Business Growth Masterclass 13: Marketing Materials – Ads

Hello there, and welcome to the 13th instalment of my Business Growth Masterclass. The step by step guide to building the business you always wished you could have.

Today, we’re going to look at the importance of high quality advertisements in your overall marketing mix.

As ever though, before we get our teeth into today’s material, lets just check on actions from the last Business Growth Masterclass:

Checkpoint:

  • You have created a list of words to use in your marketing materials that will target your potential customer’s emotional motivators.
  • You have practiced writing headlines, and are working to strengthen the headlines you have been using.

For many small business owners, advertising is a confusing, expensive marketing strategy that delivers mediocre results.

We’re surrounded by advertising everywhere we look. From TV commercials and Google Adwords to local newspaper and radio spots, everyone is vying for your attention and the money in your wallet.

So, as a small business owner, how do you weed through the big corporate marketing campaigns and your competitors’ ads, flashy design and high budgets, and figure out what you should do for your own business?

In this Masterclass I want to show you how to create clear, cost-effective ads and placement campaigns that get results for your company.

I use a few hand picked templatesfor my coaching clients and I’m going to share some of this material with you today. They’re not going to win any advertising awards, but they don’t need to because they’ve generated hundreds of thousands of pounds for small business owners just like yourself! At the end of the day, do you want an advertising trophy, or thousands of pounds in the bank?

In this Business Growth Masterclass we will cover:

  • Types of advertising
  • Print advertising for lead generation
  • Steps to creating effective (and inexpensive!) print and classified ads
  • Testing and measuring your ads
  • Examples of effective ads

Successful advertisements are those that have been designed with a clear purpose, and for a specific target audience.

Successful ads are successful because they pay for themselves with the sales traffic they generate. They bring in leads, promote products and services, and maintain awareness of your business.

So, like all of the lead generation strategies you’ve been working on, effective advertising is rooted in a strong understanding of your target market and how to motivate them to do what you want them to do.

Successful advertising, no matter what its specific purpose is, always:

  • provides a benefit, meets a need, or solves a problem
  • targets an audience that wants or needs the benefit or solution
  • offers a product that is closely tied to the benefit or solution
  • clearly communicates the message (the benefit or solution) and is easy to understand
  • pays for itself by generating a high volume of sales traffic

Every business should have an overall strategy or purpose for their advertising over time. This will not only allow you to save money by making bulk ad purchases, but will keep you from advertising on an infrequent basis, or in an ad hoc fashion.

Align your advertising with your business growth or positioning goals, and map out a six month or year-long strategy. Do you want to position your business as the expert in the industry? Double your lead generation? Sell a specific product or service? Announce new products or services? Maintain awareness of your company?

Here are some forms of advertising that each have a separate purpose:

Information Advertising is a common form of advertising that features the company in question in a positive light. Be careful not to misuse this form, as no reader is going to be interested in an ad that is too “me”, “me”, “me” focused. Always provide something of interest or benefit to your reader.

Image Advertising is a type of advertising that reinforces your brand name and image. It’s a less aggressive strategy that aims to keep your business at the top of customers’ minds, even if you have no specific message to communicate. It might include running frequent small ads with just your business logo and phone number or email address.

Ads That Sell convince a prospect to make a purchase before they’ve even identified themselves as prospects. These are more rare forms of advertisements, and harder to create. Lead generation ads are a more effective way to generate traffic.

In this Masterclass, we’re going to focus on advertising for lead generation.

Ads that have been created for lead generation have a strong “call to action” and are focused on motivating readers to respond.

You may want prospects to pick up the phone, bring in a coupon, enter their contact information in a contest, call for free information, visit your website or visit your place of business. At that point, they enter the formal sales process and you can work to convert them into loyal repeat customers.

Use the emotional motivators you’ve been focusing on the previous Business Growth Masterclasses to speak to your target audience, and focus on getting your readers to do something that identifies themselves as potential buyers.

1. Design your advertising strategy. Advertise to your target market in the places they go to most often for information.

Using the information you gathered in your market research, determine the publications that your target market accesses most often.

  • Do they read the local newspaper? If so, which section?
  • Is there a community newsletter or neighbourhood publication that would also serve as an effective vehicle for your message?
  • Is there a local listing publication that would serve as an inexpensive way to test and measure your offer?
  • Can you create a YellowPages ad that generates leads?

Once you have determined the publication (or publications) that you wish to target, make contact with the sales representative at each. This person is a great resource for you to use to your advantage – ask questions about size, specs, deadlines, proofs, changes and other expectations. Newspapers often use their own systems for layout, and have their own requirements for file preparation.

This person will also have demographic information on the publication’s readership, so gain access to that data and use it to inform your campaign.

When you are establishing a relationship with the publication, make sure to spread your advertising budget out to maximise your investment. Publications will often give you discounted rates when you buy in bulk, or commit to a certain budget over the year. Keep in mind that you will need to test and measure which ads are effective, and which aren’t, so try to structure your contract in a way that allows for flexibility.

While you are looking for a good advertising rate, remember that advertising is an investment that you make into the growth of your business. That money is used to ‘buy’ customers, whose purchases become your return on investment.

Ad placement is also an important consideration, but you will have varying degrees of influence over the final placement. Always request placement that is well forward and in the top right-hand corner, preferably in the section of the paper that best relates to your industry.

Advertise frequently – or at least regularly – to see the highest return on investment. There are a number of reasons for this:

  1. People need to be reminded constantly of your business (even big household names like CocaCola advertise regularly)
  2. There are always new customers to market to
  3. The people who are actually looking to purchase your offering are a percentage of your target market that rotates regularly
  4. People need to see your advertisement regularly to build trust and belief in credibility

Make a plan for regular advertising that suits your budget. You may want to alternate between large and small ads, or between display and classified ads.

2. Write copy for your ad that speaks to the emotional motivators of your target audience.

Use the writing and persuasion skills you’ve been learning in the past two Masterclasses, and apply the same principles to writing your ad copy. The next Masterclass will take an in-depth look at copywriting; so more help is on the way!

Like you learned in the headlines Masterclass, the most important part of your copy is your headline. You need to start with a headline that catches their attention with emotional triggers, and then gives them a reason to keep reading and care about what you have to say.

In advertisements it’s especially useful to follow your headline with a subheadline that is equally interesting and engaging. The remainder of your copy should focus on communicating the benefits or solutions that your product will provide, and deliver on any promises you made in your headline. Tell your prospects why they should take action, and what they’ll get when they do. Use the emotional trigger words to hit their ‘hot buttons’ and keep them reading.

A final tip in writing ads for lead generation is about weeding out unqualified leads. Make sure you include enough information in your ad to deter unlikely customers from making contact with you. For example, be up front about price and you’ll avoid dozens of phone calls from people who can’t afford to purchase your offering.

3. Ask your customers to take action.

Since the purpose of your ad is to generate qualified leads, your call to action has to be prominently featured so your readers know what to do and how to do it.

  1. Ensure the way you want them to contact you is a larger font size than the rest of your contact details, or the only contact method.
  2. Tell them how to receive what you’ve promised – free information, a special offer, preferred status. For example – Call 0845 6669997 right now and ask for Ted; Visit www.newco.com and sign-up to start receiving your bonus guide; or come to the store and ask for your membership card.
  3. Link your call to action to copy that mentions customer benefits and rewards. Phrases like, Call now and start receiving: lists of benefits are particularly strong motivators.

4. Layout your ad using these guidelines.

Remember that it is the strength of your message and the clarity of the layout that will determine how effective your ad will be. Resist the urge to get really creative and stick to a clean and simple design.

Layout should be kept simple and allow the message to come through clearly, not the formatting. Keep all type horizontal, and avoid the urge to get too creative.

Headlines are absolutely essential to successful ads. Create a powerful headline that draws in readers, and make it stand out from the rest of the ad.

White Space gives your reader’s eyes a place to rest and will keep their attention on your ad longer. If you cram too much copy or too many images into a small space, your readers will move on.

Type needs to be easy to read, but also stand out from neighbouring newspaper copy. Stick to a maximum of two types of font, and avoid font sizes below 9pt. ALL CAPS and reversed type (white on black) should also be avoided.

Images need to be professionally taken in order to be reproduced in newspapers. Take care that black and white images are not too dark, or too light, and choose photos the will clearly communicate your message.

Color can boost the response rate to your ad by almost 40% over a black and white one, so use it if you can fit it into your budget.

5. Make sure to be aware of and set yourself apart from the competition

Pay attention to what your competitors are doing so you are aware of what they are doing well, doing poorly, or not doing at all. With this awareness, you can make choices to set yourself apart, or improve on your own strategies.

Without copying their strategies (you don’t want to be a “me too” business), look at their messages, layout, placement choices and offers. What can you do to give your offer or your ad an edge? Is there something they haven’t thought of?

You may want to get into the habit of clipping their ads out of the newspaper, and making observations about the messaging or design. Use this information to improve your ads and distinguish your business, but stay focused on your own purpose and messages.

6. Test and measure each and every ad, every time you run it.

Like I said above, successful advertising is advertising that pays for itself.

It is helpful to think of advertising as an investment, rather than an expense. You are investing money in your business and using it to ‘buy’ customers. Ideally, those customers will offer you a favorable return on your investment by purchasing from you on a repeat basis (we’ll look in detail at customer acquisition costs and lifetime value in an upcoming Masterclass).

The only way you will know if an ad is paying for itself is if you track and measure the results it generates. You need to know where your customers are coming from, how they found out about your business, and why they decided to take action.

You can use your lead tracking system to do this, and then assess the results at the end of a fixed time period. You can also put codes or “keys” on your ads to indicate where your customers came from. This includes actual codes on coupons that tell you which publication the ad was placed in and in which week, as well as different offers and bonuses: Buy 2 get 1 free vs. Free gift with purchase, or Guide to Home Energy Savings vs. 25 Ways to Save Money on Energy Costs.

Remember, effective print and classified advertising rarely needs to be flashy or clever.

Get into the habit of always asking yourself, “what am I trying to accomplish with this ad?” You can even write your purpose on a sticky note and put it on your computer screen to keep you focused. Then, make sure that your headline, message and unique offer all cater to that purpose.

Effective advertising doesn’t have to be complicated, expensive, or even cleverly designed. Like all aspects of lead generation, it really comes down to a strong understanding of your target audience, and knowing how to communicate with them.

So, in the next Business Growth Masterclass I’m going to help you become a better copywriter. You’ll build on the skills you cultivated creating strong offers and writing effective headlines, and learn how to craft persuasive text.

Oh, by the way, if you would like some help with the ideas discussed in this, or any of the previous Business Growth Masterclasses, or to get expert help with any other aspect of growing your business, use the following form to get in touch: (Listen, I know some of you don’t like filling in forms like this, but I promise you it will be worth your while. Go ahead!)

Thanks for tuning in!

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Do You Know How Your Client’s Make The Decision To Buy What You Sell?

Have you ever given any thought as to how your clients make that all important decision as to whether or not they will buy your product or service? What is it EXACTLY that triggers their buy / don’t buy button? Is it really price that controls their decision, or are other factors involved?

What you need to know…

Believe it or not, price is actually one of your prospects last considerations. Human nature says that no matter who buys what you sell, they will always want “the best deal.” That doesn’t mean the lowest price, but it does mean they want the most “VALUE” for the price they pay. The perception that your product or service offers extraordinary value controls their final decision.

Why you need to know this…

The key is to create “extraordinary value” as it relates to what you sell. In fact, if you do this, you can even charge a much higher price, providing the perception of value justifies that price. Unfortunately, most business owners don’t have a clue how to create “extraordinary value,” and therefore don’t offer it to their prospects, costing themselves massive market share and a boatload of lost revenue.

To create value, a business must “innovate.” You must understand the things your clients want from your product or service, and then use innovative ideas and solutions to either remove the pain and frustration they normally associate with what you sell, or enhance the benefits they receive from using it.

For example, the working mum who feels frustrated and worried when she drops off her child at daycare because she doesn’t know how the child is being cared for finds tremendous relief and peace of mind (extraordinary value) when the daycare installs Web Watch… a 24 camera surveillance system that allows parents to view their child online, anytime.

The cost to you if you fail to act…

If you fail to create “extraordinary value,” then you look like, feel like and smell like your competition. You will be forever doomed to compete with them on price, and when you’re forced to compete on price, you have just lost the battle. There will always be someone willing to undercut your price… ALWAYS!

By innovating your business, you begin to separate your business from your competition. You begin to eliminate your competition from the minds of your prospects… and you will have your prospects literally saying to themselves that “I would be an absolute fool if I bought this from anyone else.”

Innovation attracts your “ideal” clients to your business. These are the clients that will buy more from you at premium prices. They will spend more money and buy from you over longer periods of time. Your revenue and profits begin to skyrocket as you begin to add unprecedented market share.

Look for ways to “innovate” your business and do so in such a way that you create extraordinary value in the minds of your prospects.

Do you have employees? Have you heard of Real Time Information (RTI)?

Real Time Information (RTI) – Half of small businesses never heard of it !

46pc of companies have never heard of the new system for paying over PAYE , which is called Real Time Information (RTI), a survey conducted by Crunch Accounting found.

RTI means that employers must send information to HM Revenue & Customs every month on how much each employee has been paid and how much tax has been deducted under the PAYE system.

One in three companies said they were only “vaguely aware” of RTI, while 81pc admitted to being unprepared for it.

These statistics are worrying and show just how unprepared small businesses are.  They will need to invest in new payroll software or ensure that any outside provider of payroll services are compliant.  Fines will start in 2014.  What is more under reporting in order to save cash in the hope that they will be able to afford any adjustment at the end of the year will no longer be an option.  A recent article in the Telegraph highlighted the fact that RTI may tip struggling companies over the edge

HMRC says that RTI will provide a much needed update for PAYE.  However, it should be remembered that the system is designed to work with the Universal Credit that will be brought in by the government later in the year.  For universal credit to work properly it will need to be in sync with RTI so that benefits can be accurately assessed and paid on time.

If your business is behind on PAYE now would be a good time to address it before you get embroiled in trying to implement RTI.

Does your business have that certain something that make you stick out from the crowd?

Do You Have A Unique Selling Proposition; that certain something which makes you stand out from the crowd?

If I were your prospective customer, why should I do business with you above any and all other options? Why would I be an absolute fool to buy what you sell from anyone else but you? That answer should be clearly articulated in the form of your USP.

What you need to know…

A USP is the single, most distinct and important benefit a business owner provides to their clients that’s different from their competition. It’s absolutely critical to not only create an effective and highly compelling USP, but to use it in every piece of marketing you develop, and in every form of communication you use with your clients and prospects.

Why you need to know this…

Your USP, working in tandem with your elevator pitch, creates a huge competitive edge for your business. Developed properly, it will separate your business from your competition, eliminate them in the minds of your prospects and have them saying to themselves that they would be fools to do business with anyone else but you.

For example, most business owners place the name of their business at the top of their business card. That’s the worst thing you can put there. No one cares who you are or what you do. They only care about the benefits your product or service offers to them.

Instead of a jeweler’s business card saying “John’s Jewelers,” what if it said this…

Discounted Diamonds – Unmatched Quality, Untouchable Price, Unbeatable Guarantee

In just a few words, would you feel like an absolute fool if you bought a diamond from anyone else but this jeweler? That’s the power of a well-designed USP.

The cost to you if you fail to act…

Do you have a Unique Selling Proposition?

Do you use it in every piece of marketing you create?

Do you have it prominently displayed on your business card?

If you don’t, you’re losing market share, a massive amount of potential revenue and the opportunity to dominate your market.

To your success,

David T Preston

The Financial Challenges and Pains faced by SMEs and The funding options available to them at different stages of their development.

The Financial Challenges and Pains faced by SMEs and The funding options available to them at different stages of their development.

Structure

1. Introduction

2. Stages of Growth

3. Funding Options

4. Types of funding available

5. Stages of Growth and the Funding Options available

Introduction

If only the Government and high street banks understood the challenges faced by SMEs in running their businesses. The sad fact is that this vital sector to the British economy is either overlooked entirely or offered finance at exorbitant and unacceptable rates.

The challenges nearly always boil down to cash flow problems. However, if lending was increased to the SME sector not only would these challenges disappear but valuable jobs and growth could be created it is a win/win situation.

The challenges created by lack of cash flow include the inability to:

 Fund new orders due to debtors paying late
 Pay for vital imports of stock
 Pay VAT or PAYE on time
 Plan achievable growth
 Buy new technology
 Keep acceptable credit terms with suppliers
 Take advantage of volume discounts
 Introduce new products or services
 Increase stock on a seasonal basis
 Start a new business
 Acquire a new business
 Stave off a pending decline

It is very important for management teams to review their funding needs at least once a quarter. They need to be aware, at all times, of any cash flow difficulties that may be on the horizon and what solutions are available to them.
The solutions that will be available to them will differ depending on the stage of development that the company is at when the funding need appears. Not all funding solutions will be suitable or even available to all companies.
Suitable funding solutions need not be hard to arrange as long as the management teams are not taken by surprise. If they are taken by surprise, are not prepared and have to go cap in hand to the bank, they are then more likely to be offered the wrong solution, at inflated prices and onerous terms and conditions. That is if they are offered funding at all.

The key to successful funding is to be aware of your needs well in advance. Firstly, prepare the ground thoroughly, research the marketplace and then make the funders compete for your business, just like any other supplier that you deal with. Money is just like any other product that you buy.

Stages of Growth
As mentioned above, not all funding sources will be available to you. It will depend on what stage of growth your company is experiencing. It is important to understand the stages that many companies will experience at some time during their life.
The following list contains many of these stages, although the list is not completely exhaustive. Some businesses will experience all the stages and some just a few. It is also possible that a number will only experience a couple of stages, going straight from concept to collapse.

The major stages of growth are as follows:
 Concept
 Start-up
 Growth
 Consolidation
 Acquisitions
 Management Buy Outs (MBOs)
 Management Buy Ins (MBIs)
 Decline
 Failure
 Phoenix

Funding Options
Now that we have identified the stages of growth, we need to identify the funding options that may be available, and when we have done that we can discuss which options go with what stages of growth.
Remember that funding seldom comes from a single source and in most cases is a mixture of different types of funding. It should also be noted that taking risks is not in the nature of funding providers and, in the marketplace that we are in at present, personal guarantees for any type of debt funding will be required. These can be either supported or unsupported. A supported personal guarantee normally involves the pledging of a property or other asset to guarantee the loan. Angels (explained later on) taking an equity stake are more likely to take risks but will still want to minimize them and this will require a much higher return to compensate for the risks that they are taking.

Types of funding available:
The 3Fs:

Friends, Family and Fools: This type of funding is normally how an entrepreneur gets started. It is also expected that the management team themselves have invested as much as they can in the company, as other funding providers always look for ‘pain’ money that will keep the team focused. Funders will also wonder why they should risk their money if the management teams are not prepared to risk theirs.
Personal Mortgages: If the entrepreneur has free equity available in their home, and is prepared to risk it, then this is the simplest and often the fastest way to raise funds.

Commercial Mortgages:

Once a company is established commercial mortgages may be available for expansion. Loan to’ Values’ in today’s market place seldom exceed 70%-75% and so a reasonable deposit will need to be available. Affordability will also be an important criteria.

Credit Cards:

Using personal credit cards is not a recommended method of raising capital, because it is one of the most expensive financing methods. Unfortunately many people have resorted to raising funds in this way unaware of the fees and payment terms that are applicable.
There are, however, a number of companies that will buy your credit card receipts from you in advance, if you have been established for a while and have a trading history. This is not a cheap method of easing cash flow problems but can help out if you have short term problems.

Grants:

These vary in amounts and are dependent on the part of the country that you live in. They are becoming much harder to find and secure. It is always a good idea to talk to a specialist who will know what is available locally.

Recruitment:

Recruiting a non-executive chairman, with capital to invest, is often a neglected source of funding. If the right chairman is recruited he or she may also bring much needed market experience as well as a valuable contact list. This sort of recruitment is often undertaken on a success fee only basis; so no fees may be payable until the right candidate has been found and the capital injected.

Enterprise Finance Guarantee Scheme (EFGS) Loans:

These loans are available from many sources and not only the high street banks. They are much more difficult to obtain than the Small Firms Loan Guarantee Scheme (SFLGS) loans that they replaced. The government gives the lender a 75% guarantee against default which the borrower has to pay a 2% per annum additional fee for. Even with this guarantee most banks still ask for 100% guarantees from the borrower. As these loans are a last resort, this seems to disqualify the very people that they are meant to help. A good funding expert will know which banks are lending at the moment and what will be required to make a successful application.

Invoice Discounting and Factoring (ID&F):

Invoice discounting and factoring comes in many forms. It is a valuable source of funding if you have a growing debtor ledger. An ID & F provider will buy your debtors from you and thereby freeing the capital tied up in those invoices. The average ID & F provider will advance 75% of the value of the invoices and once the client pays then the remainder, less charges, is also paid to you.

Most companies in this marketplace will require you to undertake at least a one-year contract with a 3-month cancellation clause and will also require you to put all invoices through their system, even those that pay you quickly. There are, however, a number of companies that now offer single invoice discounting which does not tie you to a contract and lets you discount or factor just one or two invoices at a time. You might need it when the VAT is due, or to fulfill that large order that has come in unexpectedly.
There is now also one company that lets you auction individual invoices to the highest bidder.

Trade Finance:

If you have a confirmed order from a credit worthy client but the product is made abroad and the manufacturer wants payment in advance but your client wants/expects at least 30 days credit, then Trade Finance may be the answer. Trade funders may purchase the goods on your behalf and following delivery to the client collect what they are owed by using invoice discounting or factoring to get their money back.

Stock Funding:

Stock is one of the hardest areas to fund and traditionally only available to those companies that have built up a good track record with a funder. There are some new stock funders emerging, who will buy stock for an organization and who will then hold the products in their own warehouses until you need to take delivery and have paid for the goods.

Angels:

Angels are investors who are prepared to invest in start-up or growth companies for an equity stake in the company. They are prepared to take the risk of investing as long as they can see from the business plan that the management have got the required experience; that there is a sound and detailed sales and marketing plan, backed by a full explanation of all assumptions made and that all operational details have been thought through. They will require a high return on their investment and a clear exit strategy within a 3-5 year period. Make certain that you have registered for EIS as this makes investing in your company even more interesting for an Angel due to the tax concessions that they will receive.

Crowdfunding:

This is a recent interesting development and comes in 2 forms; equity crowdfunding and loan crowdfunding. The principle is the same in both situations, multiple small investors combine together to invest or lend money to a company. The amounts invested can be quite small, often only a few £100 from each investor, so the risks to a single individual are limited. This is an interesting way for start-up companies to get their first start in life. It should be noted, however, that there are issues concerning the EIS scheme with this type of funding. It is also important not to overlook one of the advantages of traditional business angel investors, which is the experience and contacts that they often bring with their investment.

Turnaround/Recovery Angels:

These angels are willing to take a much larger levels of risk and specialize in turnaround or recovery situations. The types of companies that they are willing to consider are those that have fallen on hard times but which in the past were successful enterprises. In other words, good companies that have gone bad for an identifiable reason. These angels can act fast and will often talk to your creditors and secure some much needed time for additional funds to be injected.

Bank Overdrafts:

These do have their uses, if you can get one but they should come with a health and wealth warning. Bank overdrafts can be taken away overnight and so should be used with caution. In today’s marketplace most of the high street banks are also looking for 100% personal guarantees and these often have to be supported by property. Overdrafts are almost impossible to obtain if you are a start-up as many Banks no longer will lend solely on forecasts.

Commercial Loans:

Rather than an overdraft, try and get your Bank to give you a commercial loan. These will also need to be supported by personal guarantees but will be for a fixed period of time and unless you default they cannot be taken away overnight.

Leasing and Hire Purchase (HP):

Why use your valuable cash flow to buy assets for the company when you can lease them over a set period of time and keep your available capital for running and growing the business. Sale and leaseback is also a useful way of raising additional capital on assets that you already own outright. You can sell them to a leasing company who will give you a lump sum and then you can lease the assets back from them.

Regional Venture Trusts:

These are very useful for start-ups and growth companies as they will invest in interesting propositions with high growth potential. Normally they will invest more than Angels but less than Venture Capital.

Venture Capital (VC) and Venture Capital Trusts (VCT):

VCs are normally looking for larger opportunities than the average SME can offer. A few, however, are beginning to look at sub £1m investments and they are therefore worth keeping in mind. Be prepared for some harsh negotiating and for some stringent reporting requirements. VCTs on the other hand are looking for smaller opportunities to invest in and are a useful source of funding.

Stages of Growth and the Funding Options available
Now let us put the stages of growth and the available funding options together. This is not an exact science and there will be overlap in a number of situations;

Concept Stage:

There is very little help for you at this stage of a company’s development. At this stage the company does not normally exist. This is where the 3F’s come into their own as in loans from family and friends and even business colleagues that you have worked with before. Some small grants are sometimes available for doing market research and prototype building. Many people at this stage will also look to raising money from the free equity they may have in their home and some, unadvisedly, will even turn to their credit cards to make their concept a reality. There are also a number of micro funding organizations springing up that will invest in a concept in the hope of then assisting the company to get set up and started.

Start-up Stage:

One has to be very careful at this stage and costly mistakes can be made. Very often the entrepreneur is so keen to get going that expensive funding is accepted or they sell too many shares for too little money. This will have a significant impact on your ability to raise further rounds of investment without losing control or becoming so diluted that you lose interest.
All the sources of funding available at the concept stage are also available at this stage plus some additional sources that you can now think about.
These include:
 Recruiting a non-executive chairman with both knowledge and capital
 Applying to a Bank for an EFGS loan which gives the banks a 75% guarantee by the government. You pay 2% per annum extra for this guarantee over and above whatever the bank charges for the loan. The banks do not like these loans as they are very risky for them and are therefore difficult to obtain. But they are a good source of funding and there are other organizations that have the right to offer them that are more sympathetic than the banks.
 Leasing and HP. Very helpful at this stage to finance cars, plant and machinery and IT equipment. Remember, however, that you need to be a UK homeowner and be prepared to give personal guarantees.
 Invoice Discounting or Factoring. This type of funding for a start-up is often very important. The funders are not particularly taking a risk on the start-up, they are taking the risk on your clients. Remember there are specialists that are happy to start providing very small sums to start with and others that will be very flexible and are quite happy to just buy one or two invoice at a time to suit your requirements. There is now even an auction site that lets you sell your invoices to the highest bidder.
 Angel Funding. This is perhaps the most important method of raising finance for a start-up, but it is also the most time consuming, the most difficult and the most expensive. You need a first class funding business plan, the returns for the investor will be high and so the business must be quickly scalable and there must be a realistic pre-investment valuation as well as a well-defined exit strategy. You need to have something that sets you apart from your competitors. Something that makes you unique and gives you a sustainable business advantage.
 There are many national and local angel networks available, but it is much better to approach them through an experienced intermediary rather than go direct yourself. Crowdfunding has introduced a new type of angel into the market place and this type of funding can be very interesting, but you still need to have a great business plan. Small investors will care just as much about the return on investment and will need to believe that you can deliver the business plan.

Growth Stage:

Once again all the ones mentioned at earlier stages will be available at this stage as well. The banks will be slightly more interested in you at this stage and overdrafts may be an option, but you should still try and avoid these and request a commercial loan instead. Remember, however that term loans have to be asset backed and have a defined payback plan. Commercial mortgages should also be easier to get at this stage.
Other sources of finance to consider are:
 Trade Finance
 Stock Finance
 Loans from angels
 Regional Venture Trusts either for equity funding or mezzanine loans.

Consolidation Stage:

At this stage of the company’s development you are much more interesting to funders and should be able to renegotiate existing deals. So at this stage look at all the previous debt deals that you arranged and see if you can now get better deals. So have a complete review of:

 Your commercial mortgage
 Bank debt; even consider a total change in banking arrangements
 Invoice discounting or factoring contract
 Your leasing and HP agreements
 All trade and stock funding facilities

Acquisition Stage:

Having reviewed all your existing facilities at the previous stage, you now need to find additional funding to help finance any company acquisitions that you want to make. Looking at a likely target you should always look at their assets and decide if part of the cost of acquisition can be paid back by using invoice discounting or factoring to raise money from their debtor book and also consider selling and leaseback of any owned plant and machinery.
Other areas of funding to consider at this stage are:
 Angel Funding
 VCTs
 VCs

Decline Stage:

Unfortunately many companies, at some time or another, will experience this stage and hopefully come out the other side stronger and fitter.
At this stage you may consider:
 Second charges on property
 Re-financing of any owned assets
 Short term finance such as single invoice discounting
 The sale of future credit card receipts
 You may also consider the recruitment of a non-exec chairman to bring in new ideas and capital from someone who has done it all before.

Failure and Phoenix:

At this stage your only hope may be to approach the Angel networks that specialise in turnaround situations. Most pre-packs and phoenix operations fail because no new money and equally important no new ideas are brought into the company and the same mistakes are made all over again. Bring in the turnaround angels and you get both capital and ideas. Invoice discounting and factoring are also very useful at this stage as they do not rely on looking at the past history. Instead they look at the quality of your customers.

Specialist Funding for all Types of Business and Stages of Growth

The current global economic climate and the parlous position of the banking system are adding significantly to the pressure on UK businesses. However, at 4bc, in collaboration with our strategic partners, we pride ourselves on being able to deliver multiple solutions to meet the individual financial needs of companies. No matter where a company is in its own cycle, we have access to funding for start-ups, expansions, contractions, turnarounds and even companies which are no longer supported by their banks. Introductions can be made to over 650 different sources of funds, including equity, debt and asset backed finance.
Probably the most immediate need for most SMEs is cash flow – we have the solution in terms of Invoice Discounting or Factoring with a panel of 47 funders. However, we adopt a competitive engagement (unlike most banks) thus providing transparent and cheaper options for business. For companies that require funding for only a limited period we offer short-term single or selective invoice discounting or factoring.
These are but a few weapons in our armoury aimed at supporting UK business. Other options include Angel Funding, Trade Finance, Turnaround Finance, Leasing and HP including Sale and Lease Back and even IT leasing, Commercial Mortgages, EFG and Commercial Loans.
In addition to funding, we offer comprehensive support and expertise to businesses by means of Business Planning and Mentoring. Our team has a wealth of practical business experience available to our clients.
Services include: Business plan scoring, business plan creation and re-write, financial modelling, sales and marketing planning, due diligence responses, investor presentation creation, investor introductions and meetings and final investor negotiations.

However small or large your need my funding resource partners can greatly enhance your chances of success.

To discuss call me on 07539 365747
Or email david@4-bc.co.uk

Ever wondered why is it that some people are better at achieving their goals than others

Why have you been so successful in reaching some of your goals, but not others? If you aren’t sure, you are far from alone in your confusion. It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer — that you are born predisposed to certain talents and lacking in others — is really just one small piece of the puzzle. In fact, decades of research on achievement suggests that successful people reach their goals not simply because of who they are, but more often because of what they do.

1. Get specificWhen you set yourself a goal, try to be as specific as possible. “Lose 5 pounds” is a better goal than “lose some weight,” because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, think about the specific actions that need to be taken to reach your goal. Just promising you’ll “eat less” or “sleep more” is too vague — be clear and precise. “I’ll be in bed by 10pm on weeknights” leaves no room for doubt about what you need to do, and whether or not you’ve actually done it.

2. Seize the moment to act on your goals. Given how busy most of us are, and how many goals we are juggling at once, it’s not surprising that we routinely miss opportunities to act on a goal because we simply fail to notice them. Did you really have no time to work out today? No chance at any point to return that phone call? Achieving your goal means grabbing hold of these opportunities before they slip through your fingers. To seize the moment, decide when and where you will take each action you want to take, in advance. Again, be as specific as possible (e.g., “If it’s Monday, Wednesday, or Friday, I’ll work out for 30 minutes before work.”) Studies show that this kind of planning will help your brain to detect and seize the opportunity when it arises, increasing your chances of success by roughly 300%.

3. Know exactly how far you have left to go. Achieving any goal also requires honest and regular monitoring of your progress — if not by others, then by you yourself. If you don’t know how well you are doing, you can’t adjust your behavior or your strategies accordingly. Check your progress frequently — weekly, or even daily, depending on the goal.

4. Be a realistic optimist. When you are setting a goal, by all means engage in lots of positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But whatever you do, don’t underestimate how difficult it will be to reach your goal. Most goals worth achieving require time, planning, effort, and persistence. Studies show that thinking things will come to you easily and effortlessly leaves you ill-prepared for the journey ahead, and significantly increases the odds of failure.

5. Focus on getting better, rather than being good. Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, our personality, and our physical aptitudes are fixed — that no matter what we do, we won’t improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills. Fortunately, decades of research suggest that the belief in fixed ability is completely wrong — abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices, and reach your fullest potential. People whose goals are about getting better, rather than being good, take difficulty in stride, and appreciate the journey as much as the destination.

6. Have grit. Grit is a willingness to commit to long-term goals, and to persist in the face of difficulty. Studies show that gritty people obtain more education in their lifetime, and earn higher college GPAs. Grit predicts which cadets will stick out their first grueling year at West Point. In fact, grit even predicts which round contestants will make it to at the Scripps National Spelling Bee. The good news is, if you aren’t particularly gritty now, there is something you can do about it. People who lack grit more often than not believe that they just don’t have the innate abilities successful people have. If that describes your own thinking …. well, there’s no way to put this nicely: you are wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.

7. Build your willpower muscle. Your self-control “muscle” is just like the other muscles in your body — when it doesn’t get much exercise, it becomes weaker over time. But when you give it regular workouts by putting it to good use, it will grow stronger and stronger, and better able to help you successfully reach your goals. To build willpower, take on a challenge that requires you to do something you’d honestly rather not do. Give up high-fat snacks, do 100 sit-ups a day, stand up straight when you catch yourself slouching, try to learn a new skill. When you find yourself wanting to give in, give up, or just not bother — don’t. Start with just one activity, and make a plan for how you will deal with troubles when they occur (“If I have a craving for a snack, I will eat one piece of fresh or three pieces of dried fruit.”) It will be hard in the beginning, but it will get easier, and that’s the whole point. As your strength grows, you can take on more challenges and step-up your self-control workout.

8. Don’t tempt fate. No matter how strong your willpower muscle becomes, it’s important to always respect the fact that it is limited, and if you overtax it you will temporarily run out of steam. Don’t try to take on two challenging tasks at once, if you can help it (like quitting smoking and dieting at the same time). And don’t put yourself in harm’s way — many people are overly-confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Successful people know not to make reaching a goal harder than it already is.

9. Focus on what you will do, not what you won’t do. Do you want to successfully lose weight, quit smoking, or put a lid on your bad temper? Then plan how you will replace bad habits with good ones, rather than focusing only on the bad habits themselves. Research on thought suppression (e.g., “Don’t think about white bears!”) has shown that trying to avoid a thought makes it even more active in your mind. The same holds true when it comes to behavior — by trying not to engage in a bad habit, our habits get strengthened rather than broken. If you want change your ways, ask yourself, What will I do instead? For example, if you are trying to gain control of your temper and stop flying off the handle, you might make a plan like “If I am starting to feel angry, then I will take three deep breaths to calm down.” By using deep breathing as a replacement for giving in to your anger, your bad habit will get worn away over time until it disappears completely. It is my hope that, after reading about the nine things successful people do differently, you have gained some insight into all the things you have been doing right all along. Even more important, I hope are able to identify the mistakes that have derailed you, and use that knowledge to your advantage from now on. Remember, you don’t need to become a different person to become a more successful one. It’s never what you are, but what you do.

If you want to be one of those who succeed in achieving your goals consistently, e-mail me for further information.

4-bc at the St. Mellion business show

Hi, there. Dave Preston here.

Based in Cornwall and working with business owners and managers to be more effective at growing profit, getting their teams to be more productive and taking some of the strain off!!

Yesterday I was at the St. Mellion business show, dressed as a gypsy, with my two gorgeous assistants (an business partners) foretelling people’s business fortunes using our own unique interpretations of the tarot cards.

It was brilliant fun, and  a great day too.

4-bc (www.4-bc.co.uk) is our company – go and have a look.