When I opened my studio several years ago, I had very little credit available to purchase
equipment. Okay, the truth was I was drowning in debt because of my divorce. There was no way a bank was going to lend me money, so on went the creative thinking cap.
One of my clients had retired from a major Fortune 500 company and was a very successful entrepreneur and consultant. I approached him regarding a loan. I went prepared with a shortened, modified
business plan (as opposed to a long, drawn-out one) that included my ideas, what I would spend the money on and how I would make money through the studio. I estimated how much money I would need for equipment, signs, business cards, a radio campaign and website costs—everything required to get started.
My lender opened a bank account with $5,000 in it and handed me the debit card to purchase what I needed.
Obtaining a loan from a friend is just one way to fund and grow your business, whether it’s a startup or it’s already established. Here are a few more options:
Bartering and Presales
Since my lender was also my client, I was able to resolve the debt with a combination of monetary payback and bartering—that is, providing training in exchange for the money lent.
Bartering your services in exchange for money in the form of a loan is similar to presales, which can be “a very powerful form of both funding and validation for small businesses and startups,” says John Turner, CEO and founder of UsersThink.
“Presales can be an especially powerful option for those with limited
financial resources but a fair amount of social or online reach,” Turner explains. “So those with large
social networks, large newsletter lists or websites with a good amount of SEO benefits could test the waters with preorders on their own site, then promote the offer further and qualify it by saying that only a limited number of spots are being created or a limited number of items are available. This method might be better for those who don’t want to take an ÔÇÿall-or-nothing’
crowdfunding approach. It’s also worth considering if you already have a fair amount of clout and reach.”
I recently used this approach on a smaller, more personal scale, when I needed money for a certification program. I offered a deal to a long-term client: If she would prepay for a larger training package, I would give her an even better per-session rate than she was already getting. I received the money I needed to pay for the certification program up-front—which saved me money compared with paying per month for the program—and she got a great deal.
Another, less traditional way to barter is to work out a deal for the rent or lease on your space. For example, my studio was in an old school building that already housed an established gym. The owners of the gym owned the entire building, and they were excited to add a studio to their tenants, as it would complement what they already offered. We even worked up a joint
membership package. In addition, the owner wanted to see me succeed and knew how difficult it can be to get started, so he offered me a deal on the rent. Instead of a flat rate for rent, I gave him 30% of my membership fees per month. This took away the pressure of having to make a certain amount of money per month to cover the rent, allowing me to focus on my members and clients.
Partner With a Company
Want to host an event, but don’t have the funds up front to do so? Try partnering with a company that is willing to offer cash and product in exchange for exposure.
Several years ago, a PR professional advertising a new product from a large, established international company contacted me to offer this deal: The company would give me the funds necessary to cover marketing, space rental, anything that would be needed for the 1-day event—as well as gift bags with samples of the new product. In exchange, the company/product logo would be included in all
I was able to offer a women’s retreat day that included yoga and a guided snowshoe walk. I used the money for a radio campaign, fliers, snacks for the day and the guided snowshoe fee. The company got the word out about their new product, and I got to host a fabulous day for women in the community.
Chamber of Commerce
Your local chamber of commerce can be a potential source of funding for your business.
For tips on working with the chamber of commerce and alternative financing companies, please see “Creative Ways to Finance Your Business” in the online IDEA Library. If you cannot access the full article and would like to, please contact the IDEA Inspired Service Team at (800) 999-4332, ext. 7
Dear IDEA Fitness Community, IDEA Health & Fitness Association’s staff and members are united in opposing prejudice, bigotry and racism. We denounce all acts and intents associated with these affronts to…
Subscribe to our Newsletter
Stay up tp date with our latest news and products.