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New York, NY – Small businesses are finding innovative ways to raise extra cash. A day spa owner sold her spa's services at a discount by e-mailing her list of 8,000 subscribers and offering them a free matching gift card on the purchase of any card worth at least $500. "This way I lock in my customer base, purchase equipment and get the cash flow," she says.
Raising Cash- 7/1/2009
Another way to reel in cash fast is non-linear pricing—charging a higher price upfront with the promise of a discount or freebie down the road. This method invokes the same basic idea as the gift cards: using the customer's affinity for a deal to guarantee future business.
If cash is tight, suppliers may allow you to sell merchandise before you pay for it. Using so-called purchase money financing (basically, seller financing), borrowers give their vendors a Purchase Money Security Interest (PMSI), a lien against goods that the vendors agree to send your business. Once the items sell, the vendors will receive payment.
When possible, turn fixed costs into variable costs. Variable costs may be lowered in tough economic times. Read the full story at wsj.com.