Forums: Discussions for entrepreneurs and small business.

That sounds great but I don`t know where to go to find those guys. I know that if I am able to get the full amount that it would help my business get to the next level for greater income and paying the investment back plus interest could be done fairly quickly over the next few years. I have reached my full potential as the business currently is and if I take a vacation so does the business. I need to get to that next level to become more of a business owner rather than self-employed mode. I just don`t know where to go for that funding so I thought that someone would be interested in the residual income of their investment as a partner. Even if I didn`t offer the other services and continued to only do designs based on the clients I have now, when the market returns I expect to see around $200k-$300k of work coming in. I have no choice but change directions because there is no possible way I can do that much work myself.  If i add the marketing campaign in to the equation that amount could be much higher. Without the investment I stand to lose clients on slow turn around and close doors to other work. It would take me about two years to get the funds saved up myself and by that time too many missed opportunities will have came and gone.
Thanks!



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Jamie Compton
Jamie Compton Design Inc.

Jamie, you’re all over the place as far as structuring an investment in your design firm is concerned. First, of all Mark (the other Mark ?) made a valid point recommending to issue debt over equity to investors. Especially in times of economic uncertainty, debt is quite appealing in the eyes of investors because it (i) limits their risk and (ii) yields a guaranteed minimum financial return regardless of the company’s performance. Since I’m assuming that neither you nor the company has any collateral to secure these notes, you might want to look into issuing convertible debt or detached warrants along with your notes. This is often called a deal sweetener as it gives investors an opportunity to either convert their loan into equity at a certain point in time or buy shares at a certain price per share.

When it comes to putting a value on your company, do a simple discounted cash flow analysis instead of guessing. This is a rather simple method of valuing a company as it considers 2-3 years of historical free cash flow and 2-3 years of projected free cash flow. With other words the free cash, after taxes, that your company generates every year. This number is then linked to a certain discount factor based on industry and development stage, and reflects a very rough valuation of your business.

Another route to go is applying multiples to your annual earnings.

In any event, Mark (yes, again the other Mark) is spot on recommending that you be extremely careful. Corporate finance is no playing ground for the inexperienced and you could well loose your business or get sued by investors if you’re wrong. You may also get in trouble with regulators if your endeavors to get in touch with investors can be seen as a violation of state and federal securities laws. So, be extremely careful and invest a couple of bucks in having someone advise you on these matters.

I hope this helps.


Mark






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Jackson Steiner
http://www.JacksonSteiner.com

Advanced Document Design for entrepreneurs, intermediaries, and the financial services industry.
http://www.Publications.FastVentures.com

I have been receiving great advice and using it to restructure my business plan. I have also been getting some shady responses like the one above. I know it sounds like I am all over the place but really it is one business with services centered around that business that feed off each other rather than using other businesses. In my business plan I break down each service and show everything from costs of equipment still needed, overhead for that service (not including office and utilities), charges for the service, profit margin and how directly related it is to the main service which is designing homes. For example blueprint printing is broken down to costs to print per linear foot vs charge per linear foot matching the lowest area price. Then the relation to the design business would be that I will be changing all plan formats to the sizes requiring these over size printers to print. Speaking with my builders I found that all of them have these plans printed for each home they build anyway and said if I offered the service they would definately use me to save some time. They are spending $300-$400 per home to print the number of plans they need and they tell me they have to wait sometimes a week or more for the area printers to have them ready because they are so busy even in this slow housing market.

I believe it sounds like I`m all over the place because I am trying to tell of so much in such a little space and I don`t want to give up to much info. Honestly Mark, the suggestions you gave above is Greek to me. My knowledge is building and designing homes, I am trying to better educate myself in business as I go but have a long way to go when it comes to the areas of investment and corporate finance. I have tread very lightly until now and understand that I can`t grow anymore unless I explore new territories of business.

I have someone I know that lost a lot of money in the stock market investments he had that is thinking of getting out of the stock game. He lost 6 times the amount that I am needing and isn`t seeing what is left going anywhere for a long time. I am restructuring the offer by using the investment as a debt that I would pay back plus interest and he would also be given 10% ownership of the company and an equal share of the end of year profit to go toward the loan. Now the first half of the end of year profit would stay in the company each year as working capital. The second half would be taken out and divided equally between he and I.  Now because I am receiving a salary to live on I plan on using my share to put towards the debt of the investors investment. After the investment is repaid with interest the investment partner would continue to receive an equal share every year unless he decided to cash out and sell his 10% ownership back to the company. I have already been communicating with my accountant for his advice as I go and he said he would be sure that I don`t do anything that would get me in trouble.

What do you guys think?



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Jamie Compton
Jamie Compton Design Inc.

Isn`t it remarkable that "investors", especially out of the UK, seem to have a hard time with their English lately? On the other hand, by African standards it really isn`t all that bad.

Cheers mate!


Mark



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Jackson Steiner
http://www.JacksonSteiner.com

Advanced Document Design for entrepreneurs, intermediaries, and the financial services industry.
http://www.Publications.FastVentures.com

I noticed his posting has been removed. The first thing I did when I saw his posting was check his profile. He became a member that day and posted the same exact posting 7 times in 5 minutes. How convincing could he possibly be?  I have already seen so many of these guys already it`s not too hard to pick out most of them because they are so bad at what they do.  I have to laugh at most of them though, if your going to try and scam someone at least try to be more convincing by using proper grammar or even spell checking your postings LOL!


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Jamie Compton
Jamie Compton Design Inc.

Thanks for the information.
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