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Recommendation
When Michael Dell built computers in his dorm room in the 1980s, his customers paid him in advance. When apparel retailer Banana Republic first opened, it charged $1 a copy for its catalog and used the proceeds to build its inventory. Both companies exemplify what management professor John Mullins calls “the customer-funded business,” a commonsense approach to financing a company that avoids needed venture capital and bank loans. Instead, savvy entrepreneurs use their customers’ money to fund their growth. Mullins makes a compelling case for his model and its variants, and he illustrates the strategy with real-world examples. getAbstract recommends his guidebook to entrepreneurs curious about this alternative way to finance new ventures.
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About the Author
John Mullins, PhD, is an associate professor of management practice at the London Business School. He is the author of The New Business Road Test and co-author of Getting to Plan B.
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