Strapped for Cash? Get Creative
HERE'S THE situation: you need to update your equipment, but your financial circumstances say, "There are no funds available." So how do you buy what you need, so you can continue to improve your operating performance, when there's no cash, and no budget approved for needed equipment?
In such a scenario, equipment you have now may seem to be running on "tired legs"; previous budget requests (or financing) were turned down (nothing personal—all capital equipment requests were turned down); equipment breakdowns are leaving your employees discouraged; and lower productivity and increasing spoilage are taking a toll on morale. What's more, production standards are not being met due to lower employee expectations and decreasing equipment performance.
Joe Becker, a respected financial consultant, made famous the line, "Cash is King." That pithy cliché is more true today than ever before. And if you don't have the cash, then your creative thinking needs to be put into gear.
This article is intended to stir your animal instincts and provide you with creative options to accomplish your goals and improve your organization's performance through successful equipment and service purchase negotiations—even when there is no cash available.
Case Study Number 1:
Previous discussions with your press manufacturer have resulted in agreement that your press needs major repairs. The amount this would cost is unaffordable at this time. Cash is really tight, and must be preserved for day-to-day operations.
Recommendation: Take control of your future. Call the press manufacturer. Remind them that:
- They need customers for the future.
- We can pay them only "X dollars."
- You are aware of their recent layoffs in their repair teams.
- You would be willing to pay them "X dollars" spread out through "progress payments" over five or six months.
Such a deal puts their people to work, helps ensure their customer markets for the future and allows your pressroom's performance to improve over five to six months. This, in turn, will fund the payment schedule for the needed repair work, improving employee morale and performance, and boosting your bottom line.
In more than one client situation, I've drawn out this plan, and had the press manufacturer accept it—while also expressing appreciation for my client's creativity.
Case Study Number 2:
We once had a client with thousands of die-cutting board designs (accumulated over a 30-year period), plus countless thermal die designs. They represented assets for producing both packaging and signage.
What they didn't have, however, was a catalog with illustrations of the die designs so they could communicate them to customers and target customer markets.
Working with a graphic designer, in less than 30 days, we had both a printed and an electronic catalog. Each die was numbered, and included a brief description of customer applications.
How did we get the design work produced without a cash outlay? We found a talented "just-starting-out" graphic designer who did not yet have his first set of professional stationery, and traded his design services for his startup stationery set. He was delighted, and so were we.
Note: we made sure our suppliers knew the details of our new communication tool, and its applications. This developed new prospect introductions and referrals almost immediately.
Whenever you need technical and/or intellectual skills brought forward for a project, think through options that might include interns. Locate the closest technical college or graphic arts program and ask instructors to help you find a talented intern. We've found results from such non-traditional resources to be extraordinarily positive—if a pre-visit write-up occurs detailing our expectations.
Case Study Number 3:
Most equipment or technology purchases carry a degree of risk. Questions like "Will we really sell as much as we thought?" or "Do our current customers really need this capability as much as we've heard?" can fill managers with doubt.
How do we reduce the risk of such a purchase by coming to more concrete terms of what's really needed and by whom? And how can we all but guarantee the work that we would need if we make this investment of precious funds?
The answer is simple, but not easy.
Make an appointment with each customer whom you believe will be a user of the capability you are considering adding. Explain why you are asking for the appointment, and why their candid feedback is critical. Tell them up front that whatever information they can share will help you make an informed decision about whether or not to make this investment.
This type of "field study survey" can provide you with invaluable market information. It can also result in your customer/prospect committing through a "memo of understanding" to use your shop for some specific amount of work if you make the investment and meet their specifications.
Armed with this detailed feedback, you can approach your superiors, your financing resources and even your personnel (who will be expected to learn new skills) with a more detailed, time-oriented game plan—with significantly reduced risk.
There's no reason you can't accomplish what you want to accomplish, even if there's no cash up front to fund the projects you want to become reality.
