“Energy and persistence conquer all things” - Benjamin Franklin
So you want to start a business - or - you want to grow a business you already have. And, you don’t have funds to invest. Perhaps you’ve tried several banks. Or maybe friends and family? Are you hitting walls in your quest for more funds to grow your business? As a business coach, I often help clients find innovative ways to raise money.
This needs to be part of your belief; there is a lot of money out there, lots… If you have an interesting story, concept or product, people will listen. You do need a plan - people want to see a serious roadmap forward whether you have a new business or you plan to expand a business you already have.
So… how can you raise funds when your options seem exhausted? Is crowdfunding the answer? There are a lot of challenges with traditional crowdfunding on platforms such as Kickstarter or Indiegogo. So, why not create your own version of crowdfunding? Here are two methods that you can use today and start raising money tomorrow. I’ve used them both in our businesses in the past and they were very effective.
People who need your products and services love a discount. So here is how you do it: Bundle your products or services together and then offer a discount if they pre-buy. You get their cash now and they get a great deal for paying you early. This works if you are brand new or if you are well established. It even works if you have not yet started your company. Just be sure you can absolutely deliver on your promises.
Here is an example of how we did it. We put together three packages of our most popular coffees into packs priced at $397, $997 and $1,997. We then sold them for a discount of 10%, 15% and 20% respectively. In one week we pre-sold 35 packs and raised $52,000.
We used this method several times to raise money to expand our coffee business. It can be used for any type of business. It works well for start-ups, when you have a new project or you are expanding an existing business.
Once you decide on how much money you need to raise, build a plan to raise those funds by borrowing that money from friends, family and customers and then re-paying them each month or quarter as a percentage of your sales. The more growth you have, the faster you can pay back your lenders.
Here’s how we did it: First, we decided on the amount we needed and what percentage of net sales we could afford to share back each month. Next, we built a loan document based on that share percentage. We then offered to pay back 150% of each lender’s amount [we offered the amounts in units of $2,500]. Each month we took the Revenue Share percentage, divided it by the number of units sold and sent a check out. We tracked it all with a Google Sheets spreadsheet. We then offered this to all of our coffee customers. We actually had to cut it off because it was over-subscribed.
If you are interested in brainstorming creative fundraising techniques, I'm opening up free, no-obligation 30 minute Coaching Strategy sessions. Email me if you are interested and would like to dig deeper: firstname.lastname@example.org or call me at 208.471.8211
I am a dad, husband, entrepreneur, small business coach, motorcycle rider, snowboarder and dog person. I focus on helping people transition to having their own business and building a new future. Besides me, we have a great team of business and internet start-up advisers. If you have been dreaming about starting your own business and are looking for help, call us at 208.471.8211. You can also email us at email@example.com