7 Ways To Fund Your Inventory and Grow Your Business

Foreigners Ryan here. Welcome to Freedom Fast Lane. You know, I am always consistently impressed with the excuses that people make about the results that they get in their life. I very firmly believe that the fastest way that you can change any circumstances in your life is to take responsibility for it. When you take responsibility for for it, you no longer are a victim. And when you're not a victim, that means that you can do something about it. I don't care if it is your health, if it is your six pack abs, if it's your relationship, or if it's your business, your income, what stresses you out. The minute you take responsibility for something, the minute you can be free of it because you can manage it and do something about it. That was a longer rant than I expected. But that was born out of an excuse that I often hear that people have when they say that they want to have a business and they don't. And that's because they say their excuses that they don't have money for inventory or they don't have the capital that they need in order to start a business. Hey look, I recognize the role that capital plays businesses. But to simply say I don't have it, therefore I can't is a pathetic excuse. And so I want to go through seven ways that you can fund your inventory and or raise capital to start or scale your business or company.

At one of our in person tribe meetings last fall.

There were 60 to 100 people there. And the big question that came up among people who were trying to scale their business was I'm out of my own personal reserves to fund the growth of my business. I need to sell more in order to be able to float what I need in order to get inventory. And I get that that's a legitimate concern. What was even more interesting to me was when I was interviewing Robert Herjavec from Shark Tank on the stage of Freedom Fast Lane Live. Robert said something interesting. I asked him the question, what is the place where most people spend or invest the money that you give them when you buy into their business on Shark Tank? And he said without question, it's money for inventory. That blew me away. I thought he was going to say advertising, team building, but no, it was funding the sales they needed in order to scale that that really surprised me. So I recognize that inventory is often the bottleneck of really scaling a business. In fact, when I had my, when Sean and I had our yoga products business Zen active, we had a fixed amount of money that we were willing to invest and we could have invested More. We just chose not to, and that kept us stuck. Had we been willing to put more in in order to get more yoga mats on a boat and bring them over here, we could have scaled that a lot faster and we could have sold for a lot more money. But because we didn't, we got what we did when we sold the business, and we got what we did as far as cash flows go. So that that ability to expedite the process of how fast you turn over your inventory is really everything. In fact, I was speaking with one of our Mastermind members. By the way, if you're doing over $100,000 a month in your business and you need to be around people who are doing five and ten times that, you can apply to our mastermind@freedomfastlane.com mastermind, one of our mastermind members went from zero to half a million dollars a month pretty quickly. And he says the secret to his success was simply the speed at which they could replenish inventory. They had a supplier who had really favorable terms. They were able to get inventory very, very quickly, and that was the reason for his success. And one of our tribe members, Clement, has been kind of crunching numbers and is confirming essentially that that's the thing that decides how fast you can grow. How fast you can scale is simply how fast you can replenish inventory, how well you can keep that flowing, and a lot of times that comes down to cash flow. So let's talk about some ways to raise funds, raise money for inventory so that you can grow your business. First of all, I want to mention that just like anything else, raising money or getting funding is a lesson in providing value. Just because you are asking for something, you're asking for someone else's money does not mean that it stops you from or prevents you from being required to provide value. Even more so than in a sales atmosphere, you are required to provide value in raising money. Nobody is doing you favors to fund your inventory or to give you capital for your business. It's providing value just like everything else. If you look at it that way and you say, okay, how can I make this a winning deal for the person who's investing into my business? Now you're in a position to actually successfully raise money because you're not sitting there going, please, Mom, I want some more. So let's dive in. Number one, traditional financing or a line of credit. Last week, there was a knock on our office door. We open it, and it's some dude in a suit. And he walks in, he says, hi, I'm your banker at Chase. I didn't know I had a banker at Chase, but apparently we do and he stopped by. You will be very surprised at how willing traditional institutions are to provide lines of credit or traditional financing for businesses. Even today, even in a post increase of regulations world, post 2008 world, we still have lots of access to lines of credit and traditional financing. If you simply open up a business account and you talk to somebody, they will look at your personal credit, they will look at your assets. But you can certainly get traditional financing or lines of credit so that in a pinch, if you need to have some cash in order to bridge that gap between getting that first round of inventory sold and getting that second round on a boat somewhere, you can certainly secure that through traditional financing. If you just bring up a conversation with whoever your business rep is at just about any bank, it's important for you to have a business account over there which you can open with like 100 bucks. You need to have a business license, which is five minutes on a government website registering an employer identification number. Open up an account, have a conversation about where your cash flow needs are. By the way, if you're selling on Amazon and you need a $10,000 order, there's lots of people who have gotten way more than 10 grand on a first line of credit. Just have a conversation and see what's available. That's number one way to fund inventory and raise capital. Number two, borrow against existing assets. This is often called a collateralized loan. If you've got an E trade account, if you have an insurance policy, if you have money in the bank that you don't want to spend, if you've got any liquid. Able. Is that a word? Any assets that could be liquidated. Liquidated, able, whatever. If you've got assets that could quickly be turned into cash, but you'd rather not, and you want to take advantage of historically super low interest rates, there's something called collateralized loans. They will loan at an ltv, a ratio against the cash that you've got. So if you've got. If you've got $20,000 in a retirement account or $20,000 in a savings account, or $20,000 in equity on a home, you can borrow against that at an LTV of usually about 50 to 70%. So if you go to a bank and you say, Look, I've got 20,000 in the bank, I'm going to leave it there, I want it to keep collecting interest, or you've got $20,000 in dividend paying stock that you're getting 5 to 6% on, you want to let it stay there. And you can borrow 10 or $12,000 against that. At 4%, guess what? You're making money because you're keeping your 5% and that's paying for the 4% that you borrowed winning. So, so what you can do there is take that cash, put that into the business, and let your cash stay in the bank. If you want more on this strategy, check out my YouTube video, which is called How I Got a Tesla Almost for Free. It talks about rather than spending your cash, investing your cash and borrowing against the investment in order to pay for whatever it is that you want to buy, be it a Tesla or, or be it a line of inventory for your business. Number three, put it on a new credit card. When I say new credit card, I mean a credit card that doesn't currently exist. There are plenty of credit cards out there that have introductory 0% interest for three to six months or they'll even let you put bonus points if you transfer something over. So not all, not all suppliers and manufacturers will allow you to put assets on a put purchase on a credit card. But if there is, and you don't currently have the cash to be able to pay that off, or you don't want to take the money out, you want somebody else to pay for it, go get. This is not necessarily financial advice, but one of the options for you to do would be to go out and get a new credit card that has an introductory 0% for six months, put it on the credit card by the time that it arrives at, at Amazon three to four months later, you can take sales with no money out of your pocket and you can pay it off on the credit card. Again, not all manufacturers will allow you to put it on a credit card, but some will. And this is one of the ways for you to float it so you can start taking sales even if you don't want to spend the cash or put the cash at risk in order to do that way to fund your inventory. Number four, Amazon Lending. Amazon Lending is way underutilized. It's fantastic. Right now I have a line of credit at Amazon for half a million dollars. All I go there, all I need to do is go push a button and half a million dollars shows up in my account at a total cost of 2%. So that's the total cost on the loan. I think it ends up being like a 4%.

Yearly cost, but for 10 grand that needs to be paid back in six months, I can have a half a million dollar line of credit show up in my bank account. Now, they only let Amazon lending out of the accounts that have been successfully selling for a year or more. But.

I'm sure you're part of a Facebook group somewhere. I'm sure you're part of the tribe where there are people who have been selling for a year or more and could probably push a button and have money show up and be willing to sign a contract with you where you gave them a few additional points or you gave them equity in your company for the Amazon lending that they borrowed on your behalf. If we think outside of the box here and we say, who do we know that has access to funding? Would we be willing to bring them in as an investor or give them a cash flow position or give them interest on the lending that they give us from Amazon lending? Those are the types of relationships that can be formed in the tribe or in whatever group business group that you're in right now where you have people who have access to that type of funding. Work out a private deal with somebody. Once they borrow the money, they can do with it however they want. So if that means making a few extra bucks by investing in your business and you pay them back or give them a piece of your company, explore that opportunity. Way to raise funds and fund your inventory. Number five, bring on an outside investor. Plenty of our successful tribe members started off with nothing. But. But they partnered with somebody who was an investor in their business, who for 25% of their business gave them $20,000, sometimes less, sometimes more, to fund those first few rounds of inventory, they're a silent partner. If you've got a rich uncle, a retired grandmother, a wealthy mother or father, an investor that's an old boss that has money to play with, strike a deal with them. People like me, people who have money sitting around, don't like to have it sitting around. They like to see it go to work. I fund businesses. My supplement company was an investment for me. My yoga business was an investment for me. These are all places where I'm just putting my cash to work because I know that I can influence the company. I can serve as an outside, an outside investor and advisor to the company and I'll make huge returns on that money. And it's great for the person who's operating the business because they didn't have to put up any cash in the first place. Those types of deals happen in the tribe. That happen everywhere. Those happen everywhere. And that's in the same vein as number six, be an apprentice for a successful seller. If you prove that, that you know how to run a business, if you prove that you know the ins and outs of how a physical products business runs and you go to the owner of that business and you say, I'm starting my own, I'm looking for an investor. I know how to do this. I've done this before in your business. I've done this in XYZ company. I just need an investor to fund my inventory and I'm gonna cut you in on this amount. I'm going to cut you. This is my proposal. You will be shocked at how many entrepreneurs want to diversify. They want to have other businesses that provide passive cash flow for them and they are willing to put the cash that they've made in other businesses to work in your business. If you prove your value to a successful seller and you're going to follow the exact same model to build your business, be it on Amazon, be it blogging, be it, I don't care if you start your own thing and you've proven to that person that you know the ins and outs of that type of business, watch how fast they write you a check. Those that happens all the time in the Amazon community where somebody has a successful business, somebody comes to the table and says, I want to have a business in this market. And somebody says, you know what? I know this business. So if I can serve as an outside advisor, I'll give this guy 25 grand to build his business. I'll take 30% of the company. He never has to worry about cash flow ever again. And we're both super happy. That happens all the time. Those types of connections, by the way, are available to you in the tribe. And finally, the seventh way to fund your inventory and raise capital is my favorite. Sell your way out of it. Look, there are opportunities everywhere, whether it's selling the product that you have in business now or or it is selling something else to fund what it is that you want to build. But look, this is the Internet age. You can pre sell things that don't even exist yet. Go listen to the podcast that we did with Scott Volker, the podcast that we did with Pat Flynn. Both of them advocate and have done a process of selling things before they even existed so that they could fund whatever it was that they wanted to build. How do you do that? You go to an audience, your audience or someone else's audience. You go there, you pre sell the product, you use the cash flow up front in order to fund whatever it is that you're going whatever it is that you just sold. So you get payment up front for you to go have the product made. Heck, we live in a world of crowdfunding now. Listen to the podcast we did with John Lee Dumas. The guy had a certain amount of inventory that he had sitting at a warehouse. He sold through it and used that money from crowdfunding to buy his next round. He used that as his channel. Some people don't even think that far ahead. They just use it as a way to raise the cash that they need in order to get a product out to a core group of customers so they can fund the rest of the inventory but sell your way out of it or sell something out there in order to fund your next round of inventory or the growth of your business. So let's go through the seven again. There's traditional financing or getting a line of credit, borrowing against existing assets, using collateralized loans, putting it on a new credit card, Amazon Lending or partnering with people who have access to Amazon lending, bringing on an outside investor, apprenticing for a successful seller or selling your way out of it by using audiences pre selling the product or crowdfunding. That could be Kickstarter or one of the other many different crowdfunding sites that are out there. Funding and capital are not an excuse to not be in business. It's also not an excuse for not growing your business as quickly as you could. You listen to Freedom Fastlane. You know a bunch of different strategies for growing and for starting a business. These strategies will give you the cash flow to do so if you don't currently have it. By the way, if you need investing partners, they exist inside of the tribe. If you don't have a business yet or you're stuck at a plateau, the training, the funding partners, the access to investors all exist inside of the tribe. And that's open to you@freedomfastlane.com Tribe as always, I believe that business owners and entrepreneurs are the way that we solve the world's problems. Thank you for being aligned with that mission. The world needs you to start businesses. It needs you to have happy customers. It needs you to have empowered employees. It needs you to be free. For you to be the fullest expression of everything that you can bring to this world. Thank you for listening to Freedom Fast Lane and I'll see you on the next show.