Access to capital always ranks as a top issue that faces entrepreneurs.  Today, more than ever before, it’s incredibly difficult to get capital from any of the ‘usual suspects’, like banks or private lenders and investors.  However, a lot of the time, the need for capital is misguided or at least overstated.

First, money won’t save a crappy business model. If you don’t have a strong business model, money isn’t going to fix it for you.  If you don’t know what you should do with the money and don’t allocate it effectively, it won’t do you any good (not to go all political on you, but look at the US government as a case in point- they waste money all over the place).  Most of the entrepreneurs that I meet that really think that they need money need something else- a focus, clients, experience or sometimes, just a clue.  Evaluate what you are trying to accomplish and talk to others who are less emotionally involved to see if the resources that you are seeking really require as much money as you think.

Additionally, entrepreneurs lose sight of the fact that money is just a currency—and one of many currencies at that. It’s something that’s used to facilitate the exchange of goods and services.  But entrepreneurs have other currencies.  You have your time, you have your experience and your own goods or services.  So, if you need a resource, what else can you do to obtain that resource? Can you beg, borrow or barter (I won’t advocate stealing) to get what you need? For example, if you are a massage therapist that needs legal advice, try a trade.

Also, try to sell first when possible and let your customers finance your business.  I met a woman that makes natural body care products who was worried about investing in too much inventory.  We discussed having her adopt a “made directly for you” mantra to go with her all-natural positioning.  She now promises a week turn-around and delivery time so that the majority of her products are sold before she makes them.

In terms of marketing, offer a free trial as a means to gain business.  Instead of spending money on an advertising campaign, I suggested to an airport shuttle service that the owner offer to provide a free charter for a busy hotel as a means to establish a relationship.  That mostly takes his time instead of money for traditional advertising.  It also builds a trusting relationship with a source of significant business.

As you accomplish milestones, build your business and lessen execution risk, investors and lenders will be more available and amenable to you.  But don’t let money be the sole factor that holds you back.