Menu of options for raising funding for a start up /new venture

Nation building via learning and being the best in business

We normally  operate on a ITO format.    To start business raise capital build the infrastructure, to build the product to offer the customer    

Thus we put up the money build the building and later on look for customer to generate revenue.  And more often not the strategy fails.   

So early on in MBA subject entrepreneurship, we have the serendipity walk:   walk into a street crowded with business and look for other potential business that can be set up.  Cherches le craneu.  Look for hole in what appears to be a saturated market.  Do the cusotmer first approach.  Go find a problem - what pisses you off, look for the solution, make or build the solution (MVP minimal viable product).  You will find out that some successful ventures (as gathered from entrepreneur guests)  that Toby peanuts started from a P3,000 initial seed capital,  Splash from a drumful of acetenone funded by P10,000 wedding cash gift.  So what can be the menu:

1.   Follow the Richard  Branson of Virgin example.  Fund your business from deposits of dp of potential customer.  So this is what contractors printers do.  Programmers.   Ask for 50% dp to start the project   Dont use your own money   OPM.   

2.  Forget the ITO model ie of raising equity borrowing from bank or bombay, or going to a VC.  If you do this right you dont have to go to vc.   

For example a fresh graduate from MBA was planning to put up a logistics solutions company and contacted the billionaire for initial funding.  So he said, think of how you start your company without my help or VC. or going to a bank.   So he had to think hard.   He wrote 100 logistics company (gmail of course) offering solutions to a particular problem (he all ready has a solution)

His offer was if I solve your year long problem by Friday, you pay me $5,000.   Somebody accepted his offer and the problem was solved and he got his $5,000.    So he kept the $2,500 paid a programmer to have a working website/solution.    

He wrote again other prospects and offered $2,000 monthly lease subscription by using his software /solutions.   He got  6 subscribers.   Thats $12,000 x 6 =  $72,000

He met again the billionaire and was asked if he still needed help/financing.  Naw.  That was easy

So you have to train your mind to think out of seemingly helpless situation.

For a batch of trainees, the challenge was how to raise $100,000 in a month if you dont have a job.  And they did come out with fine surprising solutions/plan.  However the thought of having security from P16,000 monthly salary lulls them into complancency and that of dependency.

3.  "What is essential is invisible to the naked eye"

The real cash generator are not those that are visible to the naked eye.  This is the primary idea behind the free Its a bait to get the people get their foot in the door. Once inside the door, the real money can be made on higher margin products.  

     1.  Free coffee - to get people to come in buy snacks sandwhiches which have higher margins

     2.  Free haircut at Landers to buy their P700.00 membership card so that you will be a repeat customer  from whom you get sales and gp

     3.  Amazon Prime -   losing logistics membership thru which you get free delivery.  Now the same

          is offering livestreaming competing with Netflix.  

     4.  Buying a losing firm to get the talent to put up a system/sales platform -  like Jet Com bought

          by Walmart to get them on e commerce plat 

Its really a great deal and a blessing that we have people like Peter Thiel who writes about Zero to One.  Creating one from Zero.    That is the blessing from entrepreneurs.     Entrepreneurs create wealth and help build the nation.

Let us count our blessings, thank the Lord for that, and so that we may continue and be a blessing to less fortunate ones.   

Not much from a team that lacks desire and discpline

Looking forward to the future of business

There was this project that bonked out because of difficulties with personality.  It looked like a promising and profitable venture.  Good location, ripe market. 

I passed this to a team of:   contractor, marketing, former used car sales person and son in BPO.   The initial stint for  funder, a promise of 7 numbers did not materialize.  The investor candidate backed out after pretending its OK.  The experience lasted 5 months.  And now the project is floundering because of lack fo PHP

However, all we need is small money adn employment of Richard Branson No. 4 rule and others too  

CASH Seek prepayments and deposit.

I met the head and requested for study of market whether asking for dp is feasible. The discussion was last Saturday.   The supposed other parties did not arrive.  And now I was asking for marketing plan, the pricing, the product, the promo etc.   They saidi there was all ready.

I have to push harder;  I think none has been produced.

Motivating the team on stalled project

Looking forward to the future of business

This post has requested for a meeting again of the team members involved in a real estate project that has been stalled since January.   

It has been difficult to get the team members togehter.   One did not reply when I requested,   The meeting was resked for 11 am, However the second one did not reply.  went to the designated meeting place.  Only one was there.  I decided to go on with the meeting with the lone attendee.

I tried to motivate  with three stories:

I recollected that the project was turndd down by my own company.   This post begged off from the property owner and two members of the team decided they will continue and they will get investors

One an incumber councilor promised  about P5M, then chickened out on the timeline she promised.   Its now January and nothing is moving.   The land owner is asking  the status;   I am being asked what to answer and we know the answer:   there is no investor yet

Two stories:

\

1.  Richard Branson story and tips of how to put up a million dollar company.  He has five rules

      1.  Find the problem/s

      2.  Create the product /solution

      3.  Have a team

      4.  Get the cash from the customer, have the float

      5.  Take the risk

We have the 4 except No 4.   So what can be done:

     1.  Complete teh bp, marketing plan

     2.  Draft SDP, make price list, do a survey on what will sell not sell

     3. Start organizing sales force

     4.  Get approval

     5.  Pre sell

     Say 3,000 lots.     Price at P70,000.   Price at 35,000 pre sell.  P33,000 cash,  P35,000 P17,500 dp, balance payable in  2 years.   without interest

    That will generate about P100,000,000 total sales about P50,000,000 dp, enough to cover developmetn cost and funds for the owner

2.  Second story

    About BCDA and Heritage.  Story by the chairman

    He was appointed by FVR to be head of BCDA and instructed to make some money  And he asked for budget.  There is none.   FVR told him to be resourceful and produce the money.

   This is what the chairman did.  Of the 300 hectares he asked for bids for the 200+ hectares. And he was able to sell this to the MVP group and got P33,000 offer per sqm.   That would amount to baout P70 B.   And for the remaining for the memorial park.  It was securitized by former head of HDMF, and of the P40,000 initial offering, had two banks buy them at only P20,000 for a 100% ROI.   He raided P2 billion from that and was able to have enough money for development

Brilliant eh.

I asked a plan on how to do this.    

    

Trying to pep the marketing of businesses being bequeathed, are the successors learning?

Looking forward to the future of business

It does not seem that successors have learned much in running the business.  Communication, execution and maintaining standard sticking to vision, mission and principles is not good. Even holding a meeting.

These are the things I am doing

1.  Making new presentation on sales training.  I think I did 12 last week.   

2.  Innovating on new deals (using John Mullins and Sir Richard Branson tip on taking cash.

3.  Incentivizing project officer so that they take the initiative.

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Must see documentaries (photos) for entrepreneurs

Ateneo Professor on Entrepreneurship

From Entrepreneur.com

These are 10 documentaries that start up and entrepreneurs must watch.  Interesting.

Must see documentaries for entrepreneur

Richard Branson's tips for business entrepreneurs

Ateneo Professor on Entrepreneurship

Richard Branson is writing for Entrepreneur.com where he gives advice to aspiring entrepreneurs.
He thinks that with economic uncertainities and rapidly changing technologies, it is difficult to achieve what Virgin has accomplished (  This is a little bit conceited on the part of RB, as all entrepreneurs are.  Anybody, or everybody, given the right passion, and just that one opportunity, one chance, one spark that one space could launch another great business and airline.  etc.  Just look at MZ and other young entreps)

Some of his advice, and they are like other truisms for entreps:

l.  Love what you do;

2.  Be innovative;  be differentiated;

3.  LBL  (not LOL)  Lead by Listening

More tips by Richard Branson