Sure, it sounds good -- bring in more cash rather than take out a loan when you need to, say, buy equipment for your business. Not so easy to do, you say. Well, yes and no. Wall Street Journal Small Business recently offered some suggestions on Innovative Ways to Reel in Cash, by Diana Ransom of Smart Money. The article tells about a spa owner who raised $30,000 in a single day by pre-selling services.
Other tactics Ransom suggested may work for you, too:
- Offer upfront pricing - Customer pays cash now for future discounted goods or services
- Discount items, sometimes - Selective discounting
- Purchase money financing - Give vendors a Purchase Money Security Interest (PMSI), a lien against goods that the vendors agree to send your business, and pay them when the items sell. (Good deal for vendors because a lien on new goods trumps other liens in a bankruptcy proceeding.)
- Switch from fixed to variable costs - Use hosted services rather than purchasing technology equipment. Maybe doesn't raise cash, but certainly eliminates need to borrow.
(Article found via @curtisfinancial on Twitter.)
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