Victor Kwegyir's Blog
August 16, 2020
Six steps to navigating the funding process to secure investor cash- Part II
In Part I, we made the case for why there is much funding available to entrepreneurs now than any time in history. We also highlighted the first two major considerations in the process. In this final part we will discuss the rest of the important considerations in the process of accessing and securing much needed funding to start a new business or grow and expand an existing business.
3. What type of funding do I want? – There are a number of funding types available. Funding sources are often classified into different categories such as traditional and non-traditional, internal and external, and equity and debt funding sources. Each of which has its own unique characteristics, requirements, pros and cons. For more details on all available funding sources, pros and cos, etc., check my book ‘PITCH YOUR BUSINESS LIKE A PRO’ for the full details. For instance equity funders, such as Angel investors and venture capitalist organizations invest their money in return for a stake in the ownership of the business. They therefore expect to share in the rewards by way of profits and dividends. Unlike equity investors, banks and other debt lenders are more focused on the assurance of orderly repayment. Grant providers such as governments, local authorities, private foundations and trusts, on the other hand, often have an aim for the grant being provided such as the development of a sector of the economy, a geographic region or promoting the creation of businesses in an economically disadvantaged area with high unemployment. There are other sources such as Crowdfunding, family and friends, etc. It is often a good idea to take advantage of a combination of two or more funding sources, when possible, to raise the finances needed to fund a business. Your choice can also impact on who gets to control the business and how decisions will be made. That is why it is very important to weigh the pros and cons of each option.
4. How much of the industry do I know? – It is essential to have a good understanding of what you are doing and the industry as a whole. It is no good going before investors with no or little knowledge of the industry, customers and market other than your products and services. Investors, most of who are keen on the return on their investment, would want to fund a business that has sufficient market size, able to compete effectively and has a good potential to make profits eventually, at some point, even if not immediately. If you lack the basic knowledge of the industry as a whole, it will be very difficult to convince any investor to back you, no matter how beautiful or exciting your idea may be. The worst case scenario is where an entrepreneur with little research to support their claim, argues that their product or service is so unique with no competition out there. This is often based on little or no knowledge of the market. Whatever you do, always understand that serious investors do their own homework at each stage of the process, and it is to your advantage to know as much as possible of your industry before you approach them. Your knowledge of what exists in the market place and industry can help you come up with better ways of beating the competition and help you win over the investor(s).
5. Management team and experience – At the heart of the process is you the entrepreneur and your team, if you work with a team. Your experience, skill set or knowhow and that of your management team is a major consideration for any investor. Your personality and likability also plays a significant factor in most investors’ consideration, especially equity investors. This is a major consideration for most investors. The higher the amount requested the higher the weight of consideration on this all important factor. Again businesses that are more technical or require special skills will need to prove that the ability of the entrepreneur and or the team are up to the task, to be more convincing.
6. Where do I find investors and pitch to them to win them over? – Where to find the right investors is dependent on which investor category best suit your needs and vision of where you want to take your business. For instance, to get an angel investor on board you will have to do a bit of homework to ensure you find the right investor who believes in you, your business, your values and your vision. Because most angel investors come on board with more than financial returns in mind.
To research and access angel funding.
Speak to industry experts, associations and your own network of business professionals, and attend networking events.
Join or link up with an angel investor network or group to find an investor. Angel networks often act as introduction agencies, matching businesses looking for finance with potential investors. They are also often able to share valuable information with you, such as the general requirements of a specific business angel.
Finding the right investor is a great step, and your ability to deliver a pitch that “paint the kind of picture” that will leave a lasting and positive impression on the investor is crucial to your success in the process. It is a kind of the ‘last act’ that must be well delivered to close the deal. Pitching is all about making a presentation in person, writing or via video to persuade the investor(s) to invest in your idea or business.
The above sums up the basics of the process of going about securing much needed funding for your business.
My final thought is that, there are funds available for business globally. The uncertainties in the global financial markets often causes a lot of investors to seek alternative ways to invest their cash. If you are serious about securing funding for your business, then take it seriously, prepare adequately before you set out on the journey. Always put yourself in the investor’s shoe in all your considerations. Always remember that your average investor is smarter than you think.
Don’t hesitate to contact me if you need help to secure funding or investor support for your business. My network of investors are ever ready to consider your proposal and invest in you and your business.
For in depth information on weighing all the available funding sources, understand what investors look for in their proposal consideration, preparing and delivering a winning pitch to win investor support please check out my book ‘PITCH YOUR BUSINESS LIKE A PRO’, available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.
Victor Kwegyir is a business coach, mentor, consultant and speaker with over 18 years experience in business. Victor offers professional business advice to help start-ups & existing businesses to start and/or grow successful businesses. He is also the author of three successful books, including his latest - “Pitch Your Business Like a Pro”, “The Business You Can Start” and the co-authored book above, “You’ve Been Fired! Now What?” Available on Amazon, BarnesandNobles.com and bookstores worldwide on order. You can order the eBook versions on any Ebook platform, including, Smashwords, iBookstore, iTunes, Kindle, Nooks, Sony Reader, Kobo, and Diesel.
3. What type of funding do I want? – There are a number of funding types available. Funding sources are often classified into different categories such as traditional and non-traditional, internal and external, and equity and debt funding sources. Each of which has its own unique characteristics, requirements, pros and cons. For more details on all available funding sources, pros and cos, etc., check my book ‘PITCH YOUR BUSINESS LIKE A PRO’ for the full details. For instance equity funders, such as Angel investors and venture capitalist organizations invest their money in return for a stake in the ownership of the business. They therefore expect to share in the rewards by way of profits and dividends. Unlike equity investors, banks and other debt lenders are more focused on the assurance of orderly repayment. Grant providers such as governments, local authorities, private foundations and trusts, on the other hand, often have an aim for the grant being provided such as the development of a sector of the economy, a geographic region or promoting the creation of businesses in an economically disadvantaged area with high unemployment. There are other sources such as Crowdfunding, family and friends, etc. It is often a good idea to take advantage of a combination of two or more funding sources, when possible, to raise the finances needed to fund a business. Your choice can also impact on who gets to control the business and how decisions will be made. That is why it is very important to weigh the pros and cons of each option.
4. How much of the industry do I know? – It is essential to have a good understanding of what you are doing and the industry as a whole. It is no good going before investors with no or little knowledge of the industry, customers and market other than your products and services. Investors, most of who are keen on the return on their investment, would want to fund a business that has sufficient market size, able to compete effectively and has a good potential to make profits eventually, at some point, even if not immediately. If you lack the basic knowledge of the industry as a whole, it will be very difficult to convince any investor to back you, no matter how beautiful or exciting your idea may be. The worst case scenario is where an entrepreneur with little research to support their claim, argues that their product or service is so unique with no competition out there. This is often based on little or no knowledge of the market. Whatever you do, always understand that serious investors do their own homework at each stage of the process, and it is to your advantage to know as much as possible of your industry before you approach them. Your knowledge of what exists in the market place and industry can help you come up with better ways of beating the competition and help you win over the investor(s).
5. Management team and experience – At the heart of the process is you the entrepreneur and your team, if you work with a team. Your experience, skill set or knowhow and that of your management team is a major consideration for any investor. Your personality and likability also plays a significant factor in most investors’ consideration, especially equity investors. This is a major consideration for most investors. The higher the amount requested the higher the weight of consideration on this all important factor. Again businesses that are more technical or require special skills will need to prove that the ability of the entrepreneur and or the team are up to the task, to be more convincing.
6. Where do I find investors and pitch to them to win them over? – Where to find the right investors is dependent on which investor category best suit your needs and vision of where you want to take your business. For instance, to get an angel investor on board you will have to do a bit of homework to ensure you find the right investor who believes in you, your business, your values and your vision. Because most angel investors come on board with more than financial returns in mind.
To research and access angel funding.
Speak to industry experts, associations and your own network of business professionals, and attend networking events.
Join or link up with an angel investor network or group to find an investor. Angel networks often act as introduction agencies, matching businesses looking for finance with potential investors. They are also often able to share valuable information with you, such as the general requirements of a specific business angel.
Finding the right investor is a great step, and your ability to deliver a pitch that “paint the kind of picture” that will leave a lasting and positive impression on the investor is crucial to your success in the process. It is a kind of the ‘last act’ that must be well delivered to close the deal. Pitching is all about making a presentation in person, writing or via video to persuade the investor(s) to invest in your idea or business.
The above sums up the basics of the process of going about securing much needed funding for your business.
My final thought is that, there are funds available for business globally. The uncertainties in the global financial markets often causes a lot of investors to seek alternative ways to invest their cash. If you are serious about securing funding for your business, then take it seriously, prepare adequately before you set out on the journey. Always put yourself in the investor’s shoe in all your considerations. Always remember that your average investor is smarter than you think.
Don’t hesitate to contact me if you need help to secure funding or investor support for your business. My network of investors are ever ready to consider your proposal and invest in you and your business.
For in depth information on weighing all the available funding sources, understand what investors look for in their proposal consideration, preparing and delivering a winning pitch to win investor support please check out my book ‘PITCH YOUR BUSINESS LIKE A PRO’, available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.
Victor Kwegyir is a business coach, mentor, consultant and speaker with over 18 years experience in business. Victor offers professional business advice to help start-ups & existing businesses to start and/or grow successful businesses. He is also the author of three successful books, including his latest - “Pitch Your Business Like a Pro”, “The Business You Can Start” and the co-authored book above, “You’ve Been Fired! Now What?” Available on Amazon, BarnesandNobles.com and bookstores worldwide on order. You can order the eBook versions on any Ebook platform, including, Smashwords, iBookstore, iTunes, Kindle, Nooks, Sony Reader, Kobo, and Diesel.
Six steps to navigating the funding process to secure investor cash- Part I
Working with business owners and entrepreneurs at various stages of pursuing their dream is always exciting and very interesting. As an expert with almost two decades of working in the industry, I come across many scenarios that often leave me thinking, why and how can I best help address the situation positively.
Over my professional working life, I've had the opportunity to sit on both sides of the table. As a Risk Management/Credit officer in the bank, where I had the privilege of analyzing and assessing the economic viability of proposals for business loan requests, and also as a business coach, consultant and funding expert, helping clients secure much needed funding for their new business or to expand their existing business.
Meeting new business owners and entrepreneurs is always an exciting time for me, as I get to hear them share their dreams and goals for the business. For those who get in touch to seek funding to grow and expand an existing business or start a new one, I get very excited when they present to me a well written business proposal, which follows a logical argument and makes an undeniable viable case for what it is they need the funding for, and what the potential returns are on the expected investment.
Seven out of ten times however, what is presented often miss out on what I just described above. That makes it a bit challenging, as they often lack the argument and orderly presentation to get through the ‘door’ of the investor(s). Of course, I am always on hand and glad to help to get it in shape before submission to investors for consideration. It makes me appreciate how limited many people's knowledge is about the entire process. At the core of how I work with my valued and potential clients is, helping them gain clarity of the business landscape, strategize and maximize the opportunities to become more profitable and successful in business.
Interestingly, there has never been a time in history where the business landscape is awash with so many funding options other than the well-known traditional options, such as banks.
The growing popularity of alternative funding options presents a huge opportunity to the entrepreneurial community to secure the much needed funding for their business. However, to access these options requires some level of knowledge and dedication to the process to see it through. According to Fleximize, a UK-based direct funding company and web platform, in 2012 the alternative lending market in the UK alone, was worth £267m. The sector was valued at £1.74bn in 2014, and expected to hit the £5 billion mark by the end of 2015. In the USA alternative lenders lent approximately $3 billion in 2013, double the amount from 2012.
In the latest BI Intelligence report, the US has one of the largest P2P (peer-to-peer) lending markets in the world by loan volume, but the UK's is 72% larger on a per capita basis. P2P lenders in the US generated $6.6 billion in loans last year, up 128%.
Europe on the other hand is considered to be the next big market for P2P lending. The alternative finance market in Europe is said to have reached nearly €3 billion ($3.9 billion) in 2014, a jump of 144%, and small-business P2P loan volume in France grew almost 4,000% last year, to reach €8.2 million ($10.6 million).
That provides us with the sort of picture of what is potentially available to entrepreneurs seeking funding to start a new business or grow and expand an existing one.
In this post I am going to highlight two of the six considerations which are great pointers in the process of accessing and securing funding for the business owner.
Do I know what I specifically need? – It is obvious you are on the hunt for investors or funds, only because you have a need for it. However, increasingly I find that a lot of entrepreneurs seem to think any figure, which is often base on a guess work, can be thrown in the mix when asked how much they need. I, however, think that, if you are really serious about this, you must always put yourself in the investor’s shoes and ask yourself, if anyone comes to me to quote any figures or cash amount, without knowing exactly what it is for and how they came by them, would I even consider it? Your answer is as good as mine.
Prospecting for investor support is a serious business and most of them do not have the time to help you come up with what you specifically need, it is up to you to spend quality time and effort to establish that before stepping out to seek their help.
That includes both financial and non-financial support.
Do I have a proposal? – You can’t get funding from any serious investor without a proposal. Period! This may seem surprising to some, but I find that quite common. Many entrepreneurs seem to think they can easily talk their way smoothly into winning over investors to support them without presenting a proposal for consideration. Am afraid, that does not work in the ‘real world’. I am yet to come across any serious investor who does not require a written proposal before giving attention to a request.
As part of the proposal you must have an Executive Summary on hand for the initial consideration of investors. Often, it is the first thing they ask for to help them gain an overview of your business and what you are asking for. Advisedly, this should be just about a page summary of the whole business plan/proposal, and not more than two pages. Equally important is a business owner’s understanding or grasp of the figures, at least the basics, such as, unit production cost, gross margins, gross profits, cost of sales, overheads, net profits, capital requirements, cash flow, both actuals and projections.
No matter about much of a phobia you have for figures and calculations, you must learn to understand the basics of these financials, even if you have an accountant who does all the accounts for you.
In Part II we will take look at 4 more of the six considerations in the process of accessing and securing the funding you need to start your business or grow and expand your existing business.
Don’t hesitate to contact me if you need help to secure funding or investor support for your business. My network of investors are ever ready to consider your proposal and invest in you and your business.
For in depth information on weighing all the available funding sources, understand what investors look for in their proposal consideration, preparing and delivering a winning pitch to win investor support please check out my book ‘PITCH YOUR BUSINESS LIKE A PRO’, available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.
Victor Kwegyir is a business coach, mentor, consultant and speaker with over 25 years experience in business. Victor offers professional business advice to help start-ups & existing businesses to start and/or grow successful businesses. He is also the author of three successful books, including his latest - “Pitch Your Business Like a Pro”, “The Business You Can Start” and the co-authored book above, “You’ve Been Fired! Now What?” Available on Amazon, BarnesandNobles.com and bookstores worldwide on order. You can order the eBook versions on any Ebook platform, including, Smashwords, iBookstore, iTunes, Kindle, Nooks, Sony Reader, Kobo, and Diesel.
Over my professional working life, I've had the opportunity to sit on both sides of the table. As a Risk Management/Credit officer in the bank, where I had the privilege of analyzing and assessing the economic viability of proposals for business loan requests, and also as a business coach, consultant and funding expert, helping clients secure much needed funding for their new business or to expand their existing business.
Meeting new business owners and entrepreneurs is always an exciting time for me, as I get to hear them share their dreams and goals for the business. For those who get in touch to seek funding to grow and expand an existing business or start a new one, I get very excited when they present to me a well written business proposal, which follows a logical argument and makes an undeniable viable case for what it is they need the funding for, and what the potential returns are on the expected investment.
Seven out of ten times however, what is presented often miss out on what I just described above. That makes it a bit challenging, as they often lack the argument and orderly presentation to get through the ‘door’ of the investor(s). Of course, I am always on hand and glad to help to get it in shape before submission to investors for consideration. It makes me appreciate how limited many people's knowledge is about the entire process. At the core of how I work with my valued and potential clients is, helping them gain clarity of the business landscape, strategize and maximize the opportunities to become more profitable and successful in business.
Interestingly, there has never been a time in history where the business landscape is awash with so many funding options other than the well-known traditional options, such as banks.
The growing popularity of alternative funding options presents a huge opportunity to the entrepreneurial community to secure the much needed funding for their business. However, to access these options requires some level of knowledge and dedication to the process to see it through. According to Fleximize, a UK-based direct funding company and web platform, in 2012 the alternative lending market in the UK alone, was worth £267m. The sector was valued at £1.74bn in 2014, and expected to hit the £5 billion mark by the end of 2015. In the USA alternative lenders lent approximately $3 billion in 2013, double the amount from 2012.
In the latest BI Intelligence report, the US has one of the largest P2P (peer-to-peer) lending markets in the world by loan volume, but the UK's is 72% larger on a per capita basis. P2P lenders in the US generated $6.6 billion in loans last year, up 128%.
Europe on the other hand is considered to be the next big market for P2P lending. The alternative finance market in Europe is said to have reached nearly €3 billion ($3.9 billion) in 2014, a jump of 144%, and small-business P2P loan volume in France grew almost 4,000% last year, to reach €8.2 million ($10.6 million).
That provides us with the sort of picture of what is potentially available to entrepreneurs seeking funding to start a new business or grow and expand an existing one.
In this post I am going to highlight two of the six considerations which are great pointers in the process of accessing and securing funding for the business owner.
Do I know what I specifically need? – It is obvious you are on the hunt for investors or funds, only because you have a need for it. However, increasingly I find that a lot of entrepreneurs seem to think any figure, which is often base on a guess work, can be thrown in the mix when asked how much they need. I, however, think that, if you are really serious about this, you must always put yourself in the investor’s shoes and ask yourself, if anyone comes to me to quote any figures or cash amount, without knowing exactly what it is for and how they came by them, would I even consider it? Your answer is as good as mine.
Prospecting for investor support is a serious business and most of them do not have the time to help you come up with what you specifically need, it is up to you to spend quality time and effort to establish that before stepping out to seek their help.
That includes both financial and non-financial support.
Do I have a proposal? – You can’t get funding from any serious investor without a proposal. Period! This may seem surprising to some, but I find that quite common. Many entrepreneurs seem to think they can easily talk their way smoothly into winning over investors to support them without presenting a proposal for consideration. Am afraid, that does not work in the ‘real world’. I am yet to come across any serious investor who does not require a written proposal before giving attention to a request.
As part of the proposal you must have an Executive Summary on hand for the initial consideration of investors. Often, it is the first thing they ask for to help them gain an overview of your business and what you are asking for. Advisedly, this should be just about a page summary of the whole business plan/proposal, and not more than two pages. Equally important is a business owner’s understanding or grasp of the figures, at least the basics, such as, unit production cost, gross margins, gross profits, cost of sales, overheads, net profits, capital requirements, cash flow, both actuals and projections.
No matter about much of a phobia you have for figures and calculations, you must learn to understand the basics of these financials, even if you have an accountant who does all the accounts for you.
In Part II we will take look at 4 more of the six considerations in the process of accessing and securing the funding you need to start your business or grow and expand your existing business.
Don’t hesitate to contact me if you need help to secure funding or investor support for your business. My network of investors are ever ready to consider your proposal and invest in you and your business.
For in depth information on weighing all the available funding sources, understand what investors look for in their proposal consideration, preparing and delivering a winning pitch to win investor support please check out my book ‘PITCH YOUR BUSINESS LIKE A PRO’, available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.
Victor Kwegyir is a business coach, mentor, consultant and speaker with over 25 years experience in business. Victor offers professional business advice to help start-ups & existing businesses to start and/or grow successful businesses. He is also the author of three successful books, including his latest - “Pitch Your Business Like a Pro”, “The Business You Can Start” and the co-authored book above, “You’ve Been Fired! Now What?” Available on Amazon, BarnesandNobles.com and bookstores worldwide on order. You can order the eBook versions on any Ebook platform, including, Smashwords, iBookstore, iTunes, Kindle, Nooks, Sony Reader, Kobo, and Diesel.
How far competition can take you and your Business
Working with entrepreneurs and business owners, whether it is an aspiring, new or existing one, is always exciting. Part of the perks is getting to understand their concerns, expectations, and aspirations, as you walk this all important journey of faith/risk taking with them. In the process you develop long-term professional relationships that goes way beyond the service offer period.
It also becomes an opportunity to share with them valuable insights as an experienced business expert, coaching and mentoring them along the way, while helping them better appreciate the demands of the process, as you guide to navigate the journey more strategically.
One of the most common challenges of entrepreneurs is their reluctance to acknowledge or appreciate the existence or role of competition in the market place. Often it is either completely dismissed or underestimated. However, although many entrepreneurs would like to shy away from the reality of some form of competition, it is absolutely necessary for business success.
The fact is that in business there is always competition for the available customer or client base. Ignoring it won’t do you any favors. Because, even if there is no direct competition there will definitely be indirect competition.
The threat of a substitute product, for instance, competes indirectly with your product, business or service, and is often overlooked by new business owners. And at the core of all competition is the competition for the customer’s cash.
This also suggests that at each point in time there is competition going on for the limited cash in the potential customer’s pocket. The question is, what is it about your products or services that will convince the customer to choose to spend their cash on your business instead of somewhere else?
The good news is that there are a significant number of ways a business can compete in the market place, including:
Quality and differentiation of your product;
Quality and differentiation of your service;
The value of what you are offering to your customer base;
Please refer to my book – “ Beyond The Passion” for the full list and details.
In business, healthy competition always encourages and inspires change for the better which will distinguish your business from what already exists. Without it there is no incentive for businesses to seek to become better or more efficient. Promoting competition is generally seen as one of the best ways to promote and sustain consumer satisfaction.
Some of the benefits of competition to a business and business owners that can make a significant impact on the bottom-line include:
It forces you to educate yourself about the business and industry, not to talk of yourself.
It helps you to avoid becoming complacent and to maintain a sense of balance as you consistently seek to innovate and become better which will inspire your team to push themselves to become better in driving the business forward.
It offers you and your team the incentive to work harder to become more efficient and productive thus helping you to drive costs down which eventually means lower prices for your goods and services - something your clients and customer will very much appreciate.
It promotes initiatives and the freedom to try things outside the box which inspires confidence and general well-being of the team and the business.
It forces you to focus on your core audience enabling you to provide target offerings to your customers.
Knowing the competition and understanding how the market forces interact is an essential element in attracting the right kind of business, increase your market share and bottom-line, to grow a successful business.
For more insights into the pros and cons of COMPETITION IN BUSINESS please check our my book – “Beyond The Passion”, available in both Paperback and eBook on Amazon, Barnes and Nobles, Kindle, all book seller platforms worldwide.
Do not hesitate to share practical examples on how your understanding and appreciation of Competition and how it has helped you and your business grow or otherwise. We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with me directly why not download my App and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
It also becomes an opportunity to share with them valuable insights as an experienced business expert, coaching and mentoring them along the way, while helping them better appreciate the demands of the process, as you guide to navigate the journey more strategically.
One of the most common challenges of entrepreneurs is their reluctance to acknowledge or appreciate the existence or role of competition in the market place. Often it is either completely dismissed or underestimated. However, although many entrepreneurs would like to shy away from the reality of some form of competition, it is absolutely necessary for business success.
The fact is that in business there is always competition for the available customer or client base. Ignoring it won’t do you any favors. Because, even if there is no direct competition there will definitely be indirect competition.
The threat of a substitute product, for instance, competes indirectly with your product, business or service, and is often overlooked by new business owners. And at the core of all competition is the competition for the customer’s cash.
This also suggests that at each point in time there is competition going on for the limited cash in the potential customer’s pocket. The question is, what is it about your products or services that will convince the customer to choose to spend their cash on your business instead of somewhere else?
The good news is that there are a significant number of ways a business can compete in the market place, including:
Quality and differentiation of your product;
Quality and differentiation of your service;
The value of what you are offering to your customer base;
Please refer to my book – “ Beyond The Passion” for the full list and details.
In business, healthy competition always encourages and inspires change for the better which will distinguish your business from what already exists. Without it there is no incentive for businesses to seek to become better or more efficient. Promoting competition is generally seen as one of the best ways to promote and sustain consumer satisfaction.
Some of the benefits of competition to a business and business owners that can make a significant impact on the bottom-line include:
It forces you to educate yourself about the business and industry, not to talk of yourself.
It helps you to avoid becoming complacent and to maintain a sense of balance as you consistently seek to innovate and become better which will inspire your team to push themselves to become better in driving the business forward.
It offers you and your team the incentive to work harder to become more efficient and productive thus helping you to drive costs down which eventually means lower prices for your goods and services - something your clients and customer will very much appreciate.
It promotes initiatives and the freedom to try things outside the box which inspires confidence and general well-being of the team and the business.
It forces you to focus on your core audience enabling you to provide target offerings to your customers.
Knowing the competition and understanding how the market forces interact is an essential element in attracting the right kind of business, increase your market share and bottom-line, to grow a successful business.
For more insights into the pros and cons of COMPETITION IN BUSINESS please check our my book – “Beyond The Passion”, available in both Paperback and eBook on Amazon, Barnes and Nobles, Kindle, all book seller platforms worldwide.
Do not hesitate to share practical examples on how your understanding and appreciation of Competition and how it has helped you and your business grow or otherwise. We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with me directly why not download my App and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
VALUE PERSPECTIVE - Missing success factor that can make all the difference - Part II
In Part I we established what value is and how a business benefits from making decisions based on value perspective. In this post we want to look at how a business can deliver value as a competitive advantage strategy, potentially winning more customer business and thus increasing its turnover over time.
The fact is that as a business, to compete only on price is not always the smartest strategy, especially in the long term because it can affect your margins significantly as you simply cannot continue to drive down prices below a certain point and still make the level of profit that will enable you to remain in business.
Thankfully it is almost always possible to find something that can be value-added to your products or services.
It is always better to build a business with the aim of delivering value because there is no end to what the business can do to improve on its delivery or offering. It is therefore important to focus on creating more value for your customers and clients. It is a better way to stay ahead by looking for ways of competing in the market place other than lowering price.
There is always something that is important to your clients and customers that you can offer other than cutting prices or offering them discounts. From simple things such as, how a product and/or service is packaged and presented to a customer, level of customer care, procedures for handling complaints, all of which add to or reduce the perceived value in the eyes of the customer. For instance it is not surprising to come across a business offering a $20 product as if it is a $200 product, and another one offering a $200 product as if it is a $10 product.
Here are a few more ways of adding value to your products and services:
Focusing a lot of attention in your marketing campaign on listing several benefits your product or service deliver to customers. This communicates greater value, as it makes them appreciate you’re solving several problems with your solution, making it worth the price they are paying.
Offering free and faster delivery can add significant value to your products in the eyes of the customer;
Making your business much more accessible and more convenient to customers. You can increase the convenience of purchasing and using your product or service or taking advantage of technology to position yourself to be easily accessible via available channels. Examples include home delivery, and having an App for your business where customer can access your products and services;
Bundling packages that add significant benefits to the products you are selling;
Offering different service package levels (such as gold, platinum, silver packages) for your customers based on frequency of doing business with you, amount of purchase, etc.;
Offering more valuable service, pricing, benefits and related items to customers based on the number of times they buy from you, such as, frequent flyer air miles offered by airlines;
Reward systems based on recognizing customers for being outstanding customers over a period, usage of products or services, purchase of certain levels of orders;
Assigning dedicated personnel to manage customers’ accounts personally and to provide support;
The fact is that with creativity, innovation and a desire to always stand out and be ahead of the competition, there are many things you can do to add value to your product and service delivery.
In summary, assessing the worth of your product or service on the basis of value proves to be much more wholesome than using the cost or price of the item. Not only that, it also offers more options to you in differentiating yourself from competitors and helps you to make better decisions when purchasing products and services for the business.
What other ways do you add value to your products and services? I would love to hear from you. Please don’t hesitate to share with your network.
For in depth discussion on “Value Perspective” please check out my book “BEYOND THE PASSION” available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.
We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with us directly why not download my App (on your Android or IOS device) and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
The fact is that as a business, to compete only on price is not always the smartest strategy, especially in the long term because it can affect your margins significantly as you simply cannot continue to drive down prices below a certain point and still make the level of profit that will enable you to remain in business.
Thankfully it is almost always possible to find something that can be value-added to your products or services.
It is always better to build a business with the aim of delivering value because there is no end to what the business can do to improve on its delivery or offering. It is therefore important to focus on creating more value for your customers and clients. It is a better way to stay ahead by looking for ways of competing in the market place other than lowering price.
There is always something that is important to your clients and customers that you can offer other than cutting prices or offering them discounts. From simple things such as, how a product and/or service is packaged and presented to a customer, level of customer care, procedures for handling complaints, all of which add to or reduce the perceived value in the eyes of the customer. For instance it is not surprising to come across a business offering a $20 product as if it is a $200 product, and another one offering a $200 product as if it is a $10 product.
Here are a few more ways of adding value to your products and services:
Focusing a lot of attention in your marketing campaign on listing several benefits your product or service deliver to customers. This communicates greater value, as it makes them appreciate you’re solving several problems with your solution, making it worth the price they are paying.
Offering free and faster delivery can add significant value to your products in the eyes of the customer;
Making your business much more accessible and more convenient to customers. You can increase the convenience of purchasing and using your product or service or taking advantage of technology to position yourself to be easily accessible via available channels. Examples include home delivery, and having an App for your business where customer can access your products and services;
Bundling packages that add significant benefits to the products you are selling;
Offering different service package levels (such as gold, platinum, silver packages) for your customers based on frequency of doing business with you, amount of purchase, etc.;
Offering more valuable service, pricing, benefits and related items to customers based on the number of times they buy from you, such as, frequent flyer air miles offered by airlines;
Reward systems based on recognizing customers for being outstanding customers over a period, usage of products or services, purchase of certain levels of orders;
Assigning dedicated personnel to manage customers’ accounts personally and to provide support;
The fact is that with creativity, innovation and a desire to always stand out and be ahead of the competition, there are many things you can do to add value to your product and service delivery.
In summary, assessing the worth of your product or service on the basis of value proves to be much more wholesome than using the cost or price of the item. Not only that, it also offers more options to you in differentiating yourself from competitors and helps you to make better decisions when purchasing products and services for the business.
What other ways do you add value to your products and services? I would love to hear from you. Please don’t hesitate to share with your network.
For in depth discussion on “Value Perspective” please check out my book “BEYOND THE PASSION” available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.
We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with us directly why not download my App (on your Android or IOS device) and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
VALUE - One of your biggest success factors in business! Here is how it works. Part I
The word ‘value’ plays a major role in our decision-making process on a day to day basis without even realizing it at times. The question is, what is value? The Oxford Advanced Learner’s Dictionary defines value as a noun to simply mean “how much something is worth” or “the regard that something is held to deserve; the importance, worth, or usefulness of something.” In other words, it is a person’s opinion of a product’s value to them, with little or nothing to do with the price per se but how the product satisfies their need or meet their expectation. That also implies that Value in itself means nothing except associated with something.
In business, however, there is a trap I commonly find entrepreneurs fall into. It is assessing things based only on price or cost. This is something I consider limiting for any business owner seeking to become successful and remain in business for the long term. From the pricing of products or services to hiring employees to compete in business, value or perceived value has proven to be one of the best ways to measure the true worth of anything.
The difference between price and value is that price is the amount of money a customer pays for a product and/or a service. Value on the other hand, is the customer’s perceived benefits of that product and/or service. It is often about the emotional connection he/she has with the product and/or service, the employee they are dealing with, or the company’s brand value associated with it, in relation to the price.
The truth is that what you sell, as a business, must be good value if it is going to be the customers’ preferred choice over what exists in the market, because, most times, customers may not be fully aware of the true cost of production of the items they buy. They are therefore often willing to pay a price based on their perception of how much the product is worth to them and it is up to you to employ marketing strategies that create the right perceived value of the product to sell to them.
Having said that, there are a number of significant benefits that a business gains by considering the value perspective in its decision making and strategy. These include:
Value can help you to prioritize, by assigning different values to different activities. Assigning value to each task enables you to better assess what to take on board, what to delegate and even the order in which each task is to be dealt with as a business.
Value helps you to assess the true worth of a product line or service to the business and whether it is time to discontinue it or not. Because, even though the particular product line or service may be making a loss, it may be attracting other benefits such as driving in much needed traffic to the business.
Value is also a better measure of ROI than cost: profit ratios or margins. Measuring success by how much profit you make can be misleading, as it may lead to you losing sight of all the other non-quantifiable financial benefits of the business such as, customer perception of your products and services as well as the business as a whole. This often has a greater impact on long term business performance and survival than immediate financial gains.
Value also gives you more options to carve out a niche for yourself, thus offering you a better set of tools to employ in distinguishing yourself from the competition and making you more appealing to your target market.
Value ultimately can win you more business, much faster and more economically than most marketing strategies. Because thankfully, it is almost always possible to find something that can be value-added to your products or services to win over the customer. Customers, like any other human, are considered to be predominantly emotional. Extending warmth, cheerfulness, friendliness, helpfulness and simply going the extra mile in terms of convenience, go a long way to win them over. Any business can differentiate itself by it, counting on it as a strong competitive advantage to stay ahead in a fast changing marketplace.
As we can see there are a lot of benefits a business gains by weighing options and making decisions from the value perspective. In part II we would be looking at how a business can deliver value as a competitive advantage strategy, potentially winning more customer business and thus increasing its share of the market as well as turnover.
If you have any examples on how this has worked for you or not, we would be glad to hear it. Please don’t hesitate to share with your network.
For in depth discussion on “Value Perspective” please check out my book “BEYOND THE PASSION” available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with me directly why not download my App (on your Android or IOS device) and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
In business, however, there is a trap I commonly find entrepreneurs fall into. It is assessing things based only on price or cost. This is something I consider limiting for any business owner seeking to become successful and remain in business for the long term. From the pricing of products or services to hiring employees to compete in business, value or perceived value has proven to be one of the best ways to measure the true worth of anything.
The difference between price and value is that price is the amount of money a customer pays for a product and/or a service. Value on the other hand, is the customer’s perceived benefits of that product and/or service. It is often about the emotional connection he/she has with the product and/or service, the employee they are dealing with, or the company’s brand value associated with it, in relation to the price.
The truth is that what you sell, as a business, must be good value if it is going to be the customers’ preferred choice over what exists in the market, because, most times, customers may not be fully aware of the true cost of production of the items they buy. They are therefore often willing to pay a price based on their perception of how much the product is worth to them and it is up to you to employ marketing strategies that create the right perceived value of the product to sell to them.
Having said that, there are a number of significant benefits that a business gains by considering the value perspective in its decision making and strategy. These include:
Value can help you to prioritize, by assigning different values to different activities. Assigning value to each task enables you to better assess what to take on board, what to delegate and even the order in which each task is to be dealt with as a business.
Value helps you to assess the true worth of a product line or service to the business and whether it is time to discontinue it or not. Because, even though the particular product line or service may be making a loss, it may be attracting other benefits such as driving in much needed traffic to the business.
Value is also a better measure of ROI than cost: profit ratios or margins. Measuring success by how much profit you make can be misleading, as it may lead to you losing sight of all the other non-quantifiable financial benefits of the business such as, customer perception of your products and services as well as the business as a whole. This often has a greater impact on long term business performance and survival than immediate financial gains.
Value also gives you more options to carve out a niche for yourself, thus offering you a better set of tools to employ in distinguishing yourself from the competition and making you more appealing to your target market.
Value ultimately can win you more business, much faster and more economically than most marketing strategies. Because thankfully, it is almost always possible to find something that can be value-added to your products or services to win over the customer. Customers, like any other human, are considered to be predominantly emotional. Extending warmth, cheerfulness, friendliness, helpfulness and simply going the extra mile in terms of convenience, go a long way to win them over. Any business can differentiate itself by it, counting on it as a strong competitive advantage to stay ahead in a fast changing marketplace.
As we can see there are a lot of benefits a business gains by weighing options and making decisions from the value perspective. In part II we would be looking at how a business can deliver value as a competitive advantage strategy, potentially winning more customer business and thus increasing its share of the market as well as turnover.
If you have any examples on how this has worked for you or not, we would be glad to hear it. Please don’t hesitate to share with your network.
For in depth discussion on “Value Perspective” please check out my book “BEYOND THE PASSION” available in both paperback and ebook formats on Amazon, Barnes and Nobles, iBookstore, Smashwords and bookstores worldwide.We appreciate your comments, suggestions and contributions at any time. Feel free to SHARE this post with your network anywhere in the world.
If you haven’t yet got your copy of any of our books, kindly check them out – “Pitch Your Business Like a Pro”, “The Business You Can Start” and “You’ve Been Fired! Now What?” (Ebook edition – Itunes, Kindle, Nooks, Kobo).
To connect with me directly why not download my App (on your Android or IOS device) and be the first to share in our ‘Business Building Blocks’ tips. You can also connect with us via Facebook, Twitter and LinkedIn and sign up to our monthly newsletter for inner circle business tips on our website www.victorkwegyir.com.
Why the choice of legal status is more than adding Ltd to business name
The old age question for most start-ups and new businesses on which legal structure to choose, is one that must be carefully thought through by every business owner. Although there are general similarities from nation to nation, most economies have their own take on how each works. It is therefore very important to make an informed decision on the right legal structure of the business you want to set up. There are a number of legal structures, all of which differ in several aspects. There are also pros and cons for each status choice. For the full take on this subject please check out chapter 6 of the book “The Business You Can Start”.
Some of the legal structures that are usually adopted include sole trader, partnership, limited liability partnership (LLP), limited liability company (LLC), franchise, and social enterprise. In the US among the common types for consideration to choose from are a C Corporation, S Corporation or LLC status.
However, your choice of legal structure will, among other things, affect other very important aspect of the business, including:
1. Your tax liability and amount of National Insurance or Social security payment you will be liable for. For instance, in the UK, a sole trader’s profits are taxed as income, and also usually pay 2 types of National Insurance:
Class 2 if your profits are £5,965 or more a year,
Class 4 if your profits are £8,060 or more a year
Whereas a Limited Liability company normally have to operate PAYE as part of your payroll. It is the system by which HMRC collect Income Tax and National Insurance from employment. And on your business, The Corporation Tax rate for your company's profits is 20%.
2. The level of risk and control you will have. For instance, an LLC is controlled by the shareholders who appoints the board of directors. Whereas as a sole trader you have absolute control on your business and responsible for any risk you take. In the case of partnerships, each partner share the risks, costs, and responsibilities of being in business.
3. The records and accounts you will need to keep. As a sole trader for example, a basic bookkeeping system can be used to maintain all your records, and only required to prepare a profit and loss account and a balance sheet at the end of the trading year. In partnership each individual partner must make annual self-assessment returns to HM Revenue & Customs. Partnerships have to also keep more detailed financial records such as sales and purchase records, cash books, creditor and debtor details, profit and loss sheets, and balance sheets. An LLC on the other hand, must prepare company’s annual accounts - called ‘statutory accounts’ (balance sheet, profit and loss account, notes about the accounts, a director’s report and an audited accounts depending on the size of your business) from the company’s financial records at the end of the company’s financial year.
4. Your financial liability in the event of insolvency. In the case of partnerships for instance, partners are jointly liable for debts owed, and each partner is also personally liable for the whole of the partnership debts. With LLCs on the other hand, shareholders’ responsibility for the company’s financial liabilities in the event of insolvency are limited to the value of shares that they own but haven’t paid for. Company directors aren’t personally responsible for debts the business can’t pay if it goes wrong, as long as they haven’t broken the law. However, as a sole trader your home or personal assets could be used or sold in paying the debts incurred by your business.
5. The transferability of the business. It is very easy to transfer your interest to another person either by selling or by inheritance as a sole trader, for instance. It is also much easier to transfer ownership of a Limited Liability Company, usually by means of transferring ownership of shares held.
6. The way management decisions are made in respect of the business. A director or board of directors makes the management decisions in a Limited Liability Company. A sole trader on the other hand makes all the decisions in managing the business without the need to consult anyone for their approval. In a partnership, partners usually have to consult with one another before a final decision is made.
7. The ways you can raise money for the business. Partners usually contribute to raise the capital either in cash, own assets or take loans. Sole traders can raise capital from their own assets, friends, bank loans, etc. Public limited companies can raise money by selling shares on the stock market, but private limited companies cannot. LLCs are therefore usually financed by shareholders’ contributions, loans, and retained profits.
The above are some of the essential considerations you need to factor in, when deciding of the right legal structure to adopt for your business.
It is also equally important to weigh the advantages and disadvantages of each option as you decide on the best option. From the above it is also very clear the impact of the legal status of a business has far more reaching consequences than just adopting or using an Ltd. at the end of your business name or not. For more detailed analysis and the advantages and disadvantages of the various legal status options, please check out the chapter 6 of the book “The Business You Can Start”.
Victor Kwegyir is a business coach, consultant, author and speaker with over 18 years experience in business.
Victor offers professional business advice to help start-ups & existing businesses to start and/or grow successful businesses.
He is also the author of three successful five (5) ***** star review rated books, including his latest -“Pitch Your Business Like a Pro”, “The Business You Can Start” and the co-authored book above, “You’ve Been Fired! Now What?” Available on Amazon, BarnesandNobles.com and bookstores worldwide on order. You can order the eBook versions on any Ebook platform, including, Smashwords, iBookstore, iTunes, Kindle, Nooks, Sony Reader, Kobo, and Diesel.
Some of the legal structures that are usually adopted include sole trader, partnership, limited liability partnership (LLP), limited liability company (LLC), franchise, and social enterprise. In the US among the common types for consideration to choose from are a C Corporation, S Corporation or LLC status.
However, your choice of legal structure will, among other things, affect other very important aspect of the business, including:
1. Your tax liability and amount of National Insurance or Social security payment you will be liable for. For instance, in the UK, a sole trader’s profits are taxed as income, and also usually pay 2 types of National Insurance:
Class 2 if your profits are £5,965 or more a year,
Class 4 if your profits are £8,060 or more a year
Whereas a Limited Liability company normally have to operate PAYE as part of your payroll. It is the system by which HMRC collect Income Tax and National Insurance from employment. And on your business, The Corporation Tax rate for your company's profits is 20%.
2. The level of risk and control you will have. For instance, an LLC is controlled by the shareholders who appoints the board of directors. Whereas as a sole trader you have absolute control on your business and responsible for any risk you take. In the case of partnerships, each partner share the risks, costs, and responsibilities of being in business.
3. The records and accounts you will need to keep. As a sole trader for example, a basic bookkeeping system can be used to maintain all your records, and only required to prepare a profit and loss account and a balance sheet at the end of the trading year. In partnership each individual partner must make annual self-assessment returns to HM Revenue & Customs. Partnerships have to also keep more detailed financial records such as sales and purchase records, cash books, creditor and debtor details, profit and loss sheets, and balance sheets. An LLC on the other hand, must prepare company’s annual accounts - called ‘statutory accounts’ (balance sheet, profit and loss account, notes about the accounts, a director’s report and an audited accounts depending on the size of your business) from the company’s financial records at the end of the company’s financial year.
4. Your financial liability in the event of insolvency. In the case of partnerships for instance, partners are jointly liable for debts owed, and each partner is also personally liable for the whole of the partnership debts. With LLCs on the other hand, shareholders’ responsibility for the company’s financial liabilities in the event of insolvency are limited to the value of shares that they own but haven’t paid for. Company directors aren’t personally responsible for debts the business can’t pay if it goes wrong, as long as they haven’t broken the law. However, as a sole trader your home or personal assets could be used or sold in paying the debts incurred by your business.
5. The transferability of the business. It is very easy to transfer your interest to another person either by selling or by inheritance as a sole trader, for instance. It is also much easier to transfer ownership of a Limited Liability Company, usually by means of transferring ownership of shares held.
6. The way management decisions are made in respect of the business. A director or board of directors makes the management decisions in a Limited Liability Company. A sole trader on the other hand makes all the decisions in managing the business without the need to consult anyone for their approval. In a partnership, partners usually have to consult with one another before a final decision is made.
7. The ways you can raise money for the business. Partners usually contribute to raise the capital either in cash, own assets or take loans. Sole traders can raise capital from their own assets, friends, bank loans, etc. Public limited companies can raise money by selling shares on the stock market, but private limited companies cannot. LLCs are therefore usually financed by shareholders’ contributions, loans, and retained profits.
The above are some of the essential considerations you need to factor in, when deciding of the right legal structure to adopt for your business.
It is also equally important to weigh the advantages and disadvantages of each option as you decide on the best option. From the above it is also very clear the impact of the legal status of a business has far more reaching consequences than just adopting or using an Ltd. at the end of your business name or not. For more detailed analysis and the advantages and disadvantages of the various legal status options, please check out the chapter 6 of the book “The Business You Can Start”.
Victor Kwegyir is a business coach, consultant, author and speaker with over 18 years experience in business.
Victor offers professional business advice to help start-ups & existing businesses to start and/or grow successful businesses.
He is also the author of three successful five (5) ***** star review rated books, including his latest -“Pitch Your Business Like a Pro”, “The Business You Can Start” and the co-authored book above, “You’ve Been Fired! Now What?” Available on Amazon, BarnesandNobles.com and bookstores worldwide on order. You can order the eBook versions on any Ebook platform, including, Smashwords, iBookstore, iTunes, Kindle, Nooks, Sony Reader, Kobo, and Diesel.
