Messages In This Digest (6 Messages)
- 1.
- Why Smart Brains Make Stupid Decisions On Money, Work and Health From: articleannounce
- 2.
- How to Deduct Your Travel Expenses From: articleannounce
- 3.
- Is there a Future in Working at Home When You Have Children? From: articleannounce
- 4.
- Internet Marketing - The New Kid on the Block From: articleannounce
- 5.
- Top 2 Simple, Effective Methods To Build Quality Backlinks From: Ying Hong
- 6.
- 5 Top Tips For Raising Investment In Your Company From: articleannounce
Messages
- 1.
-
Why Smart Brains Make Stupid Decisions On Money, Work and Health
Posted by: "articleannounce" articles@submityourarticle.com articleannounce
Sat Jun 21, 2008 2:24 pm (PDT)
You have permission to publish this article electronically
or in print, free of charge, as long as the bylines are
included. A courtesy copy of your publication would be
appreciated - send to alvaro@sharpbrains.com .
Title: Why Smart Brains Make Stupid Decisions On Money, Work and Health
Word Count: 951
Author: Alvaro Fernandez
Email: alvaro@sharpbrains.com
Category: Business - General
Article URL: http://www.submityourarticle. com/articles/ easypublish. php?art_id= 34991
The article is preformatted to 60CPL.
Why Smart Brains Make Stupid Decisions On Money, Work and Health
It happens. Often.
Why?
We just secured an interview with Ori Brafman, co-author of
Sway: The Irresistible Pull of Irrational Behavior
(Doubleday Business, 2008), to discuss our Dark Side (well,
he calls if "different hidden forces" and "psychological
undercurrents").
While reading some reviews about his book, I particularly
enjoyed finding, after the usual impressive long collection
of endorsements, this "disclaimer":
*DISCLAIMER: If you decide to buy this book because of
these endorsements, you just got swayed. One of the
psychological forces you'll read about in Sway is our
tendency to place a higher value on opinions from people in
positions of prominence, power, or authority. (But you
should still buy the book.)
Alvaro Fernandez (AF): Ori, what is SWAY? can you give us a
couple quick examples?
Ori Brafman (OB): Sway is about why perfectly rational
people make irrational choices. We interviewed business
executives, airline pilots, doctors, and even a Supreme
Court Justice to uncover the psychological forces that
affect our decision-making. What was especially interesting
was to find out that we all get swayed, and that these
psychological forces are much more ubiquitous than we
thought.
Take, for instance, the story of Jacob Van Zanten who was
the head of safety for KLM. One foggy afternoon, Van Zanten
took off without getting tower clearance, causing the
biggest airline accident in history. Why would this man,
who's the head of safety make such an irrational choice?
Or look at the story of Harvard Business School students
who paid $204 for a twenty-dollar bill.
AF: Happy to have attended Stanford... Now, how did that
happen?
OB: The professor set up an auction for a $20 bill. But
there was a twist. The winner would get the $20 bill. But
the second place bidder, would still have to honor his bid,
but would get nothing. At first there are lots of bidders,
but then as the bidding approaches $20 people start pulling
out. Inevitably, though two people stay in. As the bidding
continued to rise, the second-place person became
determined to not be the sucker who pays good money for
nothing in return. The amazing thing is that time after
time the auction continues well past the $20 point. People
are just so determined not to lose, that they keep on
bidding up.
AF: Why do people get Swayed?
OB: Without realizing it, we get swept up by a host of
different hidden forces. I think of it like being in a boat
in the middle of the ocean. It may look like we're standing
still, but underneath the surface, undercurrents move us
without us realizing it. The same thing happens with
psychological undercurrents. In Sway, we look at some of
the major undercurrents and explore how they intersect
triggering so many different irrational behaviors. The
thing is that we're prone to psychological sways all of the
time--whether we're conducting a job interview, going out
on a first date, or deciding whether to sell a stock.
AF: Let's be practical for a minute... what can people do
to Sway other people?
OB: We're constantly engaged in a hidden dance of sorts
where we sway people around us and are swayed by others.
One of the most unusual studies we encountered has to do
with what we call the chameleon effect. In the study, a
group of men and women--who had never met each other--were
told to have a short phone conversation. Now, before the
conversation, each man was shown a picture of the woman
he'd be talking to. Unbeknownst to the men, the pictures
were fake. And half the men were shown a picture of a
beautiful woman, while the other half were shown a picture
of a less attractive woman. The pictures had nothing to do
with how the real women looked like, and the real women had
no idea that there were any pictures shown. The kicker is
that the women who the men thought were pretty ended up
sounding beautiful on the phone. And the women who the men
thought were less attractive ended up sounding less
beautiful. We take on the roles others ascribe to us. Think
about that with employees or even with your kids. If we
think someone is smart, there's a good chance they'll live
up to that role.
AF: And what can people do to prevent being Swayed?
OB: The biggest step is to recognize how often we get
swayed. We have a tendency to think that our decisions are
rational, when in fact, different sways may have informed
the decision. Once we realize that we're prone to get
swayed, the second step is figuring out specific strategies
to counter the sway. It ranges from taking a long-term
perspective to using empirical models for job interviews.
AF: For example?
OB: We have a propensity to "diagnose" a job candidate from
the first moment we meet him or her. We assign a diagnosis,
and are unable to see things in a different light despite
objective evidence to the contrary. It's for this reason
that job interviews are terrible predictors of actual
performance. A much more effective approach is to conduct
very structured interviews that don't allow managers to get
swayed. In these interviews, the questions are pre-scripted
and focus on experience and ability rather than vague
things like "what's your biggest strength?" We call these
the Joe Friday interview (just the facts...) These
interviews may seem less personal, but they're actually
much more effective for actually selecting a good candidate.
AF: Ori, thank you very much for your time.
OB: My pleasure!
About the Author:
Alvaro Fernandez is the CEO and Co-Founder of
SharpBrains.com, which reviews resources to test your brain
and improve cognitive ability. SharpBrains has been
recognized by Scientific American Mind, Newsweek, Forbes.
Alvaro holds MA in Education and MBA from Stanford
University, and teaches The Science of Brain Health at
UC-Berkeley Lifelong Learning Institute. You can learn more
at http://www.sharpbrains.com/
----------
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SubmitYOURArticle.com is a trading name of Takanomi Limited.
Takanomi Limited is a limited company registered in England and Wales.
Registered number: 5629683. Registered office: 31 St Saviourgate, York YO1 8NQ.
Full contact details are at http://takanomi.com
----------
- 2.
-
How to Deduct Your Travel Expenses
Posted by: "articleannounce" articles@submityourarticle.com articleannounce
Sun Jun 22, 2008 12:54 am (PDT)
You have permission to publish this article electronically
or in print, free of charge, as long as the bylines are
included. A courtesy copy of your publication would be
appreciated - send to CS@provisionwealth.com .
Title: How to Deduct Your Travel Expenses
Word Count: 951
Author: Tom Wheelwright
Email: CS@provisionwealth.com
Category: Business - General
Article URL: http://www.submityourarticle. com/articles/ easypublish. php?art_id= 34889
The article is preformatted to 60CPL.
How to Deduct Your Travel Expenses
Travel expenses are a favorite deduction of many clients,
because they love to travel and especially enjoy it when
the IRS is subsidizing part of the expense. In order to
deduct travel expenses, however, you must show that the
expense has a business purpose and is ordinary and
necessary to the business.
Travel expenses that have a business purpose include:
- Meeting customers/prospects/vendors residing in a
different location;
- Searching for investment property;
- Meeting with business partners, both current and
prospective; and
- Holding annual shareholder meetings (usually held in
conjunction with an annual board meeting).
The phrase "ordinary and necessary" generally is defined to
mean, "in the ordinary course of business" and that "the
expense will contribute to the success of the business."
If a taxpayer travels to a destination and while at such
destination engages in both business and personal
activities, traveling expenses to and from the destination
are deductible only if the trip is related primarily to the
taxpayer's trade or business.
If the trip is primarily personal in nature, the traveling
expenses to and from the destination are not deductible
even though the taxpayer engages in business activities
while at such destination. Expenses while at the
destination which are directly related to the taxpayer's
trade or business are deductible even though the traveling
expenses to and from the destination are not deductible.
Whether a trip is related primarily to the business or is
personal depends on the facts and circumstances in each
case. The amount of time during the period of the trip
that is spent on personal activity compared to the amount
of time spent on business is an important factor in
determining the deductibility of the travel expense.
Generally, if business is conducted more than 50% of the
time in an eight-hour business day, the travel expense is
deductible.
Travel expenses incurred on behalf of a spouse, dependent
or other individual accompanying the taxpayer are not
deductible. However, if the spouse, dependent or other
individual is an employee of the taxpayer or there is a
bona fide business purpose, then the travel expense is
deductible.
Travel expenses involving a cruise ship typically are not
deductible. However, they can be deductible if you are
attending a convention on a cruise ship and you can show
that attendance benefits your trade or business. No
deductions for cruise ship expenses are allowed for
meetings related to personal investments, political causes
or other purposes.
There are additional restrictions relating to cruise ship
travel. For example, there is a $2,000 annual limit on
cruise conventions and you must attach a written statement
to your tax return that includes certain facts about the
convention.
Normally, expenses require simple documentation such as a
receipt. However, travel expenses require additional
documentation. If the IRS finds the taxpayer does not have
sufficient documentation, the expense will not be
deductible. The taxpayer must document the amount, time,
place and business purpose of the travel expense.
Sufficient documentation of a business expense includes
receipts, cancelled checks or bills. Although a
contemporaneous log is not required, we normally recommend
that our clients keep an itinerary of the business trip
listing all business activities as documentation of the
travel expense. The log should list all elements of the
expense (e.g., amount, time, place and purpose) as this has
high credibility with the IRS. Documentary evidence, such
as receipts or paid bills, is not generally required for
expenses that are less than $75. However, the IRS has
ruled that all lodging expenses must be documented.
The taxpayer may deduct a standard allowance as set by the
federal government. This is called a per diem deduction.
In lieu of receipts, taxpayer will deduct the per diem
rates. Per Diem travel expense deductions are not allowed
for owners.
Good news for those who hate keeping track of all of those
pesky receipts when they travel. The IRS will allow you to
deduct your meals and incidental expenses for travel away
from home even without receipts. This is their Per Diem
Allowance program.
The way it works is that the IRS has a table indicating the
amount of deduction you can take on a daily basis for meals
and incidentals while traveling away from home. If you
choose to use this flat, per diem amount, you do not have
to keep track of the receipts for these expenses. If you
are not an owner in the business, you can even use the per
diem method for travel and lodging. Owners can only use
the per diem method for meals and incidentals.
Of course, per diem allowances, like deductions for actual
expenses, may be used only if the time, place and business
purpose of the travel are substantiated by adequate records
or other evidence.
The IRS has issued per diem rates based upon the
Continental United States ("CONUS") travel and foreign
travel. New CONUS per diem rates become effective on
October 1 of each year, and remain in effect through
September 30 of the following year. Federal rates are on
the Internet at http://www.gsa.gov/.
If employee expenses are substantiated using a per diem
amount, and reimbursement exceeds the relevant federal
rates for that type of allowance, then the employee is
required to include the excess in gross income. The excess
portion must be reported on the employee's W-2 and is
subject to withholding. However, as long as the
reimbursement amount does not exceed the relevant federal
rates, then the amount is not taxable to the employee!
Other technical rules apply to using per diem rates. Be
sure to work with your CPA to make sure you are following
all of the technical rules before using the per diem method
for documenting travel expenses.
About the Author:
Tom Wheelwright is not only the founder and CEO of
Provision, but he is the creative force behind Provision
Wealth Strategists. In addition to his management
responsibilities, Tom likes to coach clients on wealth,
business, and tax strategies. Along with his frequent
seminars on these strategies, Tom is an adjunct professor
in the Masters of Tax program at Arizona State University.
For more information please visit
http://www.provisionwealth.com
----------
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SubmitYOURArticle.com is a trading name of Takanomi Limited.
Takanomi Limited is a limited company registered in England and Wales.
Registered number: 5629683. Registered office: 31 St Saviourgate, York YO1 8NQ.
Full contact details are at http://takanomi.com
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- 3.
-
Is there a Future in Working at Home When You Have Children?
Posted by: "articleannounce" articles@submityourarticle.com articleannounce
Sun Jun 22, 2008 4:54 am (PDT)
You have permission to publish this article electronically
or in print, free of charge, as long as the bylines are
included. A courtesy copy of your publication would be
appreciated - send to johnmitrou@yahoo.gr .
Title: Is there a Future in Working at Home When You Have Children?
Word Count: 526
Author: Ioannis Mitrou
Email: johnmitrou@yahoo.gr
Category: Business - General
Article URL: http://www.submityourarticle. com/articles/ easypublish. php?art_id= 31707
The article is preformatted to 60CPL.
Is there a Future in Working at Home When You Have Children?
Many people these days are either working at home or
contemplating leaving their jobs in order to do so.
Additionally, many stay-at-home moms are seeking at-home
work to earn extra income to help with household expenses,
or to provide for the family's future, either for
retirement or for their kids' education. If you are
thinking of seeking at-home work or even starting a home
business so you can spend more time with your kids, beware-
working at home can be a dicey proposition. However, by
planning ahead following some simple guidelines, it is
possible to do work from your home with children in the
house.
The first rule of working at home is, make a schedule and
stick to it. If your children are older, they will
understand that Mommy (or Daddy) needs them to be quiet
during certain scheduled hours. It is helpful to have
designated breaks when you can spend time with your kids.
If the kids are school-aged, plan to do your work while
they are in school. If they are younger, you may seek your
future employment with a company that allows home workers
to schedule evening hours, when your spouse can be at home
to watch them.
The second rule is, have a designated work area. It can be
a spare room, a corner of a bedroom or even the dining room
table. Just make sure your children know that when Mommy
(or Daddy) is in the "office", they are not to disturb you
unless there is an emergency. This is especially important
when your work-at-home job or business requires you to be
on the phone a lot. Having a noisy child in the background
is unprofessional, and can jeopardize your future
employment, or ruin relations with potential customers or
clients.
The third rule of work-at-home employment is, distract the
children. If they are quiet types who can entertain
themselves, you may want to give them their own "office"- a
small desk or table with toys, crayons and paper, or, if
the child is old enough, a second computer so that they can
"work" with Mommy or Daddy. You may even have older kids
help out with some of the simpler tasks. If this is not
feasible, try to arrange for older neighborhood children to
come over and play in an area away from your home office.
You may have to resort to hiring a sitter. If your finances
do not permit this, you can connect with other stay-at-home
or work-at-home parents and start a babysitting pool.
Keeping your children quiet and out of the way is vital to
your future as an at-home worker.
Working at home when you have children can be tricky, but
if you follow these guidelines, it can be done. If you are
planning to seek at-home work in the near future, make sure
you prepare in advance. A consistent schedule, a designated
work area, and activities to keep your kids busy while you
work will help to keep your family happy and allow your
work time to be more productive.
About the Author:
http://www.Trade4Net.com/blog/
http://www.Trade4net.com/wpblog/
http://www.ioannismitrou.blogspot. com
----------
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SubmitYOURArticle.com is a trading name of Takanomi Limited.
Takanomi Limited is a limited company registered in England and Wales.
Registered number: 5629683. Registered office: 31 St Saviourgate, York YO1 8NQ.
Full contact details are at http://takanomi.com
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- 4.
-
Internet Marketing - The New Kid on the Block
Posted by: "articleannounce" articles@submityourarticle.com articleannounce
Sun Jun 22, 2008 9:54 am (PDT)
You have permission to publish this article electronically
or in print, free of charge, as long as the bylines are
included. A courtesy copy of your publication would be
appreciated - send to cchas5eb03@yahoo.com .
Title: Internet Marketing - The New Kid on the Block
Word Count: 786
Author: Carla Chase
Email: cchas5eb03@yahoo.com
Category: Business - General
Article URL: http://www.submityourarticle. com/articles/ easypublish. php?art_id= 26743
The article is preformatted to 60CPL.
Internet Marketing - The New Kid on the Block
What is internet marketing all about? There are so many
companies in this industry, "Big Ticket to Wealth,"
"Wealthy Marketer," Powermall," and "Roadmap to Riches,"
just to name a few, that someone new to this field can
easily become overwhelmed. Surprisingly, many of the
campanies are new programs in the home business arena.
Nevertheless, they are competitive, bringing fresh ideas
and new tactics to the table that other internet marketing
companies have not been found to offer. For example, one
company states that it has incentives that makes the novice
or experienced internet marketer believe that he/she CAN be
successful working from home.Today let's explore some
internet marketing companies to determine if they have all
that they claim to offer its members.
After looking at what several companies had to offer to the
home business entrepreneur, there were minimal differences
that stood out to help make the companies unique. The main
similarities were that most companies online specialize in
software and an overabundance of ebooks that teach online
users how to market online and make money. Most companies
have everything from software to add audio to a site to
ebooks that revealed the secrets to effective marketing
online. Members obtain full resale rights of these
materials.
The primary difference is the large library of industry
specific videos that one company had to offer all members.
These videos, according to the CEO, can cost up to $1500
per minute. This company gives its members the opportunity
to resell these industry specific videos to website owners
at a fraction of the cost. It is revealed that these videos
can be sold to any type of business. For example, a real
estate agent to help in promoting the business online. Most
importantly each member can set their own price for the
videos; and keep 100% of the profits. This sounds great to
an inexperienced, newcomer, but, are these videos
glitch-free? Let's look at some realist issues that may be
encountered with these videos. What if your computer will
not play the videos properly or you are unfamiliar with the
process of downloading videos from the computer? How could
you benefit from this feature? So, newcomers should be
prepared to spend time and money to get these materials
ready for appropriate use.
All of the internet marketing companies researched provided
training and a support system to its members. There are
team trainings for all members, and resources that walks
the members through the steps to become successful online,
at ones own pace, be it fast or slow. Therefore, for
someone with no experience in internet marketing, it could
take weeks, months, or even years to start benefiting
financially from materials provided. One company did have
five opportunity calls per week and always invited
questions, comments, and concerns via any communication
modality (i.e., phone, email, or skype) 24/7.
Internet marketing companies seem to compensate there
members very well. There were four separate income streams
that some internet marketing company members had available
to them. Here are some highlights:
1) Members earn up to $900 for each of their personal
product pack sales
2) The company has matching override commissions. This
means that when a member sponsors and trains a new member,
both members benefit financially long term because the
sponsor receives a matching commission amount of up to $900
for every personal sale their members make. This is a
compensation plan that rewards team work.
3) Product sales from the library of industry specific
flash videos
4) Administration fees are paid to the members of up to $50
of the $75 monthly members ship fee.
The monthly membership fee entitles each member to the
additional flash videos and products the company adds to
the member library monthly. If a newcomer to internet
marketing is in a financial bind, it should be kept in ones
mind that there is a start up cost. Money profitted most
likely will not start rolling in the day, week, or even the
month that membership is started. After learning the
internet marketing techniques and applying them
consistently, however, this is a great possibility.
In conclusion, if an individual is motivated, trainable,
and works hard, this is definitely a career set up for a
newbie or a seasoned internet marketer to succeed. With the
ongoing trainings and support internet marketing companies
seems to be a perfect fit for anyone interested in
supplementing or replacing their income in an online home
based business. Most internet marketing companies offer
the right combination of products, commissions, teamwork,
and support for its members. On the other hand, the members
must bring certain prequalifications and materials to the
table, as well, if success is expected.
About the Author:
Carla Chase is a respected internet marketer and works with
other industryleading marketers. She personally devotes her
time, energy, and effort into making others and her team
successful online. To learn more go to:
http://www.csuccesswithchase. com
----------
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SubmitYOURArticle.com is a trading name of Takanomi Limited.
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Registered number: 5629683. Registered office: 31 St Saviourgate, York YO1 8NQ.
Full contact details are at http://takanomi.com
----------
- 5.
-
Top 2 Simple, Effective Methods To Build Quality Backlinks
Posted by: "Ying Hong" distribution@isnare.com articles_isnare
Sun Jun 22, 2008 10:14 am (PDT)
This is a free-reprint article written by:
Ying Hong
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Search engines rely heavily on quality backlinks to determine
how important a website is. Therefore, it is extremely important
for new website owners to realize that building backlinks holds
the key to building his web presence.
There are many methods to boost your backlinks, such as article
marketing, web directory submissions, forum posting, news
release, podcasting, webinars, to name a few. The most efficient
two methods that any new marketer should consider are the first
two mentioned: article marketing and web directory submissions.
Method 1. Article marketing
Article marketing is by far the most economical and effective
way to build backlinks. It is economical because it is free. It
is effective because (1) it bears a quality backlink every time
you submit one to an article directory and (2) this article may
be distributed to many more directories or sites of webmasters
who look for free content. In this sense, one article can result
in 10, 20, 50, 100, or more backlinks to your site; there is
really no cap to the number of links this one article may end up
building.
Any article you write in your niche will likely build you a
number of backlinks down the line. However, to make the most out
of this effort, there are a couple of things to bear in mind.
(1) Do your keyword research and make sure you include your
website url anchored with this keyword phrase in the resource
box. If you do a proper keyword research, you'll end up with a
phrase that is actually searched in the search engines. If you
further link your website to this keyword phrase, your chance of
getting seen is greatly increased. Intuitively, this is the path
for your website to be found.
(2) Try to change your articles by at least 30% when submitting
to different directories. The idea is to make your content as
unique as possible to the likings of the search engines. This
will maximize the benefit of the time you spend writing.
Intuitively, the most prominent places to change in an article
include the title, the first paragraph, the first sentence of
the paragraphs, the conclusion paragraph, and the resource box
text.
Article writing should be repeated over and over again
consistently. A reasonable goal to shoot for is to submit two
articles a week. It is the best if you can write the articles by
yourself. If not, for the sake of marketing your website
efficiently, you probably should consider getting them
ghost-written and submit them (or have them submitted) to as
many article directories as possible
Method 2. Web directory submissions
Although less superior than article writing in terms of
backlink building, submitting your website to web directories is
still a more powerful method than many and may generate highly
targeted traffic for your website. After all, both search
engines and people go to directories to find related
information. This can be a time consuming process but well worth
doing.
There are thousands of directories on the Internet; some are
free, and some are paid. A preferred approach for new Internet
marketers is probably to submit to all the free, non-reciprocal
web directories with the best possible page ranks. Here is just
such a list to guide your effort.
Vlib.org (PR9)
Dmoz.org (PR8)
Lii.org (PR8)
Worldhot.com (PR7)
Selfgrowth.com (PR7)
Femina.com (PR7)
Exactseek.com (PR6)
(Source: http://webdirectorylist.smashingdir ).com
Working down this list will bring a definitive difference to
your backlinks and web traffic.
To conclude, the backlink building strategy discussed here is
simple to follow and proven to work. Although it requires
considerable time commitment, it behooves the new Internet
marketers to take actions and practice these methods repeatedly.
Constant effort will surely bring about delightful result.
About The Author: Ying Hong reviews quality, SIMPLE work from
home opportunities. Learn more about simple, proven home
business opportunities at http://www.HomeBizOnlineThatWorks. com
Find more marketing tips and articles at My Home-Biz Journal by
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5 Top Tips For Raising Investment In Your Company
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Sun Jun 22, 2008 11:24 am (PDT)
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Title: 5 Top Tips For Raising Investment In Your Company
Word Count: 1489
Author: Andy Warren
Email: articles@marshallkeen.com
Category: Business - General
Article URL: http://www.submityourarticle. com/articles/ easypublish. php?art_id= 26833
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5 Top Tips For Raising Investment In Your Company
If you want to grow your company then one of the best
options is to raise more finance to support that growth.
However, raising finance doesn't come without risks. You
need to make sure you know what you're getting into and,
more importantly, how to get out.
The biggest challenge most business owners face is how to
even get started on raising finance. So here are 5 top tips
for raising investment in your company.
1. Have a great business plan
Although it's true that many investors don't even read the
whole business plan this doesn't mean you can ignore it. A
great business plan is an essential part of your business
and going through the process ensures that you think about
all the different elements of how your business is going to
work. It's no good having great expectations on sales if
you haven't thought through how you're going to market the
business to generate the leads to convert to sales. A
business plan gives you focus and allows you to cut away
those elements of the business that obviously don't make
sense.
An investor will be looking to the business plan to show
that you have considered, researched and planned your
business. You don't have to produce reams of paper but you
do need to show you've given serious consideration to all
the critical factors in your business and market. And make
sure you know what's in your plan.
The plan alone may not be enough to raise the money but
it'll be a whole lot harder without it.
2. Be realistic in your forecasts
There's nothing worse for an investor than scratching the
surface of a prospective investee's financial forecasts and
finding there's nothing but hot air, hyperbole and broad
assumption.
Every investor has seen plans that say something along the
lines of "if we can get just 1% of this £8bn market,
then we'll have revenues of £80m". And those plans
and forecasts have a tendency to go straight to that great
shredder in the sky. Be realistic and show that you have
some valid justification for how you're going to reach the
numbers you're forecasting.
If you have marketing spend (and you should) then show how
that translates into sales leads and how those get
converted into sales. Create financial models that underpin
the numbers. If you're expecting to convert 75% of all
prospects then you had better have a fantastic
justification for how and why. Most businesses simply don't
achieve this sort of conversion rate and you will lose
credibility very quickly with this type of assumption.
The reality of business is that even with realistic
forecasts, sales usually take much longer to be achieved
and costs are usually much higher than expected. An
experienced investor will look at your forecast and check
that they still work with half the sales and twice the
costs to check the risk in the business.
If you're going to build your forecasts yourself then
educate yourself in the best approaches and if you're going
to get others to help then make sure they have the right
knowledge and experience.
A solid forecast won't guarantee investment but a shaky one
will receive a definite "no".
3. Show the investor what return they can expect
The best investors only invest when they have a high
certainty of the outcome. Successful investing is about
knowing what return you expect to make. Anything else is
speculation and gambling. When an investor puts money into
a business they want to know what they're going to get and
when.
As part of your plan and forecast, you need to build in a
realistic and achievable exit strategy. This allows the
investor to get their money out, with a decent return on it.
Many investors, private equity firms and VCs will invest in
a portfolio of companies. They go in with the expectation
that each one will succeed but they know that overall some
will and some won't. The trick is to ensure that the gains
on the good ones more than outweigh the losses on the bad
ones. To do this they will often be looking for a return of
between 3 and 5 times their investment within 3 to 5 years.
Different investors have different criteria but this works
as a general rule of thumb.
The return on the investment for the investor is really
determined by 2 things. How much they put in and how much
they get out. That's why investors will push for more
equity for their investment, as it increases their
potential return on exit.
If you can show a decent return, in a reasonable period, to
the investor then they'll be more inclined to back you. If
you can't then they'll take their money elsewhere.
4. Practice your presentation
It's said that investors invest in people and this is most
obvious when a business owner presents their business case
to prospective investors. You may have the greatest
business proposal and CV in the world but if you can't
string 5 words together in a sentence then an investor will
lose a lot of faith in you.
If you're not used to presenting then it can be scary. If
you're not used to the tough line of questioning that can
sometimes come from investors then that can be daunting.
And if you haven't prepared then you've effectively blown
it before you've even walked through the door.
Investors are not ogres, although some are quite curt and
don't like wasting their time or concentration. So you need
to prepare carefully, anticipate and address the areas of
potential concern, listen to their questions and answer
them clearly, succinctly and honestly. If you do all this
then you'll have a much stronger chance of succeeding in
raising investment.
If you prepare and practice and build your own confidence
in what you're presenting then you stand a much greater
chance of being financed. If you try to wing it and expect
to convince investors with the sheer force of your
personality, charm and cheesy sales techniques then a used
car lot awaits.
5. Know what you want and what you're prepared to give
This may sound obvious but it's the cornerstone of any
negotiation. And this is a negotiation from the very
beginning. You need to be very clear about what you want
and be willing to walk away from the table if you can't get
it. You also need to understand that you won't get
something for nothing. And you need to know what you're
prepared to give, which could include an equity share in
your business; security on your business assets or your own
assets; a commitment to pay high interest rates on loaned
money; and covenants that will obligate you to frequent
detailed reporting and the potential to have all your
assets and your company taken away from you.
Now if all that hasn't scared you off yet, then you also
need to be aware that an investor is probably going to be
looking to get more than you are initially prepared to give
and you'll end up in some element of negotiation.
You need to understand what the investment will do for your
business, and what will happen to the business without it,
and decide whether the sacrifice of equity is worth the
investment.
You'll also need to consider what it will really mean if
the equity given for the investment hands ultimate control
of the business to the investor. That's a serious step and
needs to be taken very carefully.
Ultimately, although you want to negotiate, you need to be
realistic about what you are asking for. In proposing an
equity share for an investment you'll be assigning a value
to your business. And that value will be challenged, so be
prepared to back it up. Investors get very tired of
business owners trying to convince them that their start up
company with no sales warrants £1m of investment for
10% of the business. It's unlikely you'll be able to
justify a £10m valuation on an empty space, a few
bits of paper and a big dollop of enthusiasm.
If you know your desired outcomes and you can justify them,
you'll be in a better position to negotiate. If you're
walking around in a dream then you're likely to get a rude
awakening.
If you're not sure on any of these areas, then make sure
you get some professional help. It's a lot better to invest
some time, effort and money up front to get the right
approach than to waste many months and even more money
learning the hard way. Think about what it costs you
personally for each month that your business growth is
inhibited. When you look at it this way, getting the right
support at an early stage can save you a lot more time,
money and effort in the long run.
About the Author:
Andy Warren is a chartered accountant, successful CFO and
entrepreneur with extensive experience in M&A, Corporate
Finance, Business Growth and Exit Strategies. He is the
Managing Director of Marshall Keen Ltd
http://www.marshallkeen.com a company specialising in CFO
services for early stage tech businesses. Marshall Keen
also provides support for companies seeking to raise
finance through Funding Decisions
http://www.fundingdecisions. com
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