If you’re thinking of starting a new business, or if your existing business wants to grow, it’s easy to get frustrated if you don’t have the capital to fund what you’re dreaming about. But you don’t have to be frustrated. You can use your creative alternatives – and they are extensive.
First, ask yourself the two big questions: “If I had the money, how would I use it?” And “What would I spend it on?” For example, do you want to run ads, hire a sales force, or build an Internet website or e-commerce division? Do you want to expand your inventory? Your product offerings? Or do you need more technology, software, computers, and so forth? What is the purpose of your capital requirements. That is, where would that money go?
Once you’re clear on the answers to those questions, realize that you can persuade plenty of businesses and people to provide you with the equivalent of what your money would be used for. But instead of paying them upfront cash, they’ll probably accept a more creative payment alternative. Here’s a good example to stimulate your mind … A past client of mine had zero marketing money. So we got 1,000 magazines, newspapers, TV and radio stations to run ads for us, selling a starter-sized unit of our product for a $3 purchase.
The advertising media put up over $20 million in advertising for free, so we let them keep all the money from the first purchase (the $3 sell). We got enormous exposure – and a million people who purchased for the first time. But we also got 100% of the back-end (repurchases) too! And 500,000 out of the million people kept repurchasing over and over again. (They averaged 10 times with an average of $3 per purchase – or $30 each on the back end.) This promotion did so well that we made an 80% gross profit.
In fact, a NYSE-listed company asked us to sell the company for tens of millions of dollars. Does this give YOU any ideas? Here’s another example … A friend of mine needed a sales force, but he had no money to pay for salaries, travel, and so forth. So he did two brilliant things.
First, he found three people locally who sold non-competitive products to the same market he was targeting and offered them twice the normal commission to take on his product. They did – and sold millions of dollars worth. But he didn’t stop there. He found a large, well-capitalized telemarketing company whose main activity was calling homeowners at night.
Since they hardly used their daytime hours, they were delighted to sell my friend’s “business to business” product for him during that normally light time – and receive half the profit (which was four times their normal compensation). My friend didn’t care, because every sale that they generated was pure windfall profit (see “Word to the Wise,” below) for him – and, of course, he also got 100%, of the back end. Another friend found a business that had over 100,000 square feet of unused storage warehouse capacity.
My friend needed 75,000 square feet, but was low on capital. He persuaded that company to furnish him with their unused space … in exchange for a small share of the sales he generated with the new products that he was able to inventory. Still another exciting story is about a friend who wanted to be in the business of selling cassettes at grocery stores and mini-marts. But he had no capital.
He learned my theory: that there’s always someone out there who needs what you want or need even worse than you need or want it … and who will be eager to make it happen for you. So he went out and found a huge music distributor that had just lost a major account and wanted to replace the business. He easily persuaded them to furnish hundreds of thousands of dollars worth of tapes for him to distribute in a way that allowed him to offer the grocers better payout terms than their current suppliers.
Both sides prospered mightily. Or how about barter? You can trade whatever product or service you sell or make for whatever you need. I’ve traded my consulting and seminar-type products for expensive trips, cars, jewelry, furnishings, and services for my office.
When they didn’t have capital, I’ve seen people make deals to get needed products or services (such as giving the provider a share of future sales in exchange for the needed items) for a period of time or up to a multiple over the market value of the product or service furnished. For example, once a friend got a software company to give him $200,000 of needed software in exchange for giving them 3% of his future sales for 18 months or $400,000, whichever came first.
[Ed. Note: Jay Abraham will be a featured speaker at ETR’s 2nd Annual Wealth Building Bootcamp this October. Jay is acknowledged as a unique and distinctive authority in the field of personal and business performance enhancement. He is a world-famous marketing expert extraordinaire. He is also a master at helping people maximize and multiply their wealth and assets. Jay is responsible for thousands of success stories. He has literally made billions for others as well as millions himself. To learn more about Jay’s upcoming appearance at ETR’s Wealth Building Bootcamp, please visit www.earlytorise.com/2005prereg.htm.]