In 1996, at the only White House Small Business Conference ever held in our nation’s 300 year history, 2,300 delegates from around the country deliberated and debated…then came to the conclusion over the 7-day historic meeting that the number one need for small businesses is the need for more capital.

Capital is the crucial ingredient for any business to grow. This holds true whether you are a one-person operator with little revenue or a much larger company with significant sales. Given this ubiquitious need, here are five ways to access capital…

Form strategic partnerships. Who is already reaching your client/customer base? Who offers products or services that may be a great fit for your client/customer base? Who has a skill set or functional expertise that your firm lacks? Identify them, then form a win/win partnership. Why spend money you may not have when you have something else of value to offer them – your firm’s product and services! You can partner to access the sales force, marketing, IT, accounting, and management expertise. (All services you would otherwise have to pay for.)

Barter. As a business owner, you have a product or service that someone wants. Otherwise you wouldn’t be in business. So barter your products or services for those products and services you need to grow your business or service your customer. You can barter on a direct basis, and/or choose to work through a local trade exchange to acquire advertising, travel, legal or accounting services, televisions, landscaping, cleaning services… (And barter for personal items that you would otherwise pay cash.)

Look for a strategic investor. Is there a larger company that would benefit directly from your service or product offering? Convince them that your company can directly or indirectly positively impact their bottom line either through a sales increase or a cost reduction. Structure financing in the form of direct equity, a loan, use of their credit, prepaid contracts, or payment of development costs.

Call on your suppliers. If you are rapidly expanding your business and need money to pay your suppliers you ask your supplier to advance you the money. Especially if your expansion will contribute a sizable portion of your supplier’s annual receipts…iinduce them to provide a 12-18 month loan.(Point out the obvious benefits.) At the very least, negotiate a 90-day payment arrangement.


Seller finance. Who knows a business (or asset) better than the person/entity selling it? If you are growing through acquisition seek seller financing. Give them a lien against the business so they get the business back if you default. It’s the way for you to know you are getting what you paid for…reduces risks that the company has hidden problems (decreasing its value) and also keeps the owner from starting another competing business.

For more, much more, needed help in building your business see the BarterNews FastStart Program: FastStart

This entry was posted on Sunday, February 3rd, 2008 at 4:10 pm and is filed under Entrepreneurs & Small Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.