Maybe you need some seed capital to buy some inventory or perhaps you need to pay for some advertising space.

Here are some ways for you to raise capital for your business:

1. Fund it yourself with savings. This is a common way to fund your business and you tend to watch these dollars closely. However, there’s a lot of risk, too, since you’re spending the very cushion you’ll need to rely on if you fail. If you do this, you might want to put your savings into 2 tiers – one tier you can borrow against and another tier that you refuse to touch, “just in case”.
2. Fund it with loans. This in itself is an entire spectrum. Some loans, like a small business loan or a renegotiated mortgage can give you some money without necessarily stinging you with high interest or massive payments. Credit cards are an all-too-common way to fund a business and the occasional success story of a credit-card-funded business does a disservice to the entrepreneurial community. Loans might be necessary but a cautious course is needed.
3. Fund it with grants. Grants can be a nice way to get money for your business but it isn’t always easy to get them. There’s lots of competition and you sometimes can spend an inordinate amount of time complying with grant requirements. I would suggest that this is a good bonus that you can use to catapult your business to the next level but shouldn’t be your primary capital injection model.
4. Fund it with revenue. This one makes sense once you start earning revenue, and I hope that you always set aside some money for operations, some money for a cushion, and some money to invest in the business. But if you don’t have a lot of revenue, or if you don’t have any at all, obviously this may not be a choice. (However, you might consider revisiting your business model to start smaller, just to get some cash flow. Then grow from there).
5. Fund it with investors. Investors represent a great way to fund the business because they can provide capital plus their expertise. However, there are many challenges including: You don’t want to fund it with family and friends because that is a recipe for disastrous relationships. You want to be careful how vocal your investors get because you can spend all your time worrying about them rather than running your business. And, you need to watch what you commit to because you might end up giving up too much equity or getting saddled with bond payments you can’t afford.

There are other ways to fund business growth and I found some interesting ones here. These aren’t all perfect ideas for everyone – you’ll need to make sure they match your business – but you might find one that gives you the money you need to make more money!

Jessica Routier, IAC-EZ

1. He could do web writing, which tended not to pay so well (for people who were as new as he was)
2. He could write for magazines, which tended to pay considerably better.

The choice seemed easy, right? But consider this: Writing for the web meant getting paid the same week via Paypal while writing for magazines meant waiting up to 6 months before a check was mailed (because magazines pay after publishing and usually take a couple of months to publish an article).

That changed his thinking: A small amount of cash today versus a large amount of cash in the future. Given his circumstances – jumping right in with no safety net of alternate income – he started with web writing to pay the bills. Slowly he incorporated more and more magazine writing into his work but in the early days, he told me, it was nearly 100% web writing.

Although things might be different for whatever you do, the reality of cash flow opportunities is probably similar. You may have to accept smaller projects on an ongoing basis in order to keep the cash flow coming in, even if it’s not the gigantic windfall that you could have in months or years to come.

I’m a big believer in cash flow. Cash flow is huge and often under-appreciated by small business owners. In my opinion, cash flow with a little bit of profit margin is far superior to larger, slower, and irregular payments that have larger profit margins.

In thinking about increasing your cash flow, think of it like a hose. Let’s say you want to water your garden but when you turn on the hose, only a trickle comes out. You want to not only increase the amount of water coming out of the hose but also the pressure with which it comes out.

With your cash flow, it’s the same thing: You want to increase the amount of cash coming into your business but also the amount of times it comes into your business (the “pressure”). You can do this by increasing the number of clients you have, increasing your prices, getting paid in installments, creating passive income opportunities like ebooks, creating membership sites that accept regular payments, keeping on top of your receivables, and accepting advanced payment for discounted service.

Your business will be healthier when you turn up the faucet and increase the amount of cash and pressure which with it shoots out of your sales pipeline and into your business.

(And as an added tip, do what my freelancing friend did: While you may have to accept those smaller, faster-paying jobs early on, slowly try to increase the number of higher-paying, slower projects so that you’ll eventually replace your cash flow entirely with those higher payments).

Jessica Routier, IAC-EZ

And no one buys. Do you keep marketing it? Many do. After all, they’ve put so much into it.

In his book “The Dip”, Seth Godin talks about how the modern myth is that winners don’t quit. He says that’s not true. In fact, winners quit all the time. They just quit the things that don’t make sense to continue.

Godin’s book is okay and I did find it thought provoking but I wanted some more practical advice. And I found it in this article by Jason Cohen who has a blog on ASmartBear.com. You can read the blog here. In the blog, Jason talks about how projects we own are more difficult to quit after we’ve invested time and money and effort into them.

After we’ve sunk money into something, if it doesn’t pan out, we should kill it and move on. But that is so difficult to do. I’m realistic enough to know that you can’t always do that. And, I’m optimistic, so I like to think that with a slight change you enjoy success from it (or, at least win back your investment). So, if you have sunk money into a project and you know you should kill it but don’t want to, here’s what I suggest doing first:

1. Check out the metrics that you’ve been using in your sales. (Note: If you haven’t been using metrics to track sales, that’s mistake number 1. Go back and add metrics and wait to see what they tell you). Make some minor modifications to see if those changes help.
2. Pass it off to a friend or mentor or coach who has some insight. Perhaps they can look at the project and they may immediately see if there are specific parts that are holding you back.
3. Convert the project into a joint venture and ask someone else to fill in some gaps. Perhaps their value add or their network or even just the addition of their name on the project can make all the difference.
4. Look at selling the project. Depending on what it is, you might be able to sell it as a complete package (like a turnkey business, for example) or break it up and sell the URL on a domain auction and sell the product to a private label rights reseller.
5. Give it away for free. Perhaps the project itself will still be valuable for you as a marketing tool. Give it away for free (or at least a portion of it) to generate some positioning equity.

If those 5 things don’t work, then you might consider killing the project and walking away, but try those things first and see what happens.

Jessica Routier, IAC-EZ

I think saving money is an art more than it’s a science. I say this because I see lots of businesses trying to save money on the wrong things. Sure, the dollars make sense but there are other factors to consider! One example I see this in is marketing: Lots of businesses will hire low-cost marketers who may not be fully qualified to do the work, but they hire them instead of a more qualified person who costs more. Consider, however, that the more qualified marketer can create returns that not just higher but proportionally higher than the under-qualified marketer. (Clarification: I’m not a marketer so it doesn’t matter to me what you do, but that’s just an observation I’ve made).

So, how can you save money wisely? I don’t think we can simply ask the question “Can I get the same thing for a lower price?” even though that’s often the question asked. Instead, I think we need to ask the question “Can I get the same results for a lower price?”

That’s a big difference. To use the marketing example: The answer is “Yes” to the first question but (in my opinion) a resounding “No” to the second question.

Other considerations need to be made, too: For example, which of your choices is going to scale with your business as it grows? It may be that neither your more expensive or your cheaper option will scale appropriately and you need to find a third alternative. And consider the non-dollar cost to you in terms of time and effort: Lots of entrepreneurs accept a lower-cost solution which requires them to do more of the work. That’s not necessarily a bad thing if you have the time but you need to make sure if you have the time!

I’ve started to collect some money-saving ideas here. Not all of these ideas will be right for your situation, but they may give you some ideas to start. Check them out and if you have your own great money-saving ideas, feel free to add them to the comments.

How to Cut Costs In Business
Five Tips for Beating Inflation
Money-Saving Tips Anyone Can Follow
10 Easy Ways to Save Money In your Business
Cut Costs Without Cutting Muscle and Brain

Jessica Routier, IAC-EZ

But today, things are a bit different. And when I say “a bit different” I mean “way, way different”. You’re a number, in spite of what the feel-good banking commercials tell you. You’re a customer number to the minimum-wage bank employee and you’re a credit rating number to the lending manager who has never met you and has no power to make lending decisions.

As banks consolidate and evolve, as they drop bad credit customers and good-credit-but-non-profitable customers, it makes sense for business owners to branch out and hook up with more than one bank.

In doing some research on this, I found a short but insightful article on exactly this topic in BusinessWeek.  They suggested that customers have a depository relationship with one bank and a long-term lending relationship with another. This is not a bad idea.

It seems counterintuitive because you would think that we should have one good business relationship with one financial institution, and banks market to current customers to convince them of that. However, if your lending habits aren’t in their best interest, they won’t think twice about cutting you out. And when it comes to your credit rating, it doesn’t matter how many financial institutions you’re with. What matters is your debt load, so spread it around!

Take it upon yourself to proactively diversify your banking relationships so that, should one of your banks fold or cut you loose, you’ll be inconvenienced but not down for the count.

Jessica Routier, IAC-EZ

Step one: Go down to the Reconcile Deposit Accounts, and on that page click the Add New Account button. 

Step two… oh. There’s only one step. Yes, it’s that EZ!

First, the overarching concept: We will understand the consequences of our spending when we are connected to money. Years ago, our parents or grandparents would spirit money away into an envelope and when they had enough they would go to the store and buy whatever they were saving up for. Although we tout it now as a discipline, there weren’t a lot of other options. As a result, they were highly connected to their money because they could hold it in their hands and understand that the value it represented had a physical, tactile feeling. Today, we’ve lost that connection to money: Our credit cards, debit cards, and online payments have created a disconnect, making it more difficult for us to understand the value of money we have and the value of money we don’t have.

Now, lest you think that I’m getting too philosophical on you, let me try to make a couple of connections:

As a consumer, this should be a cautionary note for you: Businesses want to make it easier for you to spend your money. Therefore, financial organizations create ways to make the transaction process as simple and painless as possible, as if it were a non-event. Let’s compare two transactions: The first transaction: My grandma wanted to buy a new arm chair for her living room so she would save up her money under a mattress until she had enough. Meanwhile, she would shop around for the right chair. When she had enough money, she would shop around for the best value and buy it. Buying something was an event. The second transaction: When I want to buy a chair, I drive down to the local chair store, find one I like, and I tap my credit card on the proximity swipe device (I don’t even need to sign anymore thanks to a chip in my card!). The transaction is a non-event and I have a chair. As a business owner, I would urge you to be cautious about your spending for that very reason. It’s okay to spend, of course, but we need to never lose sight of the value of money.

As a business, you’re on the other side of the equation. A business needs to help a consumer to buy. If you have a good product or service that will provide value for the consumer then there’s nothing wrong with offering it and helping the customer to own it. Your job is to take away as many of the obstacles to selling as you possibly can. Being able to accept credit cards is one way to enable sales now instead of later. Making sure the transaction is fast and painless is another way to make sure the sale happens.

Some of you might read the two paragraphs above and think they are diametrically opposed but they are not. There is a give-and-take tension in the consumer/business relationship but they are not diametrically opposed. Instead, the consumer needs to be cautious and understand the value of money and the business owner needs to make it easy for the consumer to buy.

Jessica Routier, IAC-EZ

The article also references 90210, and I confess that I just might have watched the original show (pictured on their blog) when I was in school. (Awkward silence at that admission). You can read the full article here.

The article reminded me of another article I’d read years ago (which I can’t reference because I can’t even remember where I’d read it or when) that said the TV show “Roseanne” was one of the first shows in a contemporary time period (i.e., not “Little House On the Prairie”) in which the average financial situation of many Americans was realistically portrayed.

The Mint.com article prompted me to think about movies I’d seen and what they can teach us about money. Here are a few tips:

• If you love someone, you jump on a plane and fly wherever they happen to be. Forget about the consequences of your career.
• If you need to make a lot of money fast, you go to Vegas and play poker or blackjack.
• Everyone has the latest and shiniest everything, including cars that are less than 6 months old.
• Young, good-looking people are super-successful without seemingly having to go to school or win the lottery or work hard.

Ultimately, in all media, we see people living with their money as if there were no consequences. That’s fiction, I suppose. However, in real life, we understand (or, we SHOULD understand) that there are consequences to every action we take. During any given moment we can spend or we can invest some combination of time, money, and effort into the things in our lives. If you want your business to be successful, you need to spend time, money, and effort to get more money. If you want a relationship to be successful, you need to spend time, money, and effort to achieve that success. But every time you choose to spend or not to spend, you need to also accept the consequences that result: A business with more or less revenue, a relationship that may or may not have a strong foundation.

IAC-EZ plays a role in that by helping you to see the consequences and impact of every financial decision you make. Ultimately, the more we consider the consequences and understand the give and take involved, the better we can be at investing the right combination of time, money, and effort at the right time for the right results.

Jessica Routier, IAC-EZ

So, since it’s so closely related to what I was just talking about a couple of days ago, I just had to share this article, too. Find it at The Globe and Mail. The article is written by Mark Evans, a consultant who uses content and social media to help businesses get more attention.

Evans writes that customer service is not just about correcting bad things from happening but also about building and leveraging a positive experience. For example, he mentions connecting with the customer to touch base with them and to show them that you value the relationship. And here’s how Freshbooks plays into the subject: Evans quotes Mike McDerment, CEO of Freshbooks, who says that a happy customer provides referrals. Although I might have disagreed with this a few years ago, I think that today’s socially connected world makes that true now. Just look at what interactions are like on Twitter: One person might tweet “boo! Invoicing day. My least favorite day of the month.” And someone else might respond with “Try Freshbooks. I like them.” A simple referral from a happy customer can go a long way.

And just when I thought I was wrapping up the topic, there was a link at the bottom of the article to a blog by Ben Yoskovitz. Yoskovitz is an entrepreneur with an impressive background and lots of interesting things to say and in his blog post , he reviewed the book BAM: Delivering Customer Service in a Self-Service World. His review/summary is incredibly helpful as he lists 9 points from the book that every entrepreneur should pay attention to. Number 1: Tie customer service to revenue and profits. Brilliant! Number 5: Tie customer service to surprise. There are others but those were my two favorites. Read this blog , change your customer service, and transform your customer’s experience!

Jessica Routier, IAC-EZ