Small Business Customer Financing North Pole AK

Of all the ways to bootstrap your new business, getting a customer to help finance your startup might be one of the most difficult. But because of how it bonds your customer and you together, this business financing method can pay some of the biggest dividends.

There are all sorts of reasons that you might be able to persuade an existing or potential customer to help you get started. And there are a number of ways to arrange their involvement.

Customer business financing “may take a lot of different forms,” says Richard Scruggs, director of the Center for New Ventures and Entrepreneurship at Texas A&M University. “And it spans most industries that you can think of.”

Create a win-win scenario

While you can play on your emotional connections with family and friends , most customers or potential customers will look at your proposition with an icy view of the bottom line. So to get them interested, you need to present a good case for how financing your startup is going to benefit them just as much as, or even more than, it will benefit you.

For the customer, the incentive might simply be the chance to invest some money with the promise of higher returns than conventional investments. A customer may be smart enough to realize the business potential of your new company and want to get in on the ground floor. Or they may just figure that you’re going to be a player in their market, and if they help you, at least you can deliver them better pricing or terms.

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