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IBDAKorea
Korea (South)
Korea (South)
Company Profile
| Company Contact | ||
|---|---|---|
| Name: | Mr. Raymond Kim | |
| E-mail: | Send Message | |
| Mobile Number: | ||
| Phone Number: | ||
| Address: | Seoul, Seoul Korea (South) | |
| Average User Review | There is no review for this company - Write a review | |
| Registration Date: | Jul. 22, 2012 | |
| Last Updated: | Jul. 22, 2012 | |
| Business Nature: | Service of Business Services category | |
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| Company Brief | ||
Business Plan Creator 1. Plan For Success Capitalizing your business is a full time endeavor. Developing your business plan is the single most important step you can take toward ensuring your success. To maximize your potential for receiving capital, it is crucial that you develop a business plan to guide your company; in addition, it will allow others to visualize where you are going and how you plan to get there. Take great care in preparing your plan. This will guide your investor or lender in making decisions to provide you with capital. A factor in preparing your plan depends on what kind of financial source you are targeting. Lenders are mostly concerned with whether you can repay your debt, while investors are more interested in how much your company can grow. Certain items of information are important for both lenders and investors which must be disclosed at the very beginning. Executive Summary This summary is an overview description of your product or service, its market, your niche, the management, the mission, company structure, pro forma highlights, funding request, use of funds and proposed terms. Be sure to summarize in less than two pages-the initial process is to get them engaged and to keep their engagement. History Your reader needs a summary of how this project came to be. Where did the idea come from? How did it evolve? Who is responsible? Be concise, but provide essential items such as dates, places, and background. Paint a short picture from where you started to where you are today. Mission Statement This is one sentence defining what the company is about. Establish your motives and your goals here. Stage Identify at what stage of funding you are. Is your business start-up, initial growth, positioning for going public, seeking a strategic partner, looking for near future acquisition or sale? Market Niche It is important for any funding source to know where you fit in the economic cycle. What niche is your business exploiting that will make it beat your competition? What are you doing that is better, faster, or newer than what everyone else is doing? For this part, you must provide more detailed information specifying how your firm will succeed. The investors know nothing about your business, so you must anticipate every unclear point and provide as much information as you can. You must prove to them you know what you are doing or are about to do. Market Research This is your--or a third party' s--research supporting your argument that there is a market and a need for your product or service. This will form the basis of support for price points and revenue assumptions contained in your pro forma projections, indicating to investors or lenders how your company can turn a substantial profit. Financial Overview Here is where you briefly highlight, chart and preview your outstanding financial projections. This provides a glimpse into where your gross sales, net income, net worth, etc. should be in years one , two and three. This is only an overview, and should contain no details or in-depth information. Such materials will come later in your financial pro forma section. 2. Factors Funding Sources want to know with whom they are dealing. Certain issues become very important: what are the qualifications, experience, goals--and, most of all, the character--of those in the management of this venture? Personal Lenders and investors are both concerned with whether or not you have what it takes to be successful. In this section, highlight information demonstrating your ability to make this business a success. Detail your education, past successes or failures that made you stronger. Indicate how you started this business and what makes you believe it will be a success. Character Character is not only about winning. It' s about getting up again and again when you' ve been knocked down. Character is, overall, staying power. Establish your strengths here. Management Good management is essential. Funding sources desire to see that you understand your market and have the skills to succeed. Are you a stand-alone player, or are there others helping you? If alone, do you plan to keep it that way? Who will comprise your management team? Give detailed resumes of all those involved, along with a description of the vital roles they will play in the company' s success. If your management skills or your team is weak, build it up in order to ensure your own success, as well as the success of your funding request. Third Party Professionals Carefully seek out and select professionals who can help you. Do your homework in advance of your need to avoid delays in your application. These legal, financial, tax, marketing, and other professionals may be willing to advise your company for a piece of the company or they can act as consultants once you have the money to pay them. Survivorship What plans have you made to ensure your business will continue to survive without you? Have you trained someone to take over? Is there going to be a plan in case of illness, disability or death? Without you, can the business continue to survive? Describe how your management team will be able to handle this plan. 3. Strategic Position In your plan, assume that your reader knows nothing. Even if you know they are experts, remember that the lenders or investors want to see that you know more about the industry and your market than they do. Market Overview * General industry definition * Current size and demand * Potential target market * Potential market growth * Market share of competitors * Industry technical evaluation * Industry direction * Industry condition Market Approach * Initial plan to obtain market share * Resources available or allocated to market penetration * Clearly defined, long-range market strategy * Support your assumptions on your ability to hold market share Product Protection What measures have you taken or will you take to insure the proprietary nature of your product? Patents, trademarks, copyrights, trade secrets, proprietary contracts, among others. Commercial Appraisal Look for outside opinions on the commercial prospects of your product or service. There are numerous low-cost or no-cost organizations--such as retired executives or small business network groups--with whom you can discuss your ideas. 4. Market Strategy Businesses do not plan to fail; they fail to plan. Have a clear strategy of where you want to go and how you are going to get there. Support your proposals with complete information and analysis. Market Position What kind of public image do you have? Are you inexpensive, exclusive, customer-service oriented, high quality, convenience, or fast? Highlight these qualities in this section. 5. Setting Goals Establish your long and short-term goals here. This will aid your potential funding source to understand your vision of company growth. Benchmarks/ Milestones These are critical development stages the company has set to meet. Without these visible and obtainable milestones your company and your investors may lose their way. What are the first ten priority items to be accomplished as soon as your company obtains funding? How long should it take to complete them? This is a view into the near future. Provide success points at different times. Use annual information to be your basis. Define levels of your projected success that must be obtained in order to allow your pro forma projections to come true. Establish in writing obtainable goals that will show your investors how you plan to keep the company on track. Long Term Lenders and investors don' t necessarily share your company vision. This is the concrete vision which will support your pro forma projections for the next five years. Exit Strategy Funding sources want to know how you plan to pay them back. Will the business generate a cash flow large enough to support the debt? Is the product or service in such great demand that the company will go public? These and other questions will not only help determine your success, but they will also narrow your search for the lender most likely to fund your request. Personal While your personal goals may not matter to your potential lenders or investors, they do matter to you and your company. Deciding to be an entrepreneur can have great effects on your life and the lives of those around you. Establish your personal goals in the same way you are writing this business plan. Take the time to find out what your business associates expect of you. 6. Competition Know and understand your competition. Complementary Products Demonstrate that you have investigated other companies offering competitive or related products or services. Identify those who offer complementary products in the same or similar industries. Explain how competitive relationships can be turned into joint ventures, strategic partnerships, buyouts, acquisitions, or other opportunities in the future. Lenders or investors take comfort in the fact that you have defined possible exit solutions if things don' t go precisely as planned. Trade Associations Identify all trade associations that are related to your industry. Use material supplied by these organizations to support statements and assumptions you have made throughout your funding request. List the trade associations that service your industry: 7. Amount Requested Conservative Request It is extremely important that your financial projections fully support the amount of funds you seek. If you are seeking debt financing, your request must be very specific. Lenders do not appreciate you returning for further funding owing to your having underestimated your needs. Investors may not be inclined to keep your management team in place if you can' t make the projected funding structure work. Downside Planning Take time to plan for the downside. It is far better to overestimate your capital requirements than to run short and be forced to request more capital. Supportable Assumptions Both lenders and investors want to know that you have reasonably estimated and supported your costs and projected revenues. Your financial pro forma should include detailed information and trade references on the costs of each expense you list. Association Documentation In your income projections, be sure to include trade industry support information or other market information that lends credibility to the conclusions you have drawn. Most associations publish reports of standard industry costs, margins and financial ratios which you can use for this purpose. 8. The Terms Know what you want, what you can afford, and what you will--and will not--give up. How Long? This should be based on your financial pro forma or the useful life of the asset being financed. Receivable and contract financing are less than 12 months--equipment normally one to five years--real estate and other long term assets 5 to 20 years. Amortized versus interest only Most ventures take some time to begin making money. New equipment or other acquired assets take time to begin paying for themselves. Consider an initial period of interest only or skip payments to offset your lack of cash flow. Interest Rate The rate you pay for the funds you need can directly affect your profitability. At the same time, however, if by paying 50% interest, you yield 100% profitability, you are way ahead of where you began. Fixed or Adjustable With a fixed rate of interest you know where you are. With adjustable rates, you' re betting on the future. Normal is the prime rate plus one to three percent or LIBOR ( London Index) plus three to five percent. Rates vary as you add or subtract risk. Points and Fees Most, if not all, funding sources charge points ( percentage of amount funded) and fees ( costs of putting your transaction together) . These can run from 1% to 10% depending on what you' re looking for and the level of risk. Fees are sometimes payable 50% at commitment and 50% at closing. Try to get 100% at closing or at least deposit the 50% into a trust or escrow account. Beware of sources who must have your money before you see theirs. Prepayment Penalties Funding sources spend time, energy and money picking deals to invest in. Once they lend or invest, they want to stick with it. Pre-payment penalties are one way they insure you will leave the funds in place. Try to negotiate these away, or limit them to one or two years. Blanket & Specific Liens Blanket means " all " . Specific is just that. Blanket liens will restrict your ability to raise cash in the future. Always attempt to have specific liens. Personal Guarantees How committed are you? If you won' t sign personally, then you may not obtain your funding. This is a way to check how you really feel about your project. If you don' t believe in your success, why should anyone else? As you and your company meet expectations, you should be able to get these released. Covenants & Conditions Be very careful in this stage. These determine exactly what you can and cannot do. Things so look out for in this phase include no management or ownership change options, quarterly filing requirements, no borrowing from anyone else, deposits maintained, collateral pledges, among others. % Ownership You Will Offer What' s fair? Whatever you determine, you must define, support, and defend it. While most lenders won' t ask, most investors will demand. Be prepared from the start. Stock Repurchase Agreements Try to negotiate escape clauses that will allow you a way out if you need it or can afford it. Be able to buy your stock back at a predetermined price, if possible. Management Controls Most entrepreneurs are in business to make decisions for themselves. Some investors want a partnership. Once again, pre-plan and know what you are looking for and what you are willing to give up. 9. Fund Use Entrepreneurs tend to spend too much time looking for money and not enough time making money. This problem stems from the lack of adequate pre-planning given to the initial use of funds. In order to determine what your short and long term capital needs are going to be, you must perform accurate financial projections. The cash flow model is the best tool for determining what your capital needs will be. Don' t be overly optimistic or conservative; both of these will hurt you. Know what factors will affect your projections to the downside ( sales, costs, price breaks, among others) . Work closely with third parties, financial advisors, accountants, industry consultants, retired executives, and other trusted advisors to keep from having tunnel vision and missing the big picture. Your cash flow model should be calculated on a month-to-month basis for one year and on a quarterly basis for the next four years. 10. Repayment Plan Repayment is tied directly to your success. In order to repay your funding source, you must clearly define how you are going to make money and how much money you are going to make. R& D Requirements How much research and development remains before you can enter the market? Does your product require regulatory approval? What is your timetable? What delays are foreseeable that could affect your timetable? Are there any alternative plans if tests, approvals, patents, licenses, or other processes don' t go as planned? Break Even Analysis Exactly where is it? Must you sell 10, 000 widgets? More? How will price breaks effect you? Can your salespeople survive on your commission structure? What about material price increases? Here is where you are going to demonstrate that you understand your product, its market, its costs and your industry. Current or Projected Debt Coverage Ratio Remember: 1.25 to 1. Your net income should be 1.25 times higher than the debt payment you are proposing to take on. For lenders, if your net income is below 1.25 to 1, it may mean no loan, a higher rate or more collateral. This determines your ability to service debt. Hopefully you have analyzed your debt coverage ratio and found it to be much higher. If it' s not, this leaves a pretty slim margin for error. Investors--because there is no debt-- are concerned with profit margins and retained earnings. The projections should support ratios of better than 2.0 to 1 to generate any serious investor interest. Amortization or Dividend * Return on investment These are terms that all funding sources want to know. If they give you the money, what do you project your timetable to be for them to get their investment back? When does the return on the investment start? Pre-Planning Always try to arrange for funding when you don' t need it. Entrepreneurs are famous for seeking capital in a crisis. When your need is great--payroll, taxes, sales drop, or other problem--rates always seem to go up or you can' t find capital at all. Do your best to forecast your capital requirements at least six months in advance. 11. Pro Forma Financials Projection Information Being able to present a clear, concise, logical and supportable financial projection is probably the most important key to having a chance of obtaining the capital you desire. If you don' t have the ability to make a financial forecast, hire someone who does. Have your pro forma give a month by month breakdown for the first year, then annually for the next four years. Include and fully support: * Sales Estimates * Administrative Costs * Production Costs * Sales Costs * Capital Expenditures * Gross Margin by Product Line * Sales Increase by Product Line * Interest Rates on Debts * Income Tax Rate * Accounts Receivable Collection Plan * Accounts Payable Schedule * Inventory Turnover * Depreciation Schedules * Usefulness of Assets Income statements ( profit & loss) Income projections enable the owner/ manager to develop a preview of the amount of income generated each month and for the fiscal year, based on reasonable predictions of monthly levels of sales, costs and expenses. 1. Total Net Sales ( Revenues) This is the total number of units of products or services you realistically expect to sell each month in each department at the prices you expect to get. Use this step to create the projections to review your pricing practices. What returns, allowances and markdowns can be expected? 2. Costs of Sales The key to accurately calculating your cost of sales is not to overlook any costs that you incur. Calculate the cost of all products and services used to determine total net sales. Where inventory is involved, remember transportation costs and any direct labor. 3. Gross Profit Subtract the total cost of sales from the total net sales to obtain gross profit. 4. Gross Profit Margin The gross profit is expressed as a percentage of total sales ( revenues) . It is calculated by dividing gross profits by total net sales. 5. Controllable Expenses * Salary expenses--Base pay plus overtime. * Payroll expenses--Include paid vacations, sick leave, health insurance, unemployment insurance and social security taxes ( employer contribution) . * Outside services--Include costs of subcontracts, overflow work and special or one-time services. * Supplies--Services and items purchased for use in the business. * Repair and maintenance--Regular maintenance and repair, including periodic large expenditures such as painting. * Advertising--Include desired sales volume and classified directory advertising expenses. * Car delivery and travel--Include charges if personal car is used in business, including parking, tools, and buying trips. * Accounting and legal--Outside professional services. * Dues and subscriptions. * Utilities. 6. Fixed Expenses * Rent--List only real estate used in business. * Depreciation--Amortization of capital assets. * Insurance--Fire or liability on property or products. Include labor contribution. * Loan repayments--Interest on outstanding loans. * Licenses and permits. * Miscellaneous--Unspecified, small expenditures without separate accounts. 12. Type of Capital Desired It' s easier to find something when you know what you are looking for and where it might be. Debt Versus Equity Debt funding is normally cheaper and easier to find than equity funding. Debt typically carries the burden of monthly payments, whether or not you have positive cash flow. Equity investors expect little or no return in the early stages, but require much more extensive reporting as to the company' s progress. They have invested a great deal of money and effort in your venture; investors anticipate that goals and milestones will be met. Debt financing is usually available to all types of businesses. Equity financing is generally restricted to businesses with fast and very high growth potential. Debt Considerations * For what type of debt financing can my company qualify? * How much debt can I afford? * Can I handle the payments if cash flow stops? * What happens if interest rates rise? * Am I willing to pledge company and personal assets? * What about my personal guarantee? Debt lending is more analytical than personal. Are your ratios right? Do you have the assets? Are you credit worthy? Equity Considerations * What type of investors do I target? * Am I willing to share control and future profits? * Do I really want my investors as partners forever? * How big of a share of the company am I willing to give up? * Will I be able to keep up with all the required reports? * What about disclosing company secrets to potential investors? Investors will want to take a much larger share of a start-up venture than they will of a company with a two- or three-year track record of success. Nominal Investors Nominal investors are individual private investors who make up a large portion of " informal " venture capital. These investors usually keep their money close to home ( within 50 miles or so of their physical location) . They tend to invest small amounts ( $ 25, 000 to $ 250, 000) , and they can be difficult to locate because they usually don' t belong to networks or trade associations. Nominal investors are found among friends, family, customers, third party professionals, suppliers, brokers and competitors. For the most part, once they invest in two or three deals they are out of money. There are a few private investor locating services out there. Beware of those who charge large ( $ 1, 000 or more) advance fees in order to put you in touch the an investor. Venture Capital Venture capital is extremely hard to get and the competition is fierce; they seek high returns. These funding sources get thousands of requests each year and only invest in two or three. The managers who invest these funds are great at finding oysters that will produce pearls. They usually are very bright, well educated and extremely arrogant. Tread lightly here; if you can go in another direction, do. Joint Ventures/ Strategic Partnerships This is where two companies with parallel interests get together based on their mutual needs: * They have the money/ you have the plan. * You have the product/ they have the distributors. Do your homework. Seek out companies with parallel interests to your own. This requires much more research than simply asking for a loan. Most of these partners will settle for 20% to 40% equity in your company. Be careful to protect your ideas by having any potential partners sign a non-circumvention document. Commercial Paper This is a short term debt instrument typically issued from 2 to 270 days. An issue is normally a promissory note that is unsecured and discounted from its face value. The issue is usually backed by a letter of credit or some other from of credit guarantee. The company may pledge assets to obtain a credit guarantee which is then leveraged into an issue of commercial paper. Letters of Credit Issued to your funding source on your behalf as a guarantee that you will pay. If you don' t pay, the issuer does. Your bank might issue the L/ C based on your pledge of a receivable or other hard asset. Receivable Factoring An age old method of financing. Funds are advanced against goods sold, accepted and not yet paid for. Normal advances on accounts receivable are 80% to 90% . Lenders are looking for ninety ( 90) days or less to be paid. Funding is available for older accounts receivable, but the rates take a dramatic turn upwards. Purchase Order Advances This involves leveraging your future. If you have purchase orders with your customer base, you may be able to get advances towards their completion. The typical advance is less than 50% , and the rates are very high. Don' t choose this one unless there' s no other way. Equipment Leasing You can think of this as renting assets. You gain the capital equipment you need and agree to pay rent for a specific period of time. There is no interest rate here, but the rates tend to be higher than commercial loans. Some of that is offset by being able to expense 100% the payments ( pretax) . Check with your tax accountant to be sure. Asset Sale Lease-Backs If you are cash poor and asset heavy, this may work for you. Here you are selling your asset for cash to a funding source who leases it back to you ( typically with a lease end purchase option) . The downside of this approach may be capital gains or sales tax. Private Placements A do-it-yourself stock offering. This is a great way to raise small amounts of capital ( $ 500, 000 or less) with a few investors ( typically less than 35) . Public Offerings Forms of stock offerings that let you raise more money and have more investors than private placements. These are great vehicles if you take the time to figure them out. Limited Partnerships You can look for one or form your own. Limited partnerships usually exist for the purpose of investing. The general partner has all the exposure and management duties, while the limited partners have put up all the money. There are numerous Limited Partnerships out there that have been formed to invest in businesses. Convertible Debt This is normally a loan than can be converted ( at the lender' s option) into an ownership position in the company. These are most common with seed or start-up funding where the lender would like a piece of the company in the event you become a tremendous success. Bonds Bonds are usually designed as debt instruments, where the company issues the bond and a bank underwrites and syndicates the issue. Lines of Credit This is a revolving account that is continuous in its nature. The funds are available as draw downs against the total line. These types of accounts are most commonly secured with accounts receivable and inventory as collateral. This covers the major types of business financing. There are numerous creative ways to finance your business. If one of those comes your way, take a moment to investigate it. You can never know too much about capitalizing your business. 13. Negotiation Most entrepreneurs approach the issue of negotiating with great stress and anxiety. This leads directly to weak negotiations or becoming defensive about being asked too many questions. Make sure you have clearly defined what you are looking for before the negotiations begin, and * Determine which points are worth fighting for. * Express your objections and questions to any point. * Get it in writing, leave nothing to verbal agreements. * Subject everything to your long range goals. * Pay close attention to what triggers default. * Establish ceilings and caps. You don' t want to be stuck paying huge payments if rates go up. * Plan for the downside. Attempt to have an " interest only " clause or " skip payment " provision in the event of slow downs. * Look for no pre-payment penalty or the right to buy back your stock at a fixed price. * Pay attention to covenants, conditions, ratios, restrictions or other clauses which can have serious long term effects. * Try to minimize pledging collateral. You may need those assets in the future to raise additional capital. * Seek professional counsel before you sign anything. Lawyers and accountants may not help you fund your deal, but they can help you spot the small details that may burden you down the road. | ||
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