The Countertrade Revolution: How a Startup Metal Manufacturing Company Launched Without Capital
Here's What We Do Better
Our client, a metal manufacturing company based in the United States, was a startup company with no industry experience and lacked the necessary capital to launch their business. Despite this, they had a clear vision and a strong desire to succeed in the metal manufacturing industry.
The primary problem faced by our client was a lack of startup capital. They had no money to invest in equipment, raw materials, or even to cover basic operating expenses. Additionally, they had no experience in the metal manufacturing industry and no established relationships with suppliers or customers.
To generate the necessary capital, we employed a combination of multiple countertrade mechanisms:
To overcome these obstacles, we employed a combination of multiple countertrade mechanisms to generate cash revenue for the client company. First, we used a Counter-Purchase agreement with a foreign metal supplier. Under this agreement, the supplier agreed to provide raw materials to the client company in exchange for a future purchase of finished metal products at a pre-agreed price. This enabled the client company to acquire the raw materials it needed without having to pay for them upfront.
Next, we used an offset agreement with a large domestic metal manufacturer. Under this agreement, the client company agreed to provide specialized metal fabrication services to the manufacturer in exchange for a percentage of the revenue generated by the manufacturer’s sales of the client company’s finished metal products. This provided the client company with a steady stream of cash revenue and allowed them to establish a relationship with a major player in the industry.
Finally, we used a tolling agreement with a third-party metal processing company. Under this agreement, the client company agreed to provide raw materials to the processing company and pay them a fee to process the materials into finished metal products. The client company then sold these finished products to customers at a higher price, generating cash revenue.
These countertrade mechanisms enabled the client company to acquire the raw materials and equipment needed to launch their business without having to invest any money upfront. The counter-purchase agreement generated $500,000 in cash revenue in the first year. The offset agreement generated $1,000,000 in cash revenue in the first year. The tolling agreement generated $700,000 in cash revenue in the first year. In total, these countertrade mechanisms generated more than $2.2 million in cash revenue in the first year of operation, allowing the client company to quickly establish itself as a leading player in the metal manufacturing industry. The business was so successful that other companies started to seek out partnerships with the client company, and the client company had to start turning down requests for collaboration.
HOW WE CAN HELP YOU
ACHIEVE SIMILAR RESULTS
We specialize in helping businesses like yours secure funding and launch successful operations, even in the face of financial obstacles. Our team of experienced professionals understands the unique challenges that startups face, and we have a proven track record of implementing creative solutions to help our clients achieve their goals.
Just like our metal manufacturing client, we can help you secure funding and launch your business even if you lack capital and industry experience. We will work closely with you to understand your business and the industry you operate in, and we will develop a comprehensive strategy that leverages the strengths of your business to secure funding and gain a competitive advantage.
Our approach is tailored to each individual client and their specific needs. We will help you by
Identifying the most suitable countertrade mechanisms that align with your business model and goals.
Negotiating with potential partners and suppliers to secure the best terms and pricing.
Setting up and managing the various agreements and contracts required to implement the countertrade mechanisms.
Providing ongoing support and guidance to help you navigate the complex world of trade finance and ensure the success of your business.
Don’t let a lack of startup capital hold you back from achieving your business goals. Let us help you secure the funding you need to launch your operation and differentiate yourself in your industry. Contact us today to learn more about how we can help you achieve similar results to our metal manufacturing client.