When you’re looking for funding for your small business, you may not have the luxury of picking and choosing where you get it.
Fortunately, there are options for you other than the most common sources: loans, angel investors, venture capitalists. One such alternative financing source has been termed “customer financing.” This technique was popularized several years ago in 2002 by an Australian beer startup called Blowfly.
Liam Mulhall, CEO of the startup, developed a customer base before a single drop of beverage had been brewed. He used the internet to include customers in the design process, allowing them to vote on everything from the label design to the ingredients. Throughout the process, he developed a loyal group of over 10,000 customers before he even began operating. In addition to selling Blowfly Beer, Mulhall also sold equity in his company to these customers-every time they bought a carton!
Blowfly’s innovative strategy had other benefits, as well. Because of the unique offering, they developed a sales base of very loyal customers, and their advertising expenses were essentially zero. Word of mouth allowed them to promote their registered customer base from an initial 140 people (friends of the founders) to more than 10,000. These customer-owners eventually began to receive dividends based on the sales of the beer. This created a further incentive to buy, drink, and recommend Blowfly to their friends.
Customers are a fantastic, but often-overlooked source of financing for entrepreneurs. In addition to providing a service or product, you can also offer them shares in your company. Then, their interests in the company are triple, as they support the company’s goal of profit, believe in or love the product (hopefully), and form a natural marketing team as they essentially do free promotion for you. If it’s a viable option for you, consider raising capital through your potential customers!
How to Get Funded in 90 Days or Less
If you need funding fast, you have to use Crowdfunding.
1. It’s fast. You’ll get the money in just 90 days or less.
2. It’s easy. You don’t even need a business plan – you can get started right away.
3. You keep ALL the money. It’s not debt, and you don’t you don’t give up any ownership in your company either…