There’s a scary place that virtually every entrepreneur has been at one time or another, whether you’ve been in business for a few months, a few years, or a decade.
This place, the place no business owner wants to be, is cashless, broke, and desperate for funds.
When this happens (and it DOES happen), it’s easy to throw your hands in the air in despair and declare that there’s no hope. But instead, I’d argue there are countless creative ways to raise capital to solve your short-term crises so you can focus on long-term solutions for building your revenue.
Because managing cash flow, especially when there never seems to be enough of it, is a standard part of business that will test your resolve as an owner. It will also stress your ability to strategize beyond what you thought was possible, but if you can master the ability to raise funds when you need them and maintain a more steady revenue stream for your business, you will slay this.
So, let’s talk about 12 creative ways you can raise capital in the short term.
Paypal Working Capital Loans
If you need cash yesterday, traditional business funding may take too long. It also tends to have more stringent requirements that don’t always fit non-traditional business models.
But, if you’re like most entrepreneurs I know, you have a Paypal account which means you can apply for a Paypal Working Capital Loan. This non-traditional loan method is easy, fast, and simple to get started with. The application takes under 5 minutes and you can get approved in just a few minutes sometimes. Once you’re approved, the money gets deposited in your Paypal account almost instantly.
So, in just a few days, you can have the capital you need to move forward. They have pretty flexible repayment funds that are automatically taken out of your Paypal revenue for the life of the loan. Pretty cool, huh?
Loans From Family and Friends
Now I know, this is probably one of the last things you want to hear (or do). But, when the chips are down and you need some capital, your friends and family can be a great resource to help. So, reach out to your personal network and see if there’s anyone who can loan you some funds.
I recommend making them the highest priority to pay back once the immediate crisis is solved.
Streamline Your Personal Expenses
When you’re getting up and running, being able to live as leanly as possible allows you to invest as much into the business as possible. And sometimes, even after you’re up and running, circumstances will require that you live lean for awhile.
So, consider what personal expenses you can cut so you can reduce what you need to take out of the business to survive. Is it time to downsize your car? Can you cut your housing expenses? When I started my practice, my husband and I sold our fancy car and rented out our house to keep our expenses as low as possible. Did it sting? You bet. But, it made those early months easier to manage and as time went by and the business grew, it allowed me to continue to build the business without the undue stress of covering personal expenses.
As much as it stings, sometimes you have to take a step back before you can take a step forward. Making sacrifices today can allow you to weather the rough patches so you can make big strides in your business overall.
Streamline Your Business Expenses
In the same vein, this is the time to review your current business expenses and cut anything that is not necessary to stay in operation. Put everything on the table for evaluation.
Start by looking at all your fixed expenses for software, tools, and services you use. There may be software or tools that are no longer useful for your business so those should be the first to go. Then, there may be things that are useful but not essential. This is a hard decision to make, but tough times require tough decisions, so consider what actual consequences will result from cutting. And remember, you can always get that software back when you increase revenue if it’s really needed.
Another major expense for most businesses is labor, so it is an essential one to evaluate. Start by considering all your contractor expenses. Can anyone be let go temporarily or permanently without preventing the business from running? It may be nice to have a copywriter or graphic designer on retainer but if they aren’t critical to the day-to-day operations then you should discuss your options with them to cut some costs. A contractor who directly serves clients or brings in revenue is not likely someone you want to cut so be sure to think about how their role directly relates to revenue when making these decisions.
Now, employees. In a scenario where the business is experiencing a serious cash shortage, as much as it sucks you may have to let an employee go. Labor costs are a huge part of the budget so if you’re carrying too many employees it can wreak havoc on your cashflow. Again, focus on any employees who aren’t completely essential to operations or generate revenue first.
If you have any problem employees who need to go, then this should be the motivation to pull up your big girl britches and fire them. A problem employee does more than suck off labor costs, they suck up time and energy that you and your team could be using to solve the current cash flow crisis AND prevent it from happening again. So, take this opportunity to really think about what this problem employee brings to the table to determine if they’re costing you more in terms of tangible and intangible costs than they’re giving back.
Spend Some Time Looking at Ways You Can Provide Value to Your Best Customers
Start with a current client list and focus on anyone you’ve worked with in a limited way or anyone who has mentioned additional work in previous conversations. Think about how you could serve their current and future needs with your existing services or a custom package. If you have several clients that all need a similar service, consider whether a group setting for a workshop, dinner, or mini retreat would be feasible.
Once you have some clarity on how you could serve these clients, reach out to them one by one with a customized offer and an incentive to get started quickly. If you are providing them value and serving a need they already have, you’re sure to raise some much needed revenue at the same time!
Review Upcoming Package Payments
Look at all your current clients with ongoing payment plans and determine if you can offer a discount to prepay their invoices. Whether it’s an annual package or a short term monthly retainer, offering a discount to pay in full will appeal to some clients. This will provide an immediate influx of cash without drastically increasing your workload since you had already committed to the services. Remember, the goal is to provide value to the client that also raises revenue so consider how you can do that when you’re crafting your offer.
Promote an Existing Product or Service to Your List
Providing consistent value to your list each and every week makes it easier for you to make an offer to your list when you have one. They know you, they like you, and they trust you because you’ve shown up for them again and again. This is why consistency is so critical when it comes to communicating with your audience.
Again, the goal here is to provide value for your audience, that’s the only way to raise revenue. So spend some time considering what offers you have available that would serve them. Is there a product or service that’s retired but you could dust off? Is there a product or service you could offer a special discount on? Or, could you bundle some of your products and services together to make them more valuable to your community?
These are just a few ways to make an offer to your list that would only require an email or two and perhaps a landing page. You’re using existing products and services to provide value for your audience in a unique way. The goal here is to make it a time sensitive offer with incentive so you can provide value while also raising revenue in the short term.
Mine Your Inbox
I guarantee if you spend a few hours looking in your inbox you’ll find at least a dozen leads that haven’t converted in the last few months. Review your interactions with them and consider why they didn’t convert. First, focus on the ones that just weren’t ready yet. If all they needed was a little more time before they committed, now is the perfect time to reach out to them. Give them an incentive to commit quickly so they have a reason to start now.
Second, consider leads for whom your offer wasn’t quite perfect at the time. How can you tweak the offer to give the client more value without sacrificing your integrity or your own worth. Sometimes it’s as simple as reconsidering the best way to serve them and creating a new package for them. Again, provide incentives to start quickly when you reach out.
Third, focus on leads to whom you can provide quick results and consider if offering them a limited time discount makes sense. If you can quickly execute on the services they need without disrupting the business, it may be worth taking a little less revenue to solve the short term problem.
Charge for Your Advice
I’ve been guilty of giving my time and expertise away for far too long so if you’re in the same boat, consider how you can start charging for your advice. Paid consultations or strategy sessions are an excellent way to raise revenue and they tend to weed out unqualified leads. If someone isn’t willing to pay your consultation fee, they’re unlikely to sign on for higher ticket services.
And, even if you are already charging for your expertise, make sure you’re charging enough and that you don’t have any other revenue leaks you’re missing around giving advice. For instance, are you answering questions for existing clients that aren’t within the scope of your current work? While you don’t want to nickel and dime your clients, if they’re asking for substantial advice or work outside of what they’ve engaged you for, it is imperative that you address that leak in your business. You’re not only losing money, you’re also wasting time that could be spent on other revenue generating tasks.
Once you’ve determined how and when you’re going to charge for your advice in these ways, put it out there that you’re available for consultations or strategy sessions in every way you can think of. Again, remember to frame it in the sense of providing value but consider what groups you’re a part of that may benefit from your advice. Consider current or potential clients that could use a strategy session. Use social media channels that make sense to promote these sessions.
Expand Your Audience and Host a Webinar or Masterclass
Consider your current products and services so you can select one that would convert well with a presentation. Once you’ve found an item to offer, develop a presentation that will provide value to the audience while highlighting your expertise to provide the service or product you plan to offer. This shouldn’t be just a sales pitch, focus on giving them real value and a window into what you have to offer. The webinars that work best provide the audience something tangible to walk away with even before the offer happens.
Focus on attracting new people to this event rather than promoting it to your current list. (Hint: if you use this as a way to generate new prospects, you can run it in conjunction with a separate offer to your existing list.) This has the added bonus of expanding your audience in the longer term as well as raise revenue in the short term.
A simple way to start attracting new prospects is to run some Facebook ads. This can be a very low cost way to get some new faces for a webinar. If you can scrape up $100 or $200 for advertising costs you could raise some substantial revenue with a solid, value-driven webinar and offer that serves your audience.
Reach Out to a Potential Partner to Co-Host a Webinar for Their Audience
The beauty of developing content for a webinar is that you can host it for a wide variety of audiences. So, once you have the content for your presentation, consider who in your network would be a good fit for both the content and the offer. Then, pitch them on the idea to co-host a webinar for their audience.
Focus on how you’re providing value for their audience and why this is a good fit for both their business and their audience. If you’ve done this in the past, provide them with some details on the revenue raised and what they can expect to earn from the webinar. Be sure to also include what your expectations are for their participation. Do you need them to simply send their audience a few emails and show up? Or, do you need them to participate in a more involved way? The more clarity you can provide on how you can serve their audience and what you expect from them, the better.
Create a New Offer (that you can deliver without a lot of time or expense)
Start by examining what people have been asking you for again and again that you haven’t delivered on yet. Think about how you could fill that need your audience is asking for without incurring a lot of expense or investing a ton of time. When you’re evaluating your options, focus on what would excite you to create and deliver. Your excitement is critical to the success of any offer because how you feel about it will shine through whether you want it to or not. If you’re merely throwing something together because you’re desperate for cash it’s not likely to do well. But, if you’re putting together a stellar offer that will serve your audience and you can’t wait to present to them then you’re setting yourself up for succes.
If you mainly do one on ones, consider how your services would work with a group program. Developing a group course would allow you to provide your services in a new way and make them more affordable as well since you’re spreading the costs throughout the entire audience.
Think about how you provide your services as well. If you mainly work online, how about considering a live, one-day, local workshop? Or, if you mainly offer longer programs that span several weeks, would a one day intensive work for you and your audience? The key here is to get creative in how you structure the offer!
It’s also important here to consider the time and expense required to deliver the offer. You want something you can deliver quickly so your audience isn’t waiting forever. Plus, you want something you can develop without a huge expense on your part since you’re already stretched thin. The goal is to raise revenue, not spend more money, so an offer you can start delivering in a week or two without any major costs is the perfect idea to consider.
So, there you have 12 creative ways to raise revenue in the short term so you can solve the immediate crisis.
Now, once you do that, I want you to establish new habits and new methods of reviewing and projecting your revenue so this NEVER HAPPENS AGAIN.
There are two key ways to prevent short term cash flow crises.
Project Your Cashflow
You should be projecting your revenue out each and every week, month, and quarter. Here’s how we do it:
- Determine all the existing money in the business, including bank accounts, Paypal, and any money in transit.
- Determine all your expected income that is guaranteed, including ongoing retainer clients and any additional payments from clients who have already started working with you.
- Determine all your pending payments that are likely to convert to actual revenue. For instance, if you sell products, knowing with your average weekly sales are will allow you to estimate the income for a given period to make this more accurate. And, if you sell services, knowing how many leads you convert to paying clients on average will allow you to estimate what income you can expect based on your current leads.
- Determine all of your fixed costs for the same time period. Here we’re talking about things that you cannot reduce or cut, the essential expenses you must pay to keep the business afloat.
- Determine any other expenses you’d like to pay during the same time frame. This can include debt payoff, savings, conferences, or other investments into the business but they are not going to sink the business if they don’t get paid.
- Then, do the math. What’s your expected shortfall or surplus? This will tell you whether you’re in good shape and need to focus on business as usual. Or, if you need to find some ways to generate some serious cash.
We do this exercise at least twice a month, typically centered around our payroll cycles. At least twice a month, we estimate our current expenses and current revenue to see if we’re on track. This allows us to address the current month before it becomes a crisis.
I also work closely with our bookkeeper to estimate expenses on a long term basis. He helps estimate our quarterly and annual expenses so we can start planning for those as the year progresses. Between our short term focus and his long term projections, we’re able to react to upcoming shortfalls quickly and raise capital before it reaches critical mass.
Establish a Safety Net
Work towards having at least one month’s expenses set aside in the kitty. This is essential to helping you even out your cashflow because it gives you more time to react to an upcoming shortfall. This buffer provides a cushion to accommodate slow months without derailing your business.
If you’re projecting your revenue, you should have at least 30 days notice before any upcoming shortage. With a month’s expenses in the kitty, you can still pay the current bills while you raise some capital. Notice, I say expenses not necessarily revenue. The first goal is to establish a buffer of a month’s expenses which is often less than your monthly revenue so it can be a bit less daunting.
And if it’s a large number that makes you uncomfortable, start small. You don’t have to wait until you can set aside thousands of dollars in one fell swoop. Start establishing this fund today even if all you can afford is a $100/week. Build it consistently and eventually you’ll have that cushion to help with the ebbs and flows of business that are bound to happen.