Venture Archives - BOLLYWOOD SURKHIYAN

Venture Capital – And Other Funding Options For Your Business

When is the right time to consider VC or Private Equity for your enterprise? Initially every entrepreneur needs to first see if they have exhausted all other options first. Typically, a company would be low on equity when considering private investors. There are however multiple sources of equity capital, including, Friends & Family, Business Angels, VC’s, Corporate/Strategic Investors, Private Equity companies or The Entrepreneur’s own capital.

For those seeking capital of $500k+ look for VC. For smaller investments, entrepreneurs should seek a Business Angel or Debt Capital. An understanding of the different types of funding stages is therefore useful so see below.

Pre-seed funding is funding that is needed prior to physically construct the enterprise. Usually this funding goes to putting together a good business plan that can impress potential investors.

Seed funding is funding that is required to start building the company. It is possible that some companies could if appropriate skip this funding phase, but seed capital is usually the capital that is required to get the basics for a start-up. Usually at seed stage, a company is not yet ready to open for business, and this funding is usually used to rent office space, real estate, equipment needed to produce the company’s product or service

Seed funding is less commonly invested by VC’s and is not necessarily a large amount of funding. Seed funding can range from $100k-$500k. Rarely does it exceed $1m. Seed capital can also be raised from a Business Angel, Friends and Family or the Entrepreneur’s own funds. Only 15% to 25% of VC’s invest in seed funding.

Early stage funding is usually where VC is sought. A company is usually ready to trade but requires additional capital for salaries.

Later stage funding is also known as expansion/growth stage funding is for companies who are doing well and are seeking to expand.

There are numerous ways that entrepreneurs raise seed capital to get started. These conventional ways include raising debt capital from a business lender, merchant bank or angel investor who are willing to invest seed capital into the business. Other more ingenious entrepreneurs raise seed capital through raising debt capital, sweat equity and funding from friends and family. VC is usually raised with early stage funding, i.e. as above, series A or series B funding. In most cases, VC’s will not invest less than $1 million in a company.

Understand these and you will be off to a good start and be taken seriously.

Venture Capitalism and Enterprise Revolution in Nigeria

The African Capital Alliance (ACA), a private equity fund manager in western Africa, announced the raising of $200 million from investors in July last year. The third installment of the Capital Alliance Private Equity (CAPE) fund will target important sectors such as power, oil and gas, communications and financial services in Nigeria and across the sub-Saharan region. The ACA is confident of eventually raising a total of $350 million for the fund from aid agencies, international banks and Nigerian institutional investors. The development reflects mounting confidence in Nigeria’s resurgent economy, considering the country’s fist such fund that started out in 1998 with a capital of just $35 million.

While there is no conclusive data on the size of the Nigeria equity market, estimates for the whole of Africa put it over $6 billion in 2000; South Africa, the continent’s largest economy, accounting for half the share. High economic growth fuelled by an enthusiastic reforms programme has seen Nigeria’s growth scale to almost double the figure for developed markets in recent years. The country’s GDP growth rate in 2006 stood at 5.6%, significantly higher than the US (3.2%) or the UK (2.8%)1. Although the private equity market is still in its infancy here, increasing opportunities to invest in high-growth businesses have succeeded to some extent in eroding the conventional insistence on public equity and debt. However, there continue to be significant risks attending investment in Nigeria due to unhealthy policies, a volatile security situation and massive infrastructure shortfalls. Much of this holds true for the continent at large and explains why it receives only a fragment of global foreign direct investment (FDI). Out of the estimated $250 billion in global FDI to developing countries in 2001, Africa received only $11 billion2.

For many international investors, venture capital and private equity in Nigeria are risky propositions because of political instability, violence, social unrest and corruption. Progress in this direction has been impeded by several other reasons as well:

* Poor corporate governance and lax regulatory mechanisms.

* Red tape, legal restrictions and hostile investment policies.

* High trading costs in the primary market for equities.

* Market volatility and the resulting high-risk perception.

* High exit risk for investors because of low liquidity.

* Difficult and often confusing ownership and property rights.

Over the last decade, Nigeria has displayed a steady commitment to reforms. The Investment and Securities Decree was passed into law soon after the return of civilian rule in 1999, opening up the economy to foreign investment. The government of former president Obasanjo also established the Investment and Securities Tribunal for speedy resolution of disputes arising out of investment deals. More recently, the Securities and Exchange Commission slashed transaction rates for equities from 6.9% to 4.2%. International venture capital investors have shown increasing interest in Nigeria after the liberalisation of several important markets like telecommunications, transport, and oil marketing. The fact that fresh policies have persuaded at least some investors to overlook the high cost of doing business in Nigeria is a significant achievement in itself.

Its large population and market size bestow tremendous potential on the Nigeria economy – Africa’s third largest and among the most rapidly growing. The country’s ambitious Vision 2020 programme and the UN Millennium Development Goals together represent considerable challenges in terms of economic revival. Past experience favours strongly against big businesses, which have had a dismal track record and a high-failure rate under both private and public operation. Undeniably, the fate of Nigeria’s long term goals rests on rapid proliferation of SMEs and their ability to drive an enterprise revolution that will sufficiently diversify the economy away from oil and reverse decades of stagnation. The objective is to use SMEs to deliver sustainable development, employment creation and most importantly, poverty alleviation.

This is where venture capitalism derives its significance in the context of Nigeria’s long-term ambitions. Private equity investment has been responsible for some of the most notable economic success stories across the globe. Entrepreneurs starting out with angel loans turned India around into the largest software exporter in the world. In South Korea, booming small high-tech businesses bypassed larger firms to lead the country’s recovery from the Asian economic crisis. Equity funded enterprises have likewise recorded high growth figures in developing countries from Asia, across Europe and in South America. The global experience with venture capitalism throws up a number of important considerations in terms of providing the right environment for rapid growth. The following are some of the most important challenges and considerations facing Nigerian policy makers in this regard:

* Establishing a venture capital technical assistance programme to enhance SME performance in diverse economic sectors.

* Institutionalising tax benefits for equity investment to attract foreign investors.

* Providing risk guarantees to create strategic venture capital industries that improve self reliance and curb import quotas.

* Enhancing venture capital capacity to stimulate and promote the industrial expansion.

* Focusing equity investment on SMEs that optimise resource utilisation and assist local raw material development.

* Promoting innovative business ideas, processes and techniques that boost both productivity and profitability.

* Hastening industrialisation through equity infusion in high-growth areas like telecommunications and tourism.

Nigeria’s reforms process prompted a unique voluntary initiative at the turn of the last century when the Nigerian Bankers’ Committee launched the Small and Medium Enterprise Equity (SMEEIS) scheme. Billed as an attempt to promote entrepreneurial expansion, the scheme required all locally operating commercial banks to earmark 10% of pre-tax profits for equity investment in small and medium enterprises. Even though more than Naira 18 billion had been set aside by 2003, utilisation of the funds remained abysmally poor at less than 25%. The Nigerian Central Bank owed it to a lack of viable projects and general reluctance toward equity partnership. If poor managerial and business packaging skills are areas of concern, the prevailing mindset against venture capitalism in both existing and emerging enterprises is even more so.

To quote former Central Bank governor Joseph Sanusi (29 May 1999-29 May 2004), accelerated economic development is not possible until Nigerian entrepreneurs learn to appreciate that “it is better to own 10% of a successful and profitable business than to own 100% of a moribund business”.

Ways to Raise Venture Capital to Start a New Business

Centuries back there was a time when people used to exchange goods for their livelihood and there was no money to buy things, known by the name of, “Barter System”. There was no buying or selling during those days. If you want “Wheat” and you had “Pulses” you could very well exchange the same with the vendor who had “Wheat” by negotiating a deal with him for exchange.

Then came an era when people starting working for others to earn money to run their livelihood. This further developed into Jobs from Government and Private Sector.

Now is the time when everyone enchants to open his own venture owing to establish something of his own and develop an empire which manifolds into a profitable venture as said “The Best income is even when you are sleeping the investment grows”.

An Idea of yours in today’s scenario can create a ripple effect which can change the lives of many. Very live examples are organisation like Facebook, Whatsapp, Google which started with a very small idea and from a room and have created an empire which inspires the Entrepreneur’s to create a Value Addition not only for them through Profit but for the Society too.

Many Starts up have started mushrooming in India now with many business ideas but they lack the rock bottom things and fail even though the business idea is too great. Inspite of the fact that they have best of people, knowledge, resources, ideas available to them but still they have tumbled. Very Live Example is Organisation like Snapdeal etc.

An Idea Flourishes when you have the Business Idea pitched to the Right People with Right Knowledge with effective and strong persuasion skills to invest money with the returns they would be getting. Firstly the Entreprenuer himself needs to be convinced that it is a great and a profitable Venture.

Second Important Thing which Start up lack is Hiring the Right and Suitable Candidates. Branding Institutes like IIM /IITs do bring in good resources but they cost very heavily to the organisation. Its always essential to hire people with experience rather than branding institutes. Experience people turn around organisation as they know how to manage crisis, success of an idea comes with experience and experience comes with learning, you know how to turn failures as these people have already experienced it.

Maintain Low Cost and Invest heavily in your people is the Right Idea for the Start ups.

Wanna Know do get in touch with me at gaggan_sahni@hotmail.com

How to Calculate Liquidation Preference in a Startup Business Venture Capital Financing Term Sheet

What is liquidation preference?

Liquidation preference refers to preferred shareholders’ rights to receive a certain amount for the preferred shares they hold in preference to common shareholders in the event that the company goes into liquidation.

The scope of liquidation preference varies between different term sheets. Some may be extremely favorable to investors, some may be less. However, the purpose of liquidation preference is such that in the event a company goes into liquidation, preferred shareholders will always get something back for their preferred shares before common shareholders get anything. In other words, they will always get more than common shareholders. It is possible that common shareholders will get nothing if the company does not even have enough assets to settle the preference amount.

Example A:

Venture Tech Ltd. has 5,000,000 common shares outstanding.

In a Series A financing, Investors A invests $2,000,000 in return for 2,500,000 Series A Preferred Shares (i.e., purchase price per share = $0.8).

The term sheet of this Series A round provides that:

In the event of a liquidation event, the preferred shareholders will be entitled to receive in preference to common shareholders an amount equal to 2 times the purchase price per share, plus declared and unpaid dividends (the “Initial Payment”). After the Initial Payment has been made in full, any assets remaining shall be distributed to the preferred shareholders (on an as-converted basis) and common shareholders on a pro rata basis.

NOW, Venture Tech Ltd. goes into liquidation and the sale price is US$6 million.

Assuming no declared and unpaid dividends, and all other senior debts, e.g., employees’ wages, secured debts, etc., have all been settled:

How much will the preferred shareholders get?

They first get US$0.8 x 2 = US$1.6 for every preferred shares they hold.

Therefore, the Initial Payment is US$1.6 x 2.5 million = US$4 million.

This gives US$2 million ($6 – $4 million) remaining, which shall be distributed to the preferred shareholders and common shareholders on a pro rata basis.

Therefore, preferred shareholders will get a further US$2 million x 2.5 / 7.5 = US$666,666.

I.e., a total of US$4,666.666.

The common shareholders will get a total of US$2 million x 4 / 7.5 = US$1.333,333.

Total = US$4,666,666 + US$1,333,333 = US$6 million

Example B:

Following example A above, let’s say this time the sale price is US$10 million.

They will get a total of $4 million (the Initial Payment) + $6 million x 2.5 / 7.5 = $6 million

The common shareholders will get a total of $4 million.

Example C (company favored):

Let’s give it a twist. This time everything is the same as above except that the total amount the preferred shareholders will get for each preferred share they hold is capped at 4 times the purchase price per share.

In other words, they first get 2 times the purchase price per share in preference to common shareholders (i.e., the Initial Payment as in Example A and B). All remaining assets will then be distributed among them and common shareholders until the preferred shareholders have received 4 times the purchase price per share (plus unpaid but declared payment, and the Initial Payment). All remaining assets thereafter will be distributed among all common shareholders on a pro rata basis.

NOW, let’s do the math:

Putting aside the sale price, since the maximum total amount the preferred shareholders can get is capped at 4 times the purchase price per price, they in any event will get no more than 4 x $2 million = $8 million (however high the sale price may be).

What is the break even point for the sale price?

Let y be the break even sale price:

(y – 4) (2.5 / 7.5) = 8 – 4

y = 16

Therefore, the break even sale price is US$16 million.

Therefore, the sale price must be at least US$16 million for the preferred shareholders to get US$8 million. If the sale price exceeds US$16 million, they will still get only US8 million, since the maximum amount they can get is capped.

That’s why by setting a cap on the liquidation amount the preferred shareholders can get is company-favored.

How to Win the CBN/NYSC Annual Venture Prize Competition

This competition is an initiative of the CBN as part of its corporate social responsibility and in consonance with the principle of the National Economic Empowerment and Development Strategy (NEEDS). It is designed to unleash the entrepreneurial spirit of the youth corps members during their service year and to encourage them to imbibe entrepreneurial concepts and ideas. The Annual Venture Prize Competition is majorly aimed at reducing the dependence on white collar jobs which would stimulate economic growth, development of local technology and generation of employment.

It is open to only serving corps members in every batch of a given year. The Award is in two categories (State/National) and it covers all legal business concepts except commerce. Interested corpers are expected to submit a business proposal to the state level for critical examination by the state Inter-Agency Selection Committee where three winners usually emerge. The prize money for the state awards is;

– 1st Prize: N200,000.00

– 2nd Prize: N150,000.00

– 3rd Prize: N100,000.00

Ten best proposals from each Development Finance Office are sent to the Department and subjected to further examination by the National Selection Committee to select the national winners which has the following prize money tied to it.

– 1st Prize: N1,000,000.00

– 2nd Prize: N750,000.00

– 3rd Prize: N500,000.00

All winners will be given Certificates of Merit, linked to banks to sponsor their projects and invited to participate at a course at any of the Entrepreneurship Development Centers (EDCs).

Annual Venture Prize Competition draft procedure.

Identify a Need or Problem

For you to be a participant of this millionaire making award you must have a business concept or idea. There must be a need or market you are willing to satisfy. Your business idea might be innovative or an improvement on an existing concern which would add value to the life of the people.

Carryout an In-Depth Business Analysis

You must engage in a critical analysis of the business. The profitability, durability and legality of the business must be ascertained. You must have a good understanding of the proposed business.

Create a Marketable and Exceptional Business Plan/ Feasibility Report

After you have ascertained that the business idea is viable and profitable, compose a winning business plan. The plan must be written according to the statutory format. The format is as follows:

1. Business Plan and Corporate Directive ( Vision, Mission and Objectives, etc)

2. Operational Strategies ( Uniqueness of the Organization)

3. Strategic Plan and Objectives

4. Projected Outreach, Market Share and Marketing Strategy

5. Financial Projection/ Strategy

6. Sustainability Strategy

7. SWOT Analysis

8. Risk Identification and Mitigation Strategies

9. Economic and Social Justification – Business Benefits to the Society

10. Environmental/ Infrastructural Analysis (Assessment of the likely Impact of Environmental Factors of the Proposal)

11. Management Structure, etc.

Your business plan is your representative. You will not be there when it will be examined. In fact, your passport to the award process is your feasibility report. Therefore you must ensure that you business plan is outstanding.

If you don’t know how to write one, contact someone that is fully skilful in writing business plans. If you are hiring a professional to assist you in writing the plan, ensure that you are part of the preparation process. That is; be part of the preparation process. This is to enable you learn and understand everything in the report.

It is not advisable to hire a professional that is far from you. This is true because, he will just give you a finished work without educating you. You might be asked to defend the proposal before the Committee.

You can also make your business plan unique by adding pictures, PowerPoint slides and audiovisual CDs to make your business points clearer.

Submit Proposal

Ensure you submit your proposal within the stipulated time. It should be submitted to either the Head, Development Finance Office, in the branch of the CBN in the state of service or to the Director, Development Finance Department, Central Bank of Nigeria, Corporate Headquarters, Abuja. Also ensure that the proposal carry your NYSC call-up number, contact address and phone number. Make sure you follow-up the proposal by visiting the Committee office to get information. You must also listen to daily news and read current dailies to get new hints as regards to the Annual Prize Competition.

Components of a Winning Proposal

– The business starting capital must be from one hundred thousand to a million naira: Given that the lowest prize money is N 100,000.00 and the highest is N1, 000,000.00 let your business be the type that can be started with the minimum of the least prize money and the maximum of the highest prize.

– The business must be legal: There are businesses that are illegal in Nigeria. Ensure you go to Corporate Affairs Commission to get the full lists of legal business. Also there are some goods that are contraband in Nigeria.

– The business must be resident in Nigeria: The sole aim of this programme is to boast the economy of Nigeria and not foreign countries. Therefore, the business must be located in Nigeria.

– The business must have the tendency of employing Nigerian citizens: The business must have the capacity of employing you and other unemployed Nigerians

– You must prove that you will not abandon the business for a white collar job: This competition is solely for entrepreneurs. Consequently, if you have the intention of starting the business with the intention of abandoning it immediately you secure a white collar job, this programme is not for you. It is strictly for passionate entrepreneurs.

– You must prove that the business would be profitable. One of the goals of this initiative is to Stimulate economic growth. Therefore, the proposal must show that you business has the capacity of making profit.

– Your proposal will receive massive attention when it is geared towards using and develop local technology.

– This programme covers all business concepts except commerce. Commercial activities are very risky. Your business idea must not be to buy and sell of finished goods. Rather it should be able to produce better goods at a competitive price and time.

– The cost of your products must be competitive: Your goods or services must be exceptional but affordable.

– Your business idea must contain something good that your competitor are not doing or are not doing well.

– Your proposal will scale-through if your business is using locally produced raw materials

7 Tips for a Successful Business Venture

It is pretty easy to set up a new business but the actual challenge lies in surviving the cutthroat competition and to stimulate growth over the years. One of the prime reasons why most of the businesses face a very tough time is the lack of proper marketing plan and minimal focus on branding. After all, only when you are able to market your products properly to your target segment will you have a chance to generate revenue to take your business forward.

While a business success is largely dependent on concerted effort of various major functions, during the early years it is most important to focus on branding. Your branding effort should be strong enough not just to introduce your company name to your target segments but also create an impact on them. For a new business the marketing and branding strategy should ideally be able to establish its presence, create name recognition, build credibility among the target market segment and contribute to its status and reputation. Here are seven tips that would actually help you to achieve success with your new business.

Write Down Your Business Plan – This should be the first step. Probably the most common and biggest mistake that most entrepreneurs do is not creating a proper documentation of their business plan. We all know what we plan to do; yet it is important to write it down in a formal business plan. It is always easier to follow a written plan. Your business plan should contain your business description. Objectives, marketing strategy and budget, Business overview, facilities and infrastructure, description of products and service, Industry overview, Regulatory Issues, Implementation plan and financial plan.
Focus on your Branding – Do everything you can to promote your brand. Get a professionally designed logo that would justifiably represent your business to the people. Get your business cards, letterheads, brochure and marketing collaterals designed and printed by professional design and printing house. Ensure that your logo design is properly placed in all these. Don’t fall pray to those cheap DIY logo and branding solutions, they might save you a few $$ to start with but it would actually take a toll on your brand image.
Create a Web Presence – It is most crucial for every business, irrespective of its size, to have a website of its own. Most consumers do their initial research on the web before making a buying decision. It is important that they are able to find you at that stage. Also a website adds value to your brand and gives you an added medium to communicate with your customers. Get your website designed and developed by professional web developers. Your website should ideally be an extension to your brand and provide complimentary information to that of your brochures and print materials. Try to update your website often with useful information, this gives your visitors a reason to check back your website regularly.
Create an Advertising Strategy – Most business organizations invest in advertisements but often a business does not get the maximum ROI on its advertising spend because the advertising strategy is not effective or at times, there is even no fixed strategy. Make sure your advertisement is targeted specifically at your market; for example, if you are a local store, it doesn’t make sense for you to advertise on a global media, rather the local newspaper is a much better option for you. Be consistent in your advertising effort. The more your customers see your company ad, the deeper impact it creates on them. It has been observed that a 5-minute ad film served 10 times creates a greater impact on the consumer than a 50-minute ad film. For your ad composition, it is always advisable to consult a PR agency. If you are trying it yourself, ensure that your advertisement leaves your customers with a good reason to contact you and your brand and USP is properly presented.
Publicity is the Key – Yes, do whatever you can to put your business on the forefront. There are various things that you can do for publicity. Send out a press release announcing a Grand opening for your new business, with a short description of your products and services. Keep your press release short, error free and interesting. Write letters to the editors of local newspapers and magazines about your industry and product. Send out further press releases to communicate other business happenings. For example, if you win a business award, get membership to a professional organization, offer services to any charity or even if you are hiring an industry recognized for a key position in your business. Try writing articles and reviews for local publications and industry magazines. This would help to build your credibility as an expert and would add value to your business brand as well. The amount of trust people place on such experts is much more than what you can get by buying the best ad slots on top magazines.
Business Networking – Word of mouth is undoubtedly the best form of advertisement and the more you expand your business network, the more you can have such publicity. Try joining professional organizations in your industry; be a member of Chamber of Commerce; attend networking meets and special events that give you a chance to interact with more people. Volunteer to join a NGO, get associated with a charity organization, or school board. You will not only be paying back your community but also be putting yourself and your business in front of the public.
Measure, Analyze and Decide – These should actually be continuous processes in your business life cycle. You have laid out a business plan but this doesn’t mean you will be blindly following it. Measure the output that you are getting from all the efforts that you put into your business. See if it is more or less than what you projected. Analyze the reasons for any variance, whether positive or negative, and then use the result of this analysis to make educated decisions for the future. You need to keep in mind that you should not be too quick to judge anything. To get a decent understanding of your business processes, you should give them sufficient time to run, which will allow you to have enough data to perform a fruitful analysis.

Small Business Venture Capital Strategies

When launching a new small business, often the entrepreneur will consider venture capital as a source of funding. Here are 3 tips to ensure that venture capital funding can be secured when sending out your business plan:

Send your business plan to the right people

Venture capitalists tend to specialize in certain kinds of businesses. Some will specialize by industry, only investing in new energy companies, for instance, while others look for a certain size of company to invest in. It is worth doing the research to determine who the venture capital backers are for your industry, before you start sending out your business plan. Venture capitalists who are not specific to your industry can provide recommendations to make your plan more appealing to other venture capitalists. However, it would naturally be a mistake to send your plan to potential investors who will not even consider it.

Make sure your business has the potential to be profitable enough

Most venture capitalists look for a return of about 5-10 times their initial investment. For example, an investment in a company of $2 million should yield a return of $14-20 million after about five years. To satisfy these requirements, it is generally necessary to have a business which has the potential for a high rate of return on the amount invested. If the rate of return can reasonably be expected to be lower, such as for a clothing retailer, then it is probably better to look for an alternate source of funding, such as an investment or commercial bank.

Remember to include an exit strategy for your investor

Venture capitalists generally do not want to be involved with a new venture for an indefinite period of time. Most will plan to leave the new venture after about five years, so you should offer a clear explanation of how this may be achieved. There can be a variety of reasons for this; some venture capital managers require that the holdings periodically be sold off to acquire other offerings. Nonetheless, by demonstrating that you understand the limited time frame for many venture capitalists, you automatically make your plan more appealing than those which do not.

In summary, by sending your business plan to the right people, by recognizing what rate of return is necessary for venture capitalist involvement, and by including an exit strategy, you can improve your odds of securing venture capital funding for a new and growing business.

Catering Business Information – An Ideal Venture for You

Do you want to earn extra income? Then start a catering business now. Creating a catering business might not be too hard but it is definitely risky. Venturing in this kind of business needs your skills to capture the taste of countless people and discovering the fine art of preparing food. Like any other types of business, of course where you invest your hard earned money, you hope to make the business grow. It is indeed necessary that you got to be prepared and wise from the very beginning of the business venture. You cannot just go through the business venture lacking any preparations and knowledge of being a caterer.

There are some things that need to be considered in opening a catering business so that it will succeed in the long run. Besides hiring a caterer, you must device a business plan to be your guide. It would be better to put into writing the ideas which are playing in your mind the moment you think of opening a catering business. This business plan must include goals classified into short term and long term and also the activities and plans that you want to carry out.

The business plan must also have manpower, investment needed as the marketing initiatives. This will be your reference and guide in making your catering business successful. Whatever plans you have for the business, it would be of help if you include the feasibility and profitability of your plans. The initial cost should be taken into consideration before putting up the catering business. The costs include salaries for the chef and first few employees; cost for the utensils and the industrialized kitchen you will work with. The next thing to focus is the definite regulations and rules of the local health department.

It is important to check the local health department and check the regulations that apply to you. You might need to check out laws governing your business and might need to get permits. This might save you from any problems that may occur later on. It might be of help if you will hire an expert to manage legal matters. Aside from the business plan, marketing strategy is a must for the business. You must know how to capture the taste of the potential customers with no spending lavishly on the ingredients. It is also to think of ways on how to reach the target market. In addition, you have to make a way in keeping a good business relationship with them.

Word of mouth is one of the best ways to market and promote your catering business. Therefore, you have to make it a point to make a goof impression on every customer that comes to your business. Another thing to promote your business is through networking. Never miscalculate the power of having connections. Other people go for charity and volunteer works or organize fund raising events. Clients will come to your business and there is a possibility that they will be your regular customers. Printed coupons and flyers can also be effective in promoting your catering business. In the opening, discount can be given to the first few customers so they can become loyal customers.

In opening a catering business, one must be ready for all the risks since all business ventures come with risks so make sure to be well-prepared when starting your business. Being ready and prepared increase your opportunity of creating a profitable business. Business people know that it’s hard to gain potential customers but it is even harder to keep the loyal customers to continue and stay to support you. However, these risks can turn into something profitable as long as you have expert and friendly caterer and the business plan and marketing strategy are prepared well.

Tips for Starting Your Own Casino As a Business Venture

Casinos have been around for a very long time. Some businesses have buckled with the introduction of the Internet, but casinos seem to have thrived. This is because nothing beats the environment of gambling in a casino environment, even playing in the comfort of your own home.

Therefore, opening a casino is still a profitable business and you will have the opportunity to make a lot of money. If you think that you are interested in opening your own casino, you should read ahead for some ideas and how to go about opening the business.

Plan

Before you approach anyone concerning your idea, you should have a business plan clear in your head. You should be making a portfolio of your plans, especially if you need some investors.

You could even have some ideas about whether you want to buy a property and convert it into a casino, or have a building built from scratch so it will be tailor made for your plans. Both these options are expensive, so you need to have some start-up costs.

If you are not sure what you need to know to make the business plan, then you should do some research and even take a trip to Las Vegas and have a chat with the casino owners. Tell them that you want to build a casino in your area and they might be interested in investing.

If they have any franchise programs, you should give them some considerable thought because then you will be able to use their name and their equipment. There will already be a business image in place, which you can just use. This will be a lot less work, but you will not have any design input.

Investors

When you are in the position to show your plan to the investors, you need to be passionate about the idea and you should have a model, or a 3D drawing of the casino. You have to know what you are talking about because they will see through you if you don’t and then you will have failed before your idea has even got off the ground.

It might be a good idea to have some custom playing cards made with the name of the casino and the logo on them. This will give the investors the impression that you are extremely serious about your plans. They will be very impressed that you were proactive enough to have a pack of cards made.

Permits

Once you have the investors, it is time to apply for the permits. You will need building permits and a gaming license before you have even laid a brick. Do not start building unless you have the permits because they will knock the building down.

Also, do not play any games without a license because you will be liable to prosecution for gambling without a license.

Peripherals

Once everything is in place and construction has begun, it is time to buy all the peripheral items. This includes custom made cards, poker chips, gaming tables and even the interior design.

This is the time when you should be getting excited and thinking about your brand ideas and the image that you want for the casino. If you are that excited, you might even be thinking about building your next casino.

The future is bright for casino owners. People enjoy going to casinos and there will be people who go to casinos every single night because they like the social atmosphere, so start thinking about membership cards and loyalty programs.