No cash? Then it’s time to get creative

“When you wake up in the morning and need some money for your business, you may think you need cash,” said Karl Dakin, CEO of DaVinci Quest LLC. “But you can leverage publicity instead of cash.”

Dakin was part of a panel of speakers featured during a Peak Venture Group seminar, “Alternatives for Injecting Cash Into Your Company,” at the Garden of the Gods Club.

For instance, if a company can “match the novelty and interest aspects of a large business, it can use the massive advertising budget of that business to help itself and help them (the large company) distinguish themselves from others.”

“If you don’t have cash, what capital do you have?” Dakin asked. “Credibility and knowledge can be more valuable than cash.”

Entrepreneurs and small business owners should consider three-way trades and recruiting resources.

“Then everyone who has a resource is a potential customer,” Dakin said. “If you don’t have cash — it doesn’t mean you’re dead in the water — it means you have to be creative.”

And a business could take the entire lifecycle of a product and break it into a relay race.

“Have another company carry your baton to the finish line,” he said. “Find someone who does it well, pass the baton to them, and share in the outcome.”

Business owners also should do what’s logical.

“Maybe having a strategic partner is better for you than a traditional bank loan,” said Matt Barrett, director of the Small Business Development Center. “You have to do what’s best, fastest and cheapest for your business.”

And the quality of potential deals is improving as people “continue to tweak their products,” Dakin said. “They’re waiting because there’s a logjam of deals as capital has become scarce in the market.”

Angel investors have started investing — barely — since September.

“They’re moving slowly and have a larger portfolio to choose from — so they can be very selective, and their investments tend to be smaller,” Dakin said.

And while the capital markets will thaw, eventually, patience and networking are crucial, panelists told the audience.

“I cannot over-emphasize the importance of networking and getting out there and talking to people and learning from them,” said Jeff Schneider, founder of Entrepreneurial Finance and Accounting Services.

This recession has been a “culling of the herd,” Barrett said. “Times are tough. But there is a light at the end of the tunnel — and it’s not a train. If you’re still in business, hang in there — we’ll pull out of this.”

Entrepreneurs should keep meeting people and establishing connections, friendships and leads.

“You cannot be creative enough,” Dakin said, “until you have all the money you need.”

Retirement roadmap

Americans are inordinately fond of top 10 lists.

And for investors, lists can be helpful in guiding them toward a secure retirement.

Donna O’Bryant, a financial adviser with Edward Jones, recommends 10 steps toward planning for retirement.

The first is to “map out goals for retirement,” including expected income from Social Security, pensions, part-time work — “which can be a significant source of income — and break down spending by necessities and discretionary, quality of life items, such as travel, entertainment and country club memberships.”

The second is to plan for a long retirement.

A couple, aged 65, has a 50 percent chance of at least one of them living to age 90, according to the Individual Finance and Insurance Decisions Centre.

No. 3 is, “start smart with your spending. Try to limit yourself to withdrawing 4 percent in the early years, so you’re not cutting too much into your principal,” she said. Remember that “inflation doesn’t retire.”

An income of $50,000 today, at 3 percent inflation, requires $100,000 25 years from now to maintain the same standard of living.

“Prepare for the unexpected,” she said, which includes having cash reserves, annuity income guarantees and a diversified portfolio.

“You shouldn’t put all your money into any one kind of investment,” O’Bryant said. “And don’t reach for yield. Stocks or bonds that pay abnormally high dividends or interest generally represent greater risk.”

The next step is to “maintain a healthy portfolio,” with long-term care insurance, health insurance, and being proactive about one’s own health care.

“Eating a healthy diet, exercising and having an annual checkup may not only improve your quality of life, but may also reduce your health care costs,” O’Bryant said.

The eighth step in the roadmap is to “keep retirement from being taxing,” by understanding tax laws related to individual retirement accounts and working with a tax professional, “to be sure you’re not behind with taxes or paying them unnecessarily,” she said.

And “define your legacy — if you don’t have a strategy for your estate, the courts or government will,” she said. “Be sure you are in control of your estate and how you want to pass on your assets.”

And, No. 10 is, “remember your annual checkup,” O’Bryant said. “Just like a health checkup, a yearly financial review can help identify issues early, before they become a problem.”

Rebecca Tonn covers banking and finance for the Colorado Springs Business Journal.