By Stefania Aulicino

When you need cash to grow, consider accepting my challenge: take equity off the table. Stretch yourself!

Equity is the lazy way to get cash. All you have to do is give up some of your ownership. Anyone can do that. Equity is overused and way too expensive for most of your growth needs.

 

Alternatively, if you are willing to apply some creativity, here are 2 of the cheapest ways to get cash to grow:

  • Negotiate expenses
  • Alter time

A negotiated expense (a lowered price) is always better than more cash to pay a non-discounted price.
Altering time can either be delayed payment for expenses you owe, or accelerated receipt of revenue due you.

 

 

  • Negotiated expenses conserve cash.
  • Altering time lets you make better use of the cash you have.

Both contribute to enhancing the efficiency of your business model.

 

Too often, the first thing that comes to mind is to get more cash to grow. Instead, here is a suggestion that you CHANGE how you think of cash when dealing with potential funding sources. Consider how each can help you:

Lower your cash needs

Optimize the cash you get

Always negotiate expenses first; then alter timing. That makes more cash the last option—or better yet, completely eliminates the need for more cash.

Here is another tip: when seeking cash to grow never use the word “INVEST”. People are hardwired to think of equity and ownership when they hear that word. That actually slows down your access to cash because for most people equity investing in private companies is not comfortable.

Alternatively, if your potential funding source is a lawyer, perhaps discounted expenses feels more comfortable; for a neighbor, perhaps an IOU feels more comfortable; for a customer, perhaps an advance cash deposit feels more comfortable.

Comfort is different for each source. You can’t know what the best “comfort” package would be until you ask. Here is where your natural creativity pays off. “No” is always an acceptable answer, but if you don’t ask you will never get a “yes”.

You do this kind of thing instinctively inside your business with customers and vendors all the time. Why not apply this same process to funding sources. You don’t’ “look” for new products; you create them to your own specifications. You don’t “look” for new customers, you create them by educating prospects to the distinctive features only you can deliver. Why not “create” your own funding sources. That’s cash on your terms!

Actually, there are more people willing to negotiate expenses and alter timing than are willing to make an equity investment! Look around and consider all the different sources of funding available to you if you were willing to package your request in a way that is comfortable for them.

Sources of cash are all around you.  When you think about it, changing how you use cash is a lot faster than trying to raise equity to grow.

Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Let us help you become a magnet for non equity and equity sources to fuel your growth. Please explore our tools, solutions and consulting options tailored for different growth stages and different budgets: www.CashAndControl.com