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Will Peña MBA

How to Finance Your Entire Business (Without Using Your Own Money)

Updated: Aug 9

Sometimes, one of my biggest frustrations is finding money to pay for my business.


Or finding money to pay for everything else in my business, like:

  • Marketing

  • Software

  • Inventory

  • A virtual assistant

  • An important direct hire

  • Or other necessary business materials.


It’s because the old adage is true. In business, you need to spend money if you want to make money.


It’s a catch-22 that I wish I could get away from.


Can you relate?


Well, this all changed for me when, one day, I desperately needed marketing, but I was strapped for cash. So, I decided to get creative and find another way to finance my business.


I went to a marketing company and asked for marketing services. They told me the cost, and though it was high, I didn’t blink. Instead of walking out the door, I negotiated with them. I asked them, “If I can bring you 5 new clients, would you do my marketing for free?”


They were taken aback. But they said yes, even though I knew they didn’t think I could do it. 


Well, that same month, I brought them 5 new clients. And they were not only very happy, but they also gave me my marketing for free. 


So, I was able to finance my marketing for the next few months without using my own money.


From then on, I learned a valuable lesson: I never have to use my money to finance anything in my business. 


A decision that has changed everything in business for me. 


Why Entrepreneurs Get Sucked Into the Money Trap


Money is usually the biggest obstacle for entrepreneurs. As a matter of fact, a lack of funds is the second greatest reason for business failure as of 2024. 


In other words, without enough funds, you can't market, hire, or sustain yourself while your business takes flight. 


Most entrepreneurs fail because they rely too much on personal savings, credit cards, or even outside investments to support their business. This usually leads to overwhelming debt, financial burnout, or loss of control of their business. 


On the other hand, creative financing can help you overcome this challenge because it makes sure you have the resources you need to succeed without the usual risks.


Today, I will show you how to use creative financing to fund your business without using your own money. 


By leveraging these strategies, you can fund every part of your business, including:


  • Marketing

  • Sales

  • Inventory

  • Hiring people

  • Software

  • Etc. 


So you can get your business off the ground and grow without taking on any debt, unnecessary risk, or giving up control.


What is Creative Financing?


Creative financing is resourcefully finding other ways to fund your business without using your own money.


Most entrepreneurs don’t even believe this is possible, which is why they go into debt to fund their businesses.


But why use your own money when you can easily use other people’s money to fund your business?


You see, if you fund your own business, you are limited to only using the funds you have. But when you use other people’s money to fund your business, your finances become unlimited.


So you can grow your business as big as you want because the money supply is no longer dependent on you. Instead, when you use creative financing, your money supply is dependent on thousands of other people you can get all the money you need from.


In this article, I am going to focus on teaching you the 4 Best Creative Funding Strategies. These are:


  1. Letting Customers Finance Your Business

  2. Partnerships and Revenue Shares

  3. Presales and Deposits

  4. Crowdfunding


 

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The Big 4 Creative Financing Strategies


Letting Your Customers Finance Your Business


The first and most effective way to fund your business is to let your customers finance your business. This means using your profits from every sale to get more customers.


The key to making this strategy work is first knowing how much it costs you to acquire each customer (CAC) and how much profit you make from each customer (aka long-term gross profit or LGPT)


The idea is that as long as you make more money from each customer than you spend in acquiring the customer, you will have all the money you need to grow your business forever.


For example, Imagine it costs you $100 to acquire one customer (CAC), but you make $500 profit from that customer over his lifetime. This means that you have an extra $400 that you can use to acquire more customers and keep as profits.


So next time, you can use $100 from the $400 to get another customer and make another $400. Then you do it again, and again, and again. It is a sweet and profitable cycle that never ends. 


The best ratio for getting customers to fund your business is 3 to 1. This means that for each dollar you spend on acquiring a customer, you make $3 back in profit. And anything above this is pure gravy (profit).


Now, if you are not getting 3 to 1 on each customer, then the simplest solution is to raise your prices. Another option is to sell each customer more additional products or services through upsells. Both of these ideas increase the lifetime value of each customer, which gives you more profit, which makes it easier to get more customers, and keep this cycle going forever. 


Partnerships and Revenue Shares


Starting partnerships and sharing revenue can be a big win for your business. This strategy lets you use other people’s skills, tools, and money to help your business grow without having to put out your own money upfront.


For example, imagine you have a great product but not enough money to market it. By teaming up with an influencer who likes your product, you can ask them to promote it in exchange for a part of your future sales. This way, you don’t need to spend much money upfront, and both of you benefit if the product sells well.


Or, as I did with my marketing company, you can bring value to a partner in other ways. For example, you can offer to bring them more customers for their services. Or, you can barter your services if they need your expertise. You can also provide your services for free to their customers to gain access to their community. Last, you can find out what they need and help them get it, provided they give you value in return.


The number of partnerships you can create is endless. The key is to have something of great value to exchange with them. Either you provide it, or you help them get access to someone else who can provide it. 


Presales and Deposits


Presales and deposits are when you sell your product or take deposits before your product is ready. This means customers pay in advance, which gives you a lump sum of cash you can use for your business needs. 


For example, imagine you’re developing new software, a tech gadget, or a training program, but it’s not finished yet. You can offer customers a 20% discount if they pre-order now. Or, for software, you can give them lifetime access if they prepay now and forego future subscription charges.


You can use the money you get from these orders to help you pay for making the software, gadget and program. This way, you don’t need to spend your money but still get all the financing you need to make or market the product.


Also, when customers pay upfront, it shows they believe in your product. It also builds a loyal customer base because they feel like they’re part of something special from the start.


Crowdfunding


Crowdfunding is another great way to get money for your business without using traditional loans, getting investors, or using your own money. By sharing your idea on websites like Kickstarter or Indiegogo, you can get people to support your product with their money. This also helps you raise funds while seeing if people really like your idea or not.


For example, one of my clients had a new tech gadget they wanted to test in the marketplace. He used Kickstarter and Indiegog to validate his idea. In just four months, he collected over $1 million and had all the money they needed for inventory and marketing. This also validated for him how much the market really wanted what he was offering.


Ultimately, crowdfunding works because it lets you raise money and test your idea simultaneously. Supporters give you funds to create your product, and their interest shows that your idea is good. Plus, you build a loyal group of fans who can help promote your business in the future.


Action Plan (How to Fund Your Business Without Using Your Own Money)


Let Your Customers Finance Your Business


  1. Find your customer acquisition cost (CAC) and profit (LGPT) ratio. If it is not 3 to 1, or you want to increase it, then:

  2. Raise your prices.

  3. Identify opportunities to offer higher-priced products or services.

  4. Effectively upsell and cross-sell new products and services to your customers.

  5. Reduce your cost to acquire customers by focusing on free tactics like referral marketing or content marketing.


Partnerships and Revenue Shares


  1. Make a list of individuals or companies with whom you can exchange value. These could be influencers, manufacturers, distributors, marketers, or other startups.

  2. Reach out to them and offer them to partner. If you get an agreement, then:

  3. Make sure both sides understand their roles and responsibilities. Write down the agreement to avoid misunderstandings.

  4. Trust and communication are key. Be open and responsive, and work together to solve problems.

  5. Regularly check how the partnership is going. Track sales and profits to ensure both sides are benefiting. Be ready to make changes if needed.


Presales and Deposits


  1. Create an irresistible presale offer for your upcoming product or service.

  2. Tell people about your presales on your website, social media, and email.

  3. Offer a limited-time, irresistible special deal for a short time to make people act fast.

  4. Keep your pre-order customers informed about progress so they stay excited.


Crowdfunding


  1. Pick the crowdfunding platform you will use (Kickstarter, Indiegogo, or both).

  2. Design your landing page and clearly explain your product and why people should support it.

  3. Show your product in the best light with high-quality visuals and video.

  4. Offer rewards and props at different tiers of support.

  5. Regularly update your supporters and keep them excited about your progress.


Conclusion


In conclusion, financing your business without using your own money is not only possible, but it's the way to go if you want to make millions.


You can raise all the money you need using creative strategies, such as letting customers finance your business, forming partnerships, conducting presales, and crowdfunding.


These methods help you save your own money and grow your business faster.


Remember, using other people's money is key to success. It opens up unlimited growth opportunities and keeps you free from debt.


So, start thinking outside the box. Implement these strategies and watch your business explode.


Let’s make millions together!


Will Pena MBA


P.S.: Want more creative financing ideas to fund your business? 


Join our Million Factory Skool Community and get all the training, resources, and support you need.


Right now, it's 50% off. (Normally $99/mo, now for a short time, $49/month).


Join our Millionaire Factory community here: https://www.skool.com/0-to-1m-in-12-months-7035/about


TL;DR

  • Running out of money is the second biggest reason businesses fail.

  • It’s because entrepreneurs use their own money to finance their business.

  • A smarter option is to use creative strategies to grow your business faster and save your money.

  • The Big 4 Creative Funding Strategies are

  • Letting customers finance your business by increasing customer value through raising prices and upsells.

  • Forming partnerships and sharing resources and revenue at the back end.

  • Get presales and deposits by using irresistible offers to motivate customers to pay upfront.

  • Use Crowdfunding to access crowds of supporters to support your idea before you build it.

  • These methods help avoid risk, debt and open unlimited growth opportunities.

  • Ready to learn more? Join The Millionaire Factory Skool group now: The Millionaire Factory Skool.


 

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