Jun 26, 2012

Jun 25, 2012

10 Things Investors Look For in a Business Plan

A business plan does so much more than layout the internal structure of an organization. It provides some key insight to the money-men, the venture capitalists, the angel investors, the private investment bankers or even the traditional bankers. Remember that these people see hundreds, thousands of business proposals a month. And they're all looking for certain things that either make them love your proposal -- or send it immediately to the shredder.

We've worked with nearly 50 investment firms at one point or another for clients for whom we have written business plans, and based on our experiences and the people involved, there are some important factors investors look for the most from the business plan.

1.) How much money is already invested? Do the client or other individuals/companies have a stake in the business?

Sometimes the difference between getting a loan and getting rejected is as simple as that. Imagine you're coming to an investor with a fabulous business plan and you need, say, $500 million for a resort and real estate project. In your proposal you clearly state that you do not have one single dime invested yourself (yes, we had a business proposal like this once!). Do you honestly believe an investor is going to give you the time of day? Of course not. You haven't taken any sort of risk -- why should the investor?

In your business plan, it is key to explain fully, in the executive summary and then later on in the financials, just what monies are involved. Okay, so maybe you don't have any money involved in that resort project, but you DO own the roughly 50 acres of land it will sit upon which is worth maybe $75 million. Good! Mention that in the proposal clearly and accurately, including what kind of land it is, along with a map, some distinguishing features (is it ready for construction, water, pathways, roads, accessibility, etc.) If you have other sorts of assets, something, ANYTHING that can be used as collateral against your loan, make sure it is explained and described.

If you have partners who have chipped in $250,000 for a project worth at the most $2 million, you have a significant edge over other people. Most investors we have dealt with like to see at least 10% of the required funds already in place.

2.) How accurate is the research involved? Does the client know the market, the competitors, and his or her chances?

We can't begin to tell you how many business plans we have come across that had little or no market analysis or competitive structure. The client had no idea about the target market, the competition he was facing, nor even demographics of the area. He had an exciting product, but it was difficult to ascertain just how much success he was going to have SELLING it.

In many cases, an investor isn't as interested in the product as he or she is in the product's success on the market, so a good business plan should have a clear, accurate description of that market. Many things should be included like:

a.) Demographics of your target market and market analysis, with factors such as age, race, income, etc. Think about your average customer walking into your store for your product or service. What are they looking for? What do they look like? How much do they want to spend?

b.) A market analysis that describes the trends and statistics of your potential market. Will your product or service be in high demand for a long time -- or will it have limited 'shelf-life' on the market, coinciding with a new fad, for example. Will the product or service be affected by shifts in the market? Is this a stable target market with limited shifts taking place, or does the market wildly fluctuate?

c.) Do you know your competitors? What are the similarities and differences between what they sell and what you sell? How are you better than them? How are you inferior to them? (Yes, you need to include that, as much as you don't want to.)

3.) How realistic are the financial projections?

Be extremely honest. No start-up business makes a profit in its first year, no matter what you are selling. So make sure not to show that in your business plan. Also don't be too alarmed at the first-year loss. We had a client with a business plan that showed a $400,000 loss against a $2,000,000 loan in his first year of operations and he panicked. Then we explained that he was going to have a loss because his first year of operations would have high expenses as he organized and finished all his preparations for his new company.

Investors expect you to have a lousy first year -- don't beat yourself up about it. It's not the first year that concerns them anyway -- they are thinking 3-5 years down the road. If after three years your company isn't showing a profit, that is when the investors get nervous. After all, why should they put their money into something if your business proposal shows that you won't be able to pay them back? Luckily for our panicked client, his second year showed a profit of about $30,000 and his Year Three profits would equal $375,000, almost erasing his first year loss. He was going to have a steady 40% increase every year after that.

In many instances, the investor thinks long-term, and so should you. Your financials should explain what is going on, and what will happen. Don't try to sugar-coat things, per se, but put a healthy spin on a mediocre beginning. Don't impress the investor with what IS happening -- impress them with what is GOING to happen.

4.) Does your proposal look professional?

You'd be surprised how many proposals are overlooked with something as simple as a large 'BUSINESS PROPOSAL' on the first page. This is merely common sense. If you want people to take you seriously, show your most professional side. Your proposal should be checked for errors, misspellings, proper formatting, and headings, and have clear, easy-to-read graphics or images. A client tried to convince us to use a dazzling bold red text over a green bar-chart and we hastily explained to him why it's not a very good idea to ruin the eyes of a potential lender. Include pictures or illustrations, maps, diagrams and other visual aids, if possible. Also, take a good look at your writing. The character Rusty, played by Brad Pitt, in 'Ocean's 11' said it quite well: "Don't use 7 words when 4 will do."

Talk about your management team, but don't drone on about how instrumental a part they have played in your life. Talk about the great product you have, but don't go on about testimonials from other people,(or if you must, include them in the appendix) And don't be funny. Humor should be left at the doorstep. If you want to be funny, become a stand-up comic. Treat your document and the people reading your document with the utmost respect.

5.) Is the management team solid? Are there good people involved?

Remember that your business is not, and should never be, about you. There have to be some good people involved with you to make it run smoothly. It does not matter what service or product or project is being offered, if you think you can convince an investor you're a veritable one-man show, you are out of your mind.

A client we recently wrote a business proposal for was creating a new mobile-phone service, and amazed us with the list of engineers, technical advisors and IT professionals he had attained. When we saw how the management structure was fully laid out, and how each individual was going to fit in, we knew right away this particular proposal had a good chance to get in the front door.

Investors want to know who is on board, what their job is, their experience in the field you have chosen to represent, and a little of each person's background and education. A solid management team, with a full layout as to positions, responsibilities and backgrounds, is a sure-fire way to get an investor looking at your proposal a lot more.

6.) Is the exit plan well defined?

Unless your lender is going to get involved with you through a joint-venture, or partner, chances are he or she does not want to stick around with you forever. Investors want to know what you're offering them later on down the road, when it's time to cut you loose and count the money you made for them. Some examples of exit plans include:

a). Creating an initial public offering (IPO). If your business has the possibility of going onto the stock exchange later on, and investors can share in dividends, this is very important for them to know from reading your proposal. Let them know how long it will take to get an IPO, and estimate the price per share you foresee, if you're offering investors a first-buy once the IPO goes public, etc.

b). Buyout. Perhaps your shoes-string business is going so well, your investor is impressed enough to want to buy your company completely for several million dollars. If you want to offer this alternative to long-term investing, make sure you let the investor know the approximate value of the company after a certain number of years. A business valuation report is very helpful in this regard. Let the investor know exactly what he or she might be getting into and if it's really worth pursuing. If you can do a valuation of the company based upon your projections, it may assist the investor in determining if you are worth the time and effort to invest.

c). Sell the company to others. If your business has the possibility of going up for sale to other interested parties, the investor should know details such as possible buyers, how much they could pay, the value of the business at the point of sale, etc.

d). Pay out of equity. Let's say Steve wants equity in George's company and receives 20%. Steve loans George the initial funding and an agreement is made that Steve will own this equity for 10 years. Each year, George will pay Steve 20% of the gross profits. At the end of ten years, if any money is still owed on the loan, which is doubtful, George will pay the equity of 20% and a balloon payment of anything that remains on the loan. All this, of course, must be agreed upon at the outset, so make sure you define this clearly.

7.) How much money do you need and how will it be used?

As weird as it sounds, we have had business proposals come past our desks that explain how much money is needed -- but fail to tell us what it's being used for. An investor will balk at someone who says they need $100 million for an oil well project yet doesn't explain where all this money is going. Our business proposals include a special heading for Start-up expenses (when dealing with a start-up company, of course), that explains and lists the expenses the investment will cover, and for how long.

If you want to really impress investors, include what we call a "phase plan". For example, let's say you want to start that oil well project. In Phase One, you show the investor what you'll be spending, in this case, for surveys of the land, preparations for drilling, etc. Phase Two could show expenses for drilling equipment, personnel, and construction of the wells. Phase Three could discuss refining procedures expenditures, and so on. You have detailed out a full "shopping list" for the investor, and they not only know what you're spending, but how it's being spent, and an estimated time when it will be spent.

8.) How will the money be paid back?

On the heels of exit plans, an investor likes to know how you're going to pay him or her back. If you can agree on a certain percentage each month, or each year, that is fine. If you want to offer annual equity and a share of profits, that's great too. But whatever your options are, make sure the investor knows what you're offering.

Detail out all the pay-back options that are available, and order them in importance to you. You might want to think twice if your business has the ability to make $50 million per year, and your investor only gave you $5 million at the beginning, yet you offer a 35% equity every year! Reward your investors, yes, but don't shower them with untold riches for nothing. A happy investor is always good, but make sure you're happy too so that your business continues to prosper.

9.) What is the SWOT like?

SWOT stands for Strengths, Weaknesses, Opportunities and Threats -- and if you do not know these, you have no business, well, running a business. Your proposal should describe each of these areas accurately and with great detail, at least a few paragraphs for each.

Strengths: What really makes your business stand out? Where does it excel?

Weaknesses: Where does your business need help? Where is it lacking?

Opportunities: What positive trends, actions or events do you see that will have a profound and positive effect on your company's success?

Threats: What negative trends, actions or events could cause harm to your business -- and how will you sail past those rough waters smoothly?

10.) How relevant is the business to our society?

A lot of people will try to tell you that investors really don't care about this factor, but from our experiences you would not believe the amount of investment firm applications we have seen that ask this exact question. How your business impacts society, whether locally, nationally or world-wide, can have a positive or negative impact on investor interest. If you have a business proposal that offers 4,000 jobs to your city, or will strengthen economical development, or includes environmentally-friendly factors or some sort, your proposal looks that much better.

Try to take the time when writing to think about how your project affects others around you. What are the benefits? The long-term effects? The opportunities for others? Every business has the ability to impact society in some way. Informing an investor in detail about how your particular project will do so, tells an investor that you care enough about your project to do the extra research, go the extra mile -- and it shows a great deal of determination and heart.

And every investor loves that!

Paula Kalamaras and Paul Kraly co-own Scribes Unlimited, a multi-faceted writing, editing and research company. They are the authors of five books, numerous articles and more than a hundred business plans. Their expertise in business presents a good opportunity for those seeking to showcase their own companies, or to give their current affiliations better exposure through professional articles and PR.

Article Source: http://EzineArticles.com/?expert=Paul_Kraly

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Accountants: SMEs must be cash savvy

Accountants: SMEs must be cash savvy

The Association of Chartered Certified Accountants (ACCA), the global body for professional accountants, said small and medium enterprises (SMEs) need good cash management habits.

Most SMEs are unable to even differentiate between their personal and company financial matters, said ACCA Malaysia Advisory president Datuk Mohd Nasir Ahmad.

"The time is ripe for companies to recognise cash management solutions as a must have business tool that helps promote cost savings and operational efficiencies," he told reporters at a seminar jointly hosted by ACCA and OCBC Bank (Malaysia) Bhd in Kuala Lumpur yesterday.

Read more: Accountants: SMEs must be cash savvy http://www.btimes.com.my/Current_News/BTIMES/articles/lpcacc/Article/#ixzz0vvwbKDCw

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Kesan Ranting Asam Jawa

16 Mac 2009

Dirotan menggunakan ranting pokok asam jawa oleh bapanya kerana tidak menghafal sifir ketika di sekolah rendah,

MENGENDALIKAN tiga perniagaan iaitu pengeluaran dan penjualan produk kesihatan Leesa Formula, lapan buah pusat kecantikan Serenity Spa dan enam butik pakaian muslimah Hajaba, pemilik ketiga-tiga jenama besar ini, Mona Din, 43, terpaksa mencuri-curi masa antara waktu bekerja untuk bertemu janji dengan suaminya sendiri, Zulkefli Muhamad Ali, 52.

Read More

Apr 1, 2012

Want to Register with MOF ?

We can help you as others do..

Pendaftaran dengan Kementerian Kewangan
( MOF ) merupakan prasyarat untuk
membekalkan barangan dan perkhidmatan
kepada Kerajaan Pusat termasuk semua
Kementerian dan Kerajaan Negeri.

Pendaftaran MOF biasanya diperlukan juga
oleh Jabatan dan Syarikat Kerajaan yang
memerlukan pembekal barangan atau perkhidmatan
mempunyai pendaftaran MOF.

Untuk keterangan lanjut, sila klik di sini->http://www.mofkk.com/

Mar 24, 2012



An individual who, under oath or affirmation, gives out-of-court testimony in a deposition. A deponent is someone who gives evidence or acts as a witness. The testimony of a deponent is written and carries the deponent's signature.

The person whose affidavit is being used (the “deponent”) must swear (or affirm) that the contents of the affidavit are true and correct in front of a Justice of the Peace or a solicitor.

More: legal-dictionary.thefreedictionary.com/ 

Moral turpitude

Moral turpitude 

n. gross violation of standards of moral conduct,vileness, such that an act involving moral turpitude was intentionally evil, making the act a crime. The existence of moral turpitude can bring a more severe criminal charge or penalty for a criminal defendant.

 The phrase "moral turpitude" has differing meanings, but all agree that it is conduct which is not only contrary to accepted behavior, but that it also is grossly misdirected.

More: legal-dictionary.thefreedictionary.com/

Feb 22, 2012

Slower property sales with new loan guidelines

The central bank had at the end of last year announced new guidelines whereby prospective borrowers would be assessed based on net income after making statutory deductions for tax, contributions to the Employees Provident Fund and all other debt obligations, instead of gross income previously.


1,200 pelabur rugi RM76.5 juta

PETALING JAYA 22 Feb. - Akibat tertarik dengan tawaran dividen yang lumayan, 1,200 pelabur di seluruh negara kerugian antara RM70,000 hingga RM100,000 setelah mendakwa ditipu oleh sebuah syarikat pelaburan hartanah di Alberta, Kanada yang beroperasi sejak enam tahun lalu.


Feb 17, 2012

Rumah di atas Tanah Pajakan (Leasehold)

Pemilik hartanah yang berstatus pajakan (leasehold), sediakan wang yang mencukui dari sekarang untuk membayar pajakan baru dengan kos yang amat tinggi atau anda akan kehilanagan hak ke atasnya kelak!!!!


A new lease on life

Friday, February 17, 2012 - 18:11
ON June 1, 2011, the Selangor state government implemented a new land policy designed to provide a more equitable renewal of residential leases for individual owners of property.

Prior to this scheme, there was substantial concern by owners of leasehold property that they would lose their homes when their leases expired, if they were unable to pay the relatively high premiums to renew their leases.

Many of those affected were senior citizens and early pioneer residents in Selangor who because of their age were unable to get loans to pay the premiums which were based on the market value of land according to the following formula:

Renewal premium = 1/4 X 1/100 X value of land (per square foot/metre without building as valued by valuation department) X leasehold period applied for (minus what you have left) X area of land

Based on this formula, the premium for a 3,000 sq ft property in Section 1 Petaling Jaya with 10 years left on the lease could amount to RM80,100 to top up to 99 years (if land was valued at RM120 per sq ft).

For a retired person it would be very difficult to raise this money without borrowing from the bank.

The new scheme allows an individual owner of the leasehold land in Selangor to renew his/her lease for up to 99 years with the payment of a nominal amount of RM1,000 provided that when he/she sells the property to a third party the relevant premium assessed at the time of sale is paid.

A condition to this effect will be endorsed on the title. This is only applicable to a sale or transfers to a third party.

Transfers to children, parents and under probate or letters of administration are not affected and can be done without further payment of premium.

This means that individual owners of leasehold lands (the scheme is only applicable to individual owners not companies) can be confident of continuing to live in their homes and pass on their properties to their children without fear of the lease expiring because they can't afford to pay the premium.

Alternatively, an owner of individual leasehold property can elect to pay the full premium and extend his/her lease.

This has a benefit of being able to immediately sell the property to a third party or charge the property to a bank for a loan with the extended lease tenure without having to factor in the additional premium to be paid later which is depended upon the market rate a the time of disposal which in all probability will be much higher.

The incentives in electing to do this is that in the case of residential property, if the premium is paid within the stipulated time is that an individual can enjoy a 30% discount on the total premium payable.

That certainly is a good incentive, because it will definitely improve the value of asset and reduce what would normally be the premium payable.

If you could afford to pay and you do not intend to keep the property in the family or you may want to have liquidity in being able to immediately dispose of the property at a lower cost then this option should be seriously considered.

In both cases above, the extension of lease is done by way of surrender and realienation under sections 76 and 197 of the National Land Code 1965.

Persons seeking to renew their lease must fill out a form available at land office and provide a list of documents in support for the application together with RM150 fee.

They must surrender their original title with quit rent and assessment receipt, copy of identity card, official search of the title, approved location plan from the land office and a letter of consent from the bank if the property is charged.

The land office will process the application and within six months to a year (if you are lucky and its election time even faster) write back to the applicant with the letter of approval in which event you select whether you want to go for the RM1,000 option or the full premium option.

Thereafter, the land office will inform you officially of the amount payable for the full premium if you picked this option and their valuation of the land value as computed in the above formula. It cannot be denied that the new scheme is good for the rakyat.

However, it is hoped that the state government do away with basing renewal premium for residential leases for individuals on market value of the land but instead fix a nominal fixed sum per sq foot/metre.

This should be done in recognition of the contribution of the individual rakyat to the collective economic growth of Selangor and the need to keep its good citizens as residents.

Simultaneously the state should also explore the possibility of allowing a property owner the option of converting his/her leasehold to freehold land with an appropriate mechanism for safeguarding short-term and long-term state revenue.

For example, the state could charge a “one-off payment” of 50% the difference on market value between the leasehold and freehold value of the property, together with imposing an increase in quit rent and assessment of say 15% (to safeguard long-term revenue) for those who elect to convert from leasehold to freehold.

This would yield immediate funds for the state that if properly invested would far outweigh premium increases after 99 years. Certainly this matter deserves to be raised and properly debated at the National Land Council with the view of raising billions of Ringgit in immediate revenue for Malaysia.

This will provide a huge and much needed kickstart to the national economy in line with federal national transformation objectives as well as providing a much needed injection of capital and liquidity into the banking and property sectors.

Such a move will also provide much-needed cash reserves for federal and state governments to fund various critical infrastructure services and health programmes.

For example a 5,000 sq ft bungalow lot in Tropicana, Petaling Jaya with the lease and a current market value of say RM200 per sq ft and if valued as freehold at RM400 per sq ft will yield the government RM500,000 in conversion premium with increase in 15% in quit rent and assessment.

And that is only one bungalow in Tropicana!


Feb 16, 2012

Urus Niaga Forex Haram: Mimpi Ngeri Yang Tiada Kesudahan


Memetik laporan itu, dikatakan kebanyakan daripada eksekutif-eksekutif muda ini sebenarnya mangsa firma-firma yang menawarkan urus niaga mata wang asing (forex) secara haram.

Mereka ditawarkan gaji yang tinggi supaya mencari orang ramai untuk melabur dalam industri forex yang kononnya memberi pulangan yang "amat lumayan".


Perniagaan pertukaran wang asing (Forex) haram

Jawatankuasa Fatwa Kebangsaan memutuskan umat Islam haram mengamalkan sistem perniagaan pertukaran wang asing.

Pengerusi Jawatankuasa itu, Tan Sri Dr Abdul Shukor Husin berkata, ini kerana perniagaan dilakukan melalui pertukaran wang asing seperti itu tidak menepati hukum syarak dan menimbulkan keraguan di kalangan umat Islam.

Jan 31, 2012

Stolen cars being moved fast — and even to Africa and Greece

Car theft has also been made easier for the syndicates, thanks to a high-tech device that can be bought at flea markets and online for about RM10,000.

The device, which connects remotely with a vehicle's system, is not a controlled item because it is a diagnostic tool meant for mechanics and for police use.

A quick web search showed that the device could be bought online as well.