Thursday, June 23, 2011
Private Equity market has been experiencing four to five years an unprecedented dynamism. The figures for 2006 speak for themselves:
* 71% growth in business volume in 2006
* 71 billion of funds raised in 2006 or 22% over 2005
* 208 LBOs carried out in France in 2006, with two thirds of companies less than 100M € turnover,
* 1.5 million people now work for a company in France came under LBO, 9 to 10% of private sector employees,
Private equity is one of the five main areas of activity of the market says private equity (intervention in the capital of unlisted companies generally to achieve horizon 3-10 years of strong capital gains), other activities are:
* Seed capital (or seed money) which represents the first stage since it is for investment projects still in its infancy, funded in order to develop a technology still in R & D to enable to go forward to a potential market,
* Venture Capital, also known as the Venture Capital (VC), which translates into a capital in innovative companies, being in the early stages of development and which have a high growth potential but also a very high risk,
* Capital development which is a capital contribution in companies with strong growth but at a more advanced level of development that target companies for venture capital, they are usually companies who have strong financing needs through equity,
* Capital reversal of investing in troubled companies to put in place a recovery plan.
Thursday, April 28, 2011
• The first step is, according to the objectives and motivations that have led to a project to refine its knowledge of the environment in which the company operates, with an approach also known as SWOT EMOFF (Environment / Strengths / Weaknesses / Threats / Opportunities) and requires gathering information about clients, competitors, suppliers, regulators, and the key skills and resources available to the company or must have.
• The second step is to refine the project in terms of Key Success Factors (CSF) and variables or fields of Strategic Actions (VAS).
• The third focuses on the means (technical, human and financial) necessary and action plans from which the Business Plan is the subject of a valuation, and financial economic quantification.
The document that materializes this research, this reflection, the choices that result, the main actions and associated resources is called Business Plan. It has 2 parts:
• The first part, called pitch, is devoted to the arguments needed to validate and sell his project. This part of nature "literary", must be rigorously prepared to highlight the economic consistency of the project.
• The second part corresponds to a financial overview of the measures and Covering the project's economic viability.
Starting a business is not only starting a business alone, it involves raising funds, developing an business activity, diversifying it, transmitting , merging, adjusting, developing, negotiating and communicating your dream business. There are many reasons for embarking on the adventure of developing a business plan.
Creating a project is not only the record of business plan alone but it also includes a financial component and a pitch.
As for investment, in financial terms, it can be defined as "sacrifice resources in hopes to draw more in the future," which indicates three key concepts: duration, cost and risk. Aspects profitability and financial flexibility are at the heart of the case. They underlie substantive issues such as: How to appreciate and take into account the reversibility of a project? Is there a business model in the business plan?
The financial calculations do not remain a simple decision support, and that beyond the virtues and pitfalls, advice and methodology presented in the Business Plan has many facets. And above all the business is a script of a wonderful story and which should be directed by the creator himself. It is the expression of a chosen strategy to be shared more or less detail, among its shareholders, bankers, employees and other stakeholders of the company if necessary.
Saturday, January 30, 2010
The main aim of any small business or a corporate company is to build a brand. Building a brand is of prime importance than making money in the business. Of course, everybody in the business is here to take profit from the business. But before taking a profit one should build the brand for their products. Without building a brand, taking out the profits will surely sustain for short term.
If you want to be in the business for long term, first build the brand and get the confidence and loyalty of the customers. Coco Cola and Pepsi, when they entered the Indian Market, for the first five years they spent lot of money in building the brand image. They never broke even for the first five years. Think of a Company which invested lot of money in one company and they never get paid for the investments for the first five years.
It may look ridiculous initially, but they have built a brand image in every household in India. From urban population to rural population in India, everybody knows these two brands. Initially, they started with their core business of beverages. But after having built the brand name, they have started introducing other food products also.
They have slowly entered the snacks market in India. First they penetrated the urban market and they slowly penetrated rural market also. Now the traditional snacks in india is being replaced by these snacks. Such was their brand image, which could even change the way of life in one country.
What Coke and Pepsi did in India is brand building. They did for the first five years and now they are reaping the benefit of brand building. You too, if you are interested in starting business, build the brand first, and then make profit out of it.
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