IncQuery: Turning Ideas Into Products

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"You don't have to be in that business if you'd rather not be. I'm sure you could find a manufacturer who'd handle the financing and give you a percentage of the total sales for your contributions. In effect, you'd be functioning as a manufacturer's rep with a design capability. Your 'commission' would be somewhat smaller than the profit you'd earn if you handled everything, but at least you could get the deal done without the expense, hassle, and risk of financing the receivables.

"Alternatively, you could go to your customers and see if they'd be willing to finance the sale or at least give you better terms. Six to eight months is an awfully long time to wait to be paid. If your customers really want your jewelry, they may be willing to help you get it made -- for example, by giving you a partial payment up front and the balance on delivery.

"If, on the other hand, you want to handle the financing yourself, your best bet is to go to an asset-based lender. It's true that no ordinary bank will loan you the money you need without a history of profitability, especially if your collection time is six to eight months. Asset-based lenders look at other factors -- your customers' credit, for example. They also charge much higher interest rates than commercial banks and impose a lot of conditions on the loan, but you can probably find one that will do the deal if that's the way you want to go. For more information and a long list of asset-based lenders, check out the Web site of the Commercial Finance Association ( www.cfa.com)."

Long-Term Care for Fun and Profit

I am an insurance broker with two employees working out of a small office. It's a good business, but it needs to change and start growing in a different direction. Our primary product right now is health insurance, which I believe will eventually be taken over by the government. Accordingly, I'm planning to switch in the next year or so to long-term-care insurance as my primary product.

Selling long-term-care insurance will be a challenge. Most people don't like to think about the circumstances under which they may need such insurance or the kind of life they may have when they're using it, but I'm convinced that it's our best bet for the future. So how can I motivate customers to buy such a product? --Dick

"You're not the first person to face this dilemma," says marketing maven Max Carey, founder of Atlanta-based Corporate Resource Development Inc. and CEO of EmCrit, in Morristown, N.J., a developer of communications platforms for fast-growth companies. "I ran into the same issue years ago, when I was working with a company that did retirement planning. The problem was that everyone thought about retirement as the end of life. So we came up with a campaign built around positioning retirement as the beginning of a new phase of life, and we did well.

"You need to do something similar with long-term-care insurance. For example, you might want to package it with other products and services that you could market together as, say, 'The Lifecycle of Peace of Mind.' You might even think about reaching beyond your industry and teaming up with a retirement community, a physical-therapy provider, a fitness center, or whatever. The idea would be to get potential customers thinking in terms of maximizing their quality of life as they grow older rather than focusing on what could go wrong.

"Long-term-care insurance would fit in with that, although I'd definitely try to come up with another name for it. You want to accentuate the positive, as the song says, and that means looking at the upside -- peace of mind, quality of life, and so on. The phrase long-term care has all the wrong connotations."

Having Trouble Sleeping Lately?

Could you use some advice from an experienced entrepreneur who's been where you are and figured out what works and what doesn't? Send your questions to IncQuery@inc.com. We'll find the best people around to answer them. And if you don't like their answers -- well, you can tell us that, too.

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