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Old October 10, 2007, 03:56 PM
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Default A scenario to increase my cash flow problems

I've got a scenario in mind that I'd like to put in place.

A little background:

I've got an ongoing business (since spring) selling captured audience advertising, mostly to the restaurant and recreational industries. By "captured audience", I mean people who WILL be taking advantage of these establishments.

Each location accommodated 5 or 6 advertisers, generating between $1500 and $2000, with initial fulfillment costs of about 10 to 15 percent.

Generating the advertisers is a no-brainer. My presentation takes about 60 seconds, and because of the fact that most have partners they have to discuss expenditures with a partner, it takes two or three visits to get a yes or no answer.

I've done five of these so far.

I've recently been working in a small touristy type city, grouping 6 locations together and selling ads for all six for between $1090 and $1890. The problem is that the tourist season is over and most prospective advertisers have already spent their annual advertising budget. Not to say that I haven't been able to do it, (only got one space left to go) but it has been time consuming.

I've also racked up (count them) 12 prospective advertisers who would love to do it, but can't because of their depleted ad budget, but "definitely give me a call next spring".

OK, enough background.

To the point: I'd like to be able to offer monthly payment. (I don't need lectures about the risks involved, I'm quite confident in the advertiser's desire to continue for a prolonged period of time. If they stop paying they're out.)

The scenario I have in mind is this:

1) Advertiser may opt for a monthly payment (increased 20% over cash).
2) Payments are debited directly from their bank account. (I've worked for companies who have offered this)
3) Investor pays me cash payment minus the 20% increase and takes over the monthly payments deposited into their account by the bank.
4) Any moneys not recouped by investor are refunded by me, up to the amount paid for that account.
5) Investor will have recouped their investment on each account plus 20% at the end of the 12 month term.

This scenario gives me the cash I need for fulfillment, commissions, and profits.
It gives the advertiser an easy way to participate and access to a very lucrative audience.
It gives the investor a high return on their investment with little to no risk.

Now I know that there are investment groups out there that buy accounts receivables from businesses. So, I know that this is feasible. But I don't know how to go about it. Any Ideas?

(Oh, and by the way, my own credit sucks. No jobs in Michigan, that's how I got started in this in the first place.)
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