Editor’s note: This article was first published in January 2012, during the economic crisis; Start-Up Chile’s grants of up to $40,000 and the presentation of crowdfunding as a US phenomenon reflect that time, and the programme’s terms may have changed.
In an extreme situation, with banks lending only the bare minimum and support schemes that exist but are slow to arrive and not available to everyone, extreme measures are called for.
Some entrepreneurs had to get creative to raise money in unusual ways, which doesn’t make those ways any less viable anywhere in the world. Here are some ways to get money for your business:
1. Go to Chile
The Chilean government grants up to 40,000 dollars to new companies that move there for six months. It’s a good way to get the first capital for a startup. In fact, some new entrepreneurs who set off with their share of doubts saw the light at the end of the tunnel after just one week in Chile. More information at StartupChile.com.
2. Put on a concert
David Collier needed money for his company Ink Floyd (design and production), so he asked several local bands to take part. David would charge 5 dollars a ticket, and the bands would get a share of the takings plus publicity for their professional launch, since the initiative soon caught the attention of the media.
David Collier reached his goal and raised the money his company needed, although he says the money was the least of it: what motivated him most was the willingness and help of his customers and suppliers, and of the local audience who got behind the cause.
3. Sell cereal
The founders of Airbnb were among the most ingenious. While looking for a way to raise money for their website, a site for exchanging holiday homes, they even managed to create a side business. Their idea basically consisted of buying cereal in bulk and packaging it to sell. To do so, they designed a good logo and put the image of the President of the United States on the box. The cereal would be called “Obama O’s“. The takings were such that they found a profitable business in selling cereal.
Has anyone else thought of this business idea?
4. Crowdfunding (collective loans)
In the United States there are various platforms where anyone can present their “need” and thousands of users chip in. Anyone can invest in an entrepreneur’s project by putting in €1, €5, €10 or €10,000. That was the case of TokyoMoto, a company that raised the 20,000 dollars it needed to open its motorcycle repair shop in a single week. Here we present 7 crowdfunding platforms.
5. Ask for money on your blog
Junio Loayza saw it clearly: “I’m going to beg on my blog.” He asked for donations and investors through his blog, where he eventually raised 75,000 dollars, and he also caught the attention of two major investors who became interested in his project.
6. Borrow from your suppliers
You need to know how to negotiate and how to explain the situation properly to your suppliers. In this crisis, many suppliers have stock sitting in their warehouses that isn’t moving because sales have fallen. That is where a good entrepreneur, as a good negotiator, can ask them to leave the goods on consignment and pay for them as the products are sold. At first it sounds crazy, but without going any further, El Corte Inglés itself uses this technique. With this method you don’t receive any money, of course, but you don’t spend it on your first stock purchases either.
7. Win a business idea competition
This way of raising capital doesn’t guarantee success, because we are competing with other ideas and the best one doesn’t always win, but why not give it a try? We have nothing to lose, and we will always have a chance of winning, however small.
As we can see, ingenuity helps when it comes to raising money for our business. In love, war and business, anything goes to achieve our goal.
Featured image: Jimmy Baikovicius, CC BY-SA 2.0, via Flickr.
