Ever heard of that adage “It takes money to make money?”
As lots of us in the Millionaire Mind community know that’s just not true. It lends toward confidence and a sense of “safety”. It can make things more expedient, but is money absolutely necessary to, for example, start a business? The answer is no. You just need to learn how to be flexible and to use creative financing to your benefit.
Use Creative Financing To Gain Flexibility
Many millionaires have lost it all, fell into extraordinary debt, and still found a way to bounce back.
“It takes money to make money” is something people to make themselves feel safe and secure in their inaction. Then they don’t have to leave their comfort zones and really go out there and get it. Maybe a lot of people just don’t know that there are other ways to finance endeavors.
That’s why I plan to touch base on a few fundamentals when it comes to looking for capital. The hardest part, believe it or not, is imagination, which is actually easy once you really grasp it. The wealthiest people in the world didn’t get to where they are by doing what everybody else does. Wealthy people use creative financing.
While time can be a factor, there are some basic options to think about before you start:
Option 1: Don’t Start Yet.
Wait. Do something else with your time and skillset that doesn’t require a large sum of money. This is very obvious, yes, but it needs to be said. You don’t have to hit a home run your first time up at the plate. Get a couple of singles, maybe a double, and gain some confidence.
Option 2: If It’s Not Working, Do Something Different.
We all have these plans, sometimes they work, sometimes not so much. What do you do when the Universe says, “Nope, this ain’t happening?” Get frustrated and start beating yourself up? No. Just try it another way the next time.
Learn To Be Flexible With Your Plans
There are people who will wait until they think a plan is totally perfect and seemingly solid before they take any action. These are the types that get easily frazzled and distracted when that rock solid plan starts showing some cracks. You have to be flexible and ready to accept that maybe you need to try something else. Flexibility is the key word here.
There are always means toward starting something. You don’t have to have the ultimate plan right away. Start where you can, where you are, and with what you have. As counter-intuitive as it may seem, one of the first rules of financing is: You don’t need the financing! Change the way you’re going about it.
Common Sources Of Creative Financing
The more common sources of financing are things like bank loans. You could also find someone with collateral who would be willing to co-sign a loan as this is another standard method that tends to be forgotten. Most people started their finance history with a co-signed loan, whether it’s school, their first car, or first credit card. This is another reminder to keep good relations with those closest to you.
Private lending parties are another option, or partnering with someone who has the collateral. The easiest way to get money is home equity. When you have some equity in your home or something else that they can take, getting money is usually not a big problem.
But, now let’s talk about something that can change the whole way you do business. This is going back to the basics of business, which is buying and selling. Only you reverse the order. Pre-sell your product or services before you have to buy or deliver it.
Generate Cash Flow
I have never had a problem with cash flow in my life because I insist on doing this before and during the enterprise. This isn’t just for initial financing, but as an ongoing rule of business. Think about it and ask yourself, “Why should I pay for the product? If you want it, you pay for it.”
The customer is just paying for the product a little early. The typical mentality of business is that people want to see the product before they buy it, even though they’re not really seeing anything except the product’s packaging most of the time
Remember: the mind of a millionaire can’t think like everyone else.
Who says the money can’t come until the customer gets their product? People pre-order things all the time. The key is to create or take advantage of a demand, or even a perceived demand. That’s where marketing comes into play, which if done effectively can be much cheaper than actual production.
By reversing the buy/sell order, you also cut down on carrying costs. Let’s not forget the risks you cut down on by not over-producing and then not selling. Instead, sell to a high volume buyer from a sample or a prototype. For goodness sakes: don’t produce 1,000 or 10,000 of something and then try to sell it! Sounds ridiculous, doesn’t it? But that’s exactly what a lot of people do, people who aren’t in business anymore.
Make that shift now! People don’t have to see the finished product. Some people will insist on it. Great! You insist, too.
See? You can jumpstart an enterprise with a little creative financing and thinking! It doesn’t have to cost you an arm, leg, or mortgage.
Now it’s your turn! Do you have any tips you’ve discovered along the way for creative financing? Share in the comment box below!