Gold Member Login

The Official Dan Kennedy Website


MAKING MONEY WITHOUT MONEY

"The banker asked for a Statement. I said I was optimistic."
Mark Victor Hansen

A little short on cash? Take heart: most entrepreneurial success stories involve one person with little or no money matching ideas, drive, determination, hard work, and other attributes with other people's money. I never let the lack of money (or good credit) hold me back and you don't have to either. If you have a reasonably sound business plan and sufficient commitment to your plan, you can obtain the money you need to make it happen!

In this chapter, I deal with finding the money you need to finance a new business, to reorganize, expand, or diversify your present business, or to buy an existing business. If you happen to have capital and/or good credit, so much the better; I'll show you how to make better use of those advantages. But if you're starting from a "disadvantaged' position, that's okay too.

MONEY ALONE ISN'T THE ANSWER

Money is not going to be your problem. But I also want to emphasize that money is not going to be your solution either.

Dan Kennedy's Eternal Truth #10
If you can't make money without money,
you won't make money with money either.

The business battlefield is littered with the skeletons of entrepreneurs who erroneously believed that a big chunk of cash would solve their problems. I've been there; I've believed that, too. I've sold others on that idea. And I've been wrong. I'm sorry to say that I've wasted well over $200,000 into what oil wildcatters call "dry holes," thanks to a stubborn belief in cash as a cure-all. But I've also taken nothing and made it into something.

The most successful entrepreneurs I know, including those who now have tons of money, are like the main character in the popular television show "McGyver." McGyver is always getting out of a jam by creating some incredible gadget with whatever happens to be lying around. Entrepreneurs, too, sometimes have to turn thin air, spare parts, and other people's discards into resources with which empires can be built. Drop one of these McGyver-type entrepreneurs out of an airplane into a strange city with nothing else but the clothes on his or her back and $5 cash, and he or she will have an office or store opened and be doing business by the sunrise.

The story of Doug W. exemplifies this kind of unique resourcefulness that successful entrepreneurs need. Doug went broke in a big way in a direct sales business and wound up sitting in his bare house, all the furniture gone, and nothing left but a box of 48 copies of the book, Think and Grow Rich, and a dozen broken down auto-dialing (telephone marketing) computers. Doug had used these machines to set up appointments for his salespeople in his now-defunct business. He knew they could work and he believed in them. He had used the books in his classes to motivate his salespeople.

Doug asked himself what resources he could draw on to get some cash. He repaired the auto-dialers so they could be sold as used but operable equipment. Then he got on the phone, calling insurance salespeople, real estate agents, and other salespeople, inviting them to a free seminar on using auto-dialers to increase business. He offered a free copy of Think and Grow Rich to anybody who came to the meeting.

Doug called and invited hundreds. About a dozen salespeople showed up. He nervously stood up in front of the group, explained how auto-dialers worked, how he used them successfully, and how others used them. Then he gave a demonstration and offered a unique "rent-and-try-then-buy" offer on the machines he had in stock. That evening, Doug sold eight machines; in the first month he collected $800 from rentals. He discovered that he had a knack for selling this type of equipment.

In short order, Doug found a manufacturer of auto-dialers and convinced him to sell the machines at wholesale as Doug needed them, without an inventory requirement, franchise fee, or other up-front payment. In the next few years, Doug built a large business, with national advertising and sales representatives, selling these machines. He also used some of the profits from that business to invest in a new idea for computer software, and that, too, turned into a very successful business. Doug went from bankruptcy to big money without borrowing a nickel.

The last I talked to Doug, a couple of years ago, he was grooming replacements to run his companies, personally working two weeks a month, and sailing the Caribbean on his yacht the other two weeks of the month.

WHAT ABOUT RAISING MONEY?

I am not opposed to raising money. In fact, I believe, in most cases it is necessary to "use other people's money" to get a business from some stage to another. I'm not suggesting that you go through your business life avoiding borrowing or raising capital, but I have seen a lot of people borrow huge amounts of cash suffer from the erroneous beliefs in the power of that cash. By itself, cash cannot change things for the better.

The bottom line is that there's no point in getting money before, unless, and until you have a solid plan for matching and merging it with other resources for productive purposes.

© Dan Kennedy 2005. All Rights Reserved.