Patrick owned a small pharmacy that had been struggling in recent years. Rising overheads, declining sales and a burdensome debt situation were some of the factors that were crippling the cash flow and profitability of the business. Patrick was in a quandary – there wasn’t enough capital to either cease or continue operations.

To pay off long-standing bills and restock his store, Patrick tried to obtain additional financing, but his poor credit rating prevented him from getting another loan. In desperation, he decided that the only option to generate extra cash was to have a massive sale on most of the items that had been sitting in his establishment for a long time.

With little concern about the original cost of his ‘dead’ stock, Patrick slashed prices on all non-performing goods to J$1,000 and less. Then he put up sale signs and displayed some of the articles on a table outside the store. To his surprise, during the first week he made over J$40,000; and the increased traffic also boosted his sales of regularly-priced items in the store.

Within a month, Patrick was able to use the funds generated from the fire sale to replenish the faster moving inventory items and start paying down some outstanding debt. The answer to his problem had always been sitting right under his nose – he just needed to increase incoming cash by creatively moving what he already had in the store.

Debt may not be a good option

When faced with a financial challenge where extra money is needed to pay bills, service debt, or purchase stock, many people try to look for outside sources of funds to take care of their shortfalls. Whether by borrowing from financial institutions, friends or family, they often choose to use loans to prop up their cash flow needs.

In many cases, opting for debt only provides short-term relief as the added costs of servicing the loans can further cripple their cash position, leading to long-term grief. For most cash-strapped persons, there are other solutions that can be used to generate extra money in a jiffy, which involve using the resources that they already have.

You already have what you need

You don’t have to be a business owner with excess stock to sell, in order to find ways to increase your income. The question to ask yourself is – “What do I already have in my possession that can be turned into cash?” The answer may very well be found in your physical or intellectual assets that have been underutilised or completely ignored.

This income-generating strategy is not about making elaborate plans to develop a small business; it just requires you to make creative use of the property and skills that you have right now. You could have idle space in your backyard, a living room full of decorative trinkets, a sewing machine in the closet, or a knack for writing; think how these resources can help you to earn money.

Let it go and let it earn

Candice had reached the end of her rope. She was sick and tired of paying out most of her salary to various loan agencies every month. Dedicated to the fashionista lifestyle, she had racked up excessive debt to finance her acquisition of trendy items of clothing and shoes. Now she was caught in a never-ending cycle of one payroll loan to the next.

When her recent attempt at debt consolidation was turned down, Candice decided to take drastic measures to find money to pay off her loans. She raided her closet, which was overflowing with the expensive garments that had got her into trouble in the first place, sold most of the items at rock-bottom prices to friends and family, and cleared three of her loan balances.

Turn creativity into cash

David was in full-fledged panic mode. His wife was due to have their first child in a few months, and cash flow was already tight. There was no room in his budget to absorb the extra expenses of a new baby. He knew that asking for a pay raise would be an exercise in futility as his employer was also struggling to make ends meet.

Racking his brain for income ideas, David remembered his grandmother’s recipe for potato pudding that she had used to create mouth-watering desserts. With his flair for baking, he decided to make a muffin-sized version, which he offered for sale at his workplace. Before long, multiple orders were coming in and he was able to generate a steady side income.

So think carefully – what possessions do you have sitting idle at home? What productive talent have you been sitting on? If you’re in need of extra money, I believe that you already have all you need right now to generate some income. Be innovative, determined and bold; and exploit your existing assets to make more money.

Copyright © 2012 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, November 29, 2012

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Cherryl is a money coach and business mentor, and founder of Financially S.M.A.R.T. Services. See more of her work at www.entrepreneursinjamaica.com and www.financiallysmart.org. Contact Cherryl