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Chapter 8 continues here
Make Your Presentation Powerful
To be effective,
the presentation must include charts, graphs, and pictures. PowerPoint
slides with only words get boring very quickly, and will never be
memorable. However, do not use cute or inexpensive graphics simply to
have something other than words on your slides. Remember that you are
asking these money sources to put meaningful resources into your
business. Your graphics should powerfully support your message and
instill confidence in your business proposition.
Your presentation
should be suitable for both hard copy and a projection on a large
screen. It should be colorful and suitable as a leave behind that can be
absorbed after you leave. This means that animation and video that might
work in a live presentation should be used only if powerful; even then,
a means must be provided to be sure the message is not lost in your
leave-behind when viewed days or weeks later.
You will have
very little time to make a good first impression. If you are lucky, you
will have an hour to present the ideas that have taken months to
develop. You should time the above presentation and change it if it is
more than 45 minutes. You will need to allow time for interruptions,
questions, and late starts, yet still be done in an hour.
Get advice on
your presentation from a businessperson who is not (i) intimately
involved in the project, and (i) afraid to give you harsh but
constructive comments. If this friendly advisor does not "get
it", then your financing source probably will not either.
Funding Sources
The key is
gathering and understanding options, and then making wise selections.
Here is a primer of the options that exist.
Equipment Financing, Leasing, or
other Supplier Financing
This financing is
for specific purchases of durable assets, often supported or arranged by
the seller of the equipment. This financing is the easiest to arrange,
but will not address your needs for working capital or other growth. The
cost is usually limited to either an explicit or an implied interest
rate that is imbedded in the loan or lease payments.
In some
industries, financing can be obtained from key suppliers. These deals
exchange money for your loyalty. They can be inexpensive financing so
long as the cost of this loyalty is not too high. Insist that suppler
financing be contingent on the supplier’s performance, and that other
terms that are not too stringent. For example, if you make commitments
regarding exclusivity and the supplier is unable to make timely
deliveries, be sure that you have back-up options.
Commercial Bank Debt
Until your
company is quite large (in which case this article would have probably
already lost your interest), this financing will be secured by all of
your business assets, and a personal guarantee from the owners. Your
home or other personal assets will further secure the personal
guarantee. The loan cost is simply the interest rate, which will usually
be a few percentage points above a short-term index rate (such as the
prime rate). Because these loans either have a relatively short term of
a few years, or must be repaid at least once each year, they are best
used for working capital rather than long-term growth.
Asset-based lenders (including
factors)
These loans are
usually secured by a certain type of asset, such as accounts receivable.
These lenders will often lend more money against certain assets than
will a commercial bank, but this comes at a higher interest rate, higher
other costs, and higher routine monitoring of your activities.
When dealing with
asset-based lenders, consider all costs. Fees are not standard between
financing institutions, and can add considerably to the cost of funds.
Understand the details and do the math.
chapter
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Chapters:
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5
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8
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