If you've been following technology-related news, you might have heard that there are about 1,800 high tech companies in Ottawa-Gatineau. That's a pretty mind-boggling number. I wouldn't be able to name more than a few dozen, let alone tell you what they all do. Let's assume most of these companies are small businesses providing services and developing intellectual property (IP). They work on projects for other companies, and depend on contracts with clients. If you're one of these companies, the suggestions below are for you.

Consider the following situation. You've found a client for whom you could do a really interesting and lucrative project. However, the client won't sign a contract with you because they don't have enough funding for the project right now. Do you walk away or approach the situation from a different perspective?

1. Find investors for your client

Your client has a great product idea and knows their market, but just doesn't have enough funding to proceed. You can help others recognize the project's potential, because you believe in your client's idea (if you don't, then you shouldn't be thinking about doing a project for them).

If you're an established company, you may have more contacts than your client if they're just a startup. Introduce your client to friends, family, angel investors, or venture capitalists. You can even introduce them to your banker, assuming they like you! Plus – consider personally investing money and show investors you believe in your client's idea too.

2. Arrange EDC financing for your client

If your client operates outside Canada, Export Development Canada (EDC) may be able to help. This Crown corporation will finance clients who can't afford the full project price at the outset. Export development agencies in many countries usually only finance the export of capital equipment. This month, I was able to share EDC's progressive financing solutions with business colleagues in London, England, who were unaware that EDC finances IP exports as well.

Both capital equipment and IP can be valuable for years. You would be surprised how long airlines use an aircraft before turning it into pop cans. Your clients can equally make lengthy use of the software code, schematics and specifications you create for them.

Let's say you've agreed to develop IP for your client for $100,000 but the client can only pay $15,000 right now. EDC may be able to loan them the rest, or could also partner with a local bank to help them meet their payments. When the project wraps up, you receive the full $100,000 – $15,000 from the client and $85,000 from EDC. Life is good. The client pays back the $85,000 loan to EDC at commercial rates over the next couple of years while you're moving onto your next project. Refer to www.edc.ca for more information.

3. Consider alternative payment options

If your client has lots of promise, explore some creative payment solutions. Perhaps they could pay for part of the project in shares. Their company could do really well and you would profit beyond your measure. They could also pay you with a valuable piece of equipment which they no longer need. Or, they may have extra space you could use, saving you rent. The possibilities are as limitless as your imagination.

4. Loan them your services

If you've explored the other options without success, consider lending your client the money yourself. It's like buying a mattress, where you don't pay until 2008. You provide the services and they pay you when they can.

If your balance sheet is stronger than theirs, lending them the money to finance the project isn't such a scary thought. That client will turn around and give that money back to you with principal installments and accrued interest.

Entrusting them with a loan can cement a stronger relationship – ensuring future business – and obviously prevents great concepts from being shelved. Reaching into your own pocket could be the start of a good thing.

5. Join your client's sales force

Put on your best plaid suit! I don't mean join your client's company, but hit the road with them to help promote their idea and find customers. The reason they might not be able to afford your services right now is because they don't have the marketing skills or the manpower to effectively sell (or pre-sell) their product. You might be able to help them increase their sales, which will in turn help them earn the money to pay you. If you and your client succeed in selling the idea, you will get the project.

Disclaimer

Some of these suggestions aren't for the faint of heart. Although some have worked fabulously for me, others have not. The basic idea is to be your client's friend and show them you believe in their vision. They will want you to be part of their success. If these suggestions have triggered some ideas of your own, feel free to contact me: michael.wakim@fidus.com

Mike Wakim is president of Fidus Systems, an Ottawa-based electronic design services company. Fidus specializes in electronic product design for the communications, aerospace, defence, transportation, automotive, storage and memory, consumer products, biomedical instrumentation and industrial control markets.