Your clients and business suppliers are possibly the most convenient source of funding for your business. Convenient because you have a working relationship with them, your duty is to negotiate the terms of such working relationship to suit the circumstances of your business. For example, asking your clients to pay you an upfront deposit can help you finance a component of all the costs associated with delivering the service to them.
Think about a catering company that charges a couple a 50% deposit two weeks prior to the matrimonial date and a 50% balance on the day before. In this scenario, you don’t have debtor, so you run no credit risk and a bulk of your expenses are financed by your client. The shortfall can be made up by paying your cooking, waitressing and management staff after the event. Better yet, you can ask the marquee, cutlery or equipment leasing supplier for payment terms, this will help you execute the event without having to expand a single cent of your money.
This can be done in almost every business situation, the context may be different, but ultimately your business expenses can be fully funded by your customers and suppliers. You just have to be creative and bold in negotiating the terms of your deals.
