build sales

with the money up front. Sites such as Kickstarter and Indiegogo are ways to create demand for your product without incurring

the costs of inventory up front.

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ROYALTIES Only about 20% of businesses succeed. Inventors should consider

collecting up front fees and royalties for their ideas. The odds of them making money are greater in this approach than they are in managing

a business. This is particularly true when sold to companies already equipped to manufacture and sell the product. You should try to get as much money as possible up-front. If part of the money is to be paid on sales volume, you should make sure that there is a minimum volume requirement in the agreement. Companies such as Quirky and Edison Nation will give royalty and licensing agreements to inventors without

the inventor taking on all the risk of starting a business.

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FRANCHISING All you need do in order to franchise is to set up one prototype,

develop systems for its operation, document the operating systems in a manual, and develop a training program. Although there will

be legal and marketing expenses, you may get these back through franchise fees, royalties, store opening fees, sales of supplies, and the selling of territories. Franchising is profitable and has a high rate of success. However, it abounds in red tape. You should see

a franchise attorney for advice in this area. In addition, be sure to research the U.S. SBA Loan default rate for different franchises, to determine which franchises and industries seem to be succeeding.

LICENSING You can license other companies to manufacture, package, distribute,

service, market and/or sell your product. You can collect a fee up front and/or royalties for these licensing agreements. You should

try to get as much money as possible up-front. If part of the money is to be paid on sales volume, you should make sure that there is a

minimum volume requirement in the agreement.

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JOINT VENTURE Other companies may be interested in joining with you to start

or purchase a business. Sometimes, this is true when the product or service is very important to that company. Look to suppliers, customers, competitors, and companies in similar industries for

potential sources for this approach.

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MANAGEMENT COMPANY Can’t get money to start or expand your business? Form

a management company to manage an association of service providers. You get the clients, bill and collect the revenues, and pay the members. This has been done for such groups as building maintenance staff,

aerospace engineers and consultants.

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TEACH Create a clinic or school to teach about your product or

service. Examples are: a computer class taught by an Internet provider, a wine appreciation class taught by an importer, or a cooking school run by a restaurant. Also consider creating an online instructional video via YouTube to build confidence in

yourself and your product or service.

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FACILITIES MANAGEMENT Contract with another company to manage their

facility or part of their operations for a fee less than they are now paying. Cafeterias and lunch counters

are just a couple of examples.

NEWSLETTERS/SEMINARS/WEBSITES/BLOGS Sell your personal expertise in the form of a subscription to a newsletter or charge for a seminar. This is a form of up-front financing. Begin to build a presence on the Web

as a subject matter expert.

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86RESTRUCTURE FINANCIAL STATEMENTS

Accountants often prepare financial statements for only one audience, the IRS. The Generally Accepted Accounting Principles

allow the use of certain rules to prepare statements for other audiences. If your IRS statements do not adequately reflect

your business, get your accountant to prepare another set in accordance with GAAP.

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SELL THE TOYS It is time to sell the fancy cars, boats, planes and other personal toys.

When your business is successful, you can buy them again.

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GRANTS In spite of what you are told in infomercials, grants to individuals to start for-profit businesses are extremely rare. There are some small business research grants available. However, the odds of

obtaining these grants are long. Should your business be capable of supplying services desperately needed by local or state government,

it may be possible to obtain grants from government agencies. If you are in a highly technical field related to a university, SBIR

and STTR grants are a great source of capital.

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STATE/LOCAL ECONOMIC ASSISTANCE Most state/local governments have money available for loans and/or grants. These funds are reserved for companies that create high paying jobs in their community. They may have a

proof of significant job creation requirement or a requirement that your business be located in a designated “enterprise zone.”

Be sure to check with your government officials for details.

DEFENSE TRANSITION If an existing business has been impacted by the reduction

in federal government defense spending, it may be able to get special loans to aide in the commercialization

of its products or services.

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NEWSPAPER You can look for business opportunities and money in the classified section of your local newspaper. This is a major

resource to locate interested sellers.

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MODIFY YOUR LIFESTYLE A significant reduction in your living expenses may

be necessary to ensure the survival of your business.

Example:

A husband and wife wanted to purchase a business. They knew that in order to succeed the business would require their total

commitment. They decided to lease out their home for two years and move into a small apartment over the business. They

would be close to the business and they would reduce their personal cash needs by $1,000 per month. Their plan was to move back into the home in two years. After two years, they sold their home for $100,000 and purchased a new home for $350,000 cash. They had achieved more than their dreams.

Don’t let the bank determine your future. Though this list has focused on the business, your

present and future financial success is largely determined by your personal commitment and finding

a way to fund your business creatively.