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Bill Gibson – Don’t Burn The School

Thursday, May 16th, 2013

How did you get to be where you are at and know what you know? Along with some good choices and lots of hard work and possibly a little luck along the way you also made errors, you made wrong choices, you experienced pain and frustration…in other words you had to experience growing up, you had to experience learning at school, you had to experience romance, relationships, addictions, and other lessons from business and life in general. You were not just told how to do it!

The fact that you and I have learned and possibly graduated from aspects of the “School Of Life” and at times the “School Of Hard Knocks” we still have no right to “Burn The School” and not let others experience and learn from some of the same schools.

In my opinion we need to be patient, kind, understanding and less judgemental with those who are following behind us trying to learn what we have learned. We all want others to not have to learn some of the painful lessons we have learned. It makes common sense and it is reasonable to teach, guide and mentor to help others, for example…like our children, relatives, friends, employees and associates…find an easier route and learn from us and our experiences. Although, there comes a time when we have to realize each and every one of them are also entitled to learn and find their own way by going through similar “Schools Of Life” and “Schools Of  Hard Knocks” that we have graduated from.

If we are honest with ourselves, we know that some of our greatest moments of learning and positive change and growth came from some of the toughest moments and situations we experienced along the way.

Empathize, be there for them, while at the same time acknowledge that others have the right to learn from that same school and we don’t have the right to “Burn The School” just because we graduated.

Often when I’m asked for advice, my answer is, “here is my experience with a similar situation although I must say I do not want to insist that this is the answer because there are always exceptions. Consider what I’ve shared with you and then make your own decision. Don’t give your power and future to me. It belongs to you!”

The one great thing about taking into account the advice of others and then making your own decision is, “if it fails you know it was because you chose it.” I’ve found it more heart-breaking when I’ve failed following someone else’s advice. There is great satisfaction in that saying…“well at least I did it my way.” If I’m going to pay for that mistake I want it to be mine! That also goes for your successes as well. Accept the advice; accept the help while at the same time do not give your power of success and failure away. And, remember, failure is part of success…not opposite of success!

Over the years this simple statement “I have no right to burn the school” has made it less painful when I’ve had to stand by and witness others close to me going through some of the pains of learning life’s lessons…while I couldn’t do anything about it and felt helpless. By the way they also are entitled to experience the joys and highs of those schools as well. So don’t “Burn That School” either.

Hopefully this simple little philosophy will also work for you at times that you need it. Have a good week!

Posted in Customer Service & Team Work, Entrepreneurship & Business Ownership, Management & Leadership, Personal & Spiritual Development, Training & Speaking | Comments Off on Bill Gibson – Don’t Burn The School

Bill Gibson – You Can Stay Forever Young

Friday, May 10th, 2013

It is a great day for me to address the topic of You Can Stay Forever Young. Today I’m 68 calendar years young…born on May 10, 1945 to Murray and Mary Gibson (Sister Sharon) into the community of Newport Station, Hants Country, Nova Scotia, Canada. (About 300 people). Here I now live and work full time from Johannesburg, South Africa. To get to what age really is I’d like to start with the subject of change.

I’ve always found it is important to look at change as a positive influence in our lives. When we go through changes we usually have to learn new ways of doing, thinking, speaking and being. The understanding of the four stages of learning can help you see the benefits of change and it can keep you stay forever young.

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If you search back through your life and explore the process you went through while learning new things in your life, you will notice that you experienced these four stages of learning.

Think about when you:

  • learned to drive a car
  • learned the skill of typing
  • learned to use a computer
  • learned to dance
  • learned to change a diaper on a baby
  • learned a new communication skill
  • even learning to make love (LOL)

Firstly you started at stage 1 and that is where you did not even know that you really did not know i.e. unconsciously unskilled. Then you tried to drive a car with your limited experience. You suddenly realised you could not drive (stage 2). You were consciously unskilled. You felt very awkward, slow, stupid, etc. This is the stage many of us give up because of the discomfort. I mean, who wants to look and feel unskilled?

Now, if you persevered you eventually reached stage 3 – consciously skilled where you became quite happy with your driving and were conscious that you were getting skilled at it. You were alert and had an awareness of all your driving moves. (I practised on a dead end dirt road with a gravel pit at the end of the road in my uncle Reid Shanks’ old pick-up truck.) The truck was old and beat up so I couldn’t damage it!  When we become consciously skilled there is a great feeling of achievement and it creates excitement. This is the result of advancing from the consciously unskilled stage to the consciously skilled stage. You experience the winning feeling of accomplishing and completing.

The final stage is the unconsciously skilled area of learning. This is where you are driving down the road and leaning down changing radio stations or the CD player and suddenly wonder who has been driving the car and whether or not cars have passed by. If you were not consciously driving, your unconscious must have been driving. The unconsciously skilled area is where you are so experienced at doing something that you do not have to think about it.

Now, by understanding these four stages of learning it makes it easier to comprehend why you may resist change in the consciously unskilled stage of learning something new. But the real benefit is that feeling of accomplishment, exhilaration, and achievement that comes to us when we conquer this stage and end up at the next stage. Accomplishing something new creates energy and energy creates spirit and spirit is youthfulness.

We all know someone in their late sixties, seventies or eighties who look as if they are ten to fifteen years younger than they really are. These people are always out participating in new adventures and activities uncommon to their age group. In my opinion, these people have found the fountain of youth. They are not afraid to venture through the awkward growth stage of learning something new. (Consciously Unskilled). They do it continually. They are not the people that say “been there, done that, got the T-shirt…life is a bore.” They look forward to every day.

For most people it is much easier to stay secure with the old and what is comfortable. However, when you begin to master that new venture, new challenge, new skill there is a great sense of achievement, that creates energy in turn creating spirit.

Talking about spirit, if you look into the eyes of these active elderly people you see spirit. They have found the fountain of youth and it is in their attitude of always learning, progressing and trying new things. It is about openness and a willingness to try and a willingness to fail and try again.

Individuals, departments, companies, communities and countries, which are willing to accept and tackle change with vengeance, have spirit. Change is an opportunity to rejuvenate and grow. Opportunity can be found in change. So grab that opportunity to infuse a new energy into yourself and others around you. If you do this, you will always have the energy to continually develop your company and your selling, leading and learning skills and in turn helping you enjoy your business and personal life even more.

SANBS Change (2)

By the way, it is important to never judge your age or someone else’s age by the date of their birth. Age can be measured in three ways:

  1. Calendar Years: That is how many years you have been on this earth. (Society has a tendency to think in calendar years.)
  2. Biological Years: Think of five people that are all the same age in calendar years. Example 50 years of age. None of them look exactly the same age. Some have grey hair, some don’t. Some have more wrinkles than others. Some have youthful bodies, some don’t. You can affect the age of your body. Marius Liebenberg, a friend and partner, has a guest house in Paarl, Western Cape, South Africa. A few years ago just before the ARGUS Cycle competition a 72 year old man showed up to stay overnight two days before the one day competition. He had just cycled 1200 kilometres from Durban to Cape Town! How old was his body? He was probably as fit as the average 36 year old. Therefore he was not 72.
  3. Psychological Years: Some 32 year olds are 104 years of age. You hear them say “There is nothing new, life’s a bore, I am getting old, there is no future, etc.” Then you have the 70 year old who says there is a lot that is new, life’s exciting and they are childlike and happy. This is the one that can have a major influence on your biological years and the way you treat yourself. Your psychological age is the most important one. Be open to change, adventure, growth, risk, learning, challenges, new ways, new places, new people, fun and excitement and you will stay forever young.

SANBS Change (2)

For me, at 68 calendar years of age, this is the day I commit to at least 3 blogs a week and in the next 60 days will launch my on-line store of “how to” products and start introducing apps for iPhones and android phones and tablets. Watch this space…it is time to inspire not retire!

 

I’m really excited about sharing, connecting and helping to build an even more meaningful prosperous joyful future for myself and as many others as possible. Today is the first day of the rest of my life. God willing, I’ll be blogging at 100 calendar years of age. Have a forever young week!

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Bill Gibson – How To Raise Money Without Your Bank – Even In These Times

Wednesday, November 7th, 2012

(With Ryan Gibson and Wessel Ebersohn)

Growing businesses need money continually. The owner of a growing business is forever running into costs, both planned for and unforeseen. The business owner may need cash to survive in tough times when something unforeseen strikes. When times are good the business owner will always need cash to build and grow the business.

Right now, going to your bank is not necessarily the best option. They were careful before the current economic downturn hit. They are even more careful now. Remember that they too are working with the money of investors. Like you, the bank cannot afford to be reckless.

This is not to say that there is no money available for entrepreneurs. There is less of it, but it is there. You have to find a way to get your share of it.

Investors

A good place to start is with your current investors, if you have any. If you do have investors you need to look after them in every possible way. Nurture a relationship based on openness. Be aware of their need for information. Share with them the challenges the business faces. Seek their advice on difficult issues. Above all, never cut them out. If you invested in someone else’s business, you would want to know exactly what was going on in the business. Treat them the same way.

Family and friends

If you have no current investors, the next best bet is your family and friends. Today loans from family and friends are an immense industry. Virgin Loans, operating in North America, does nothing but facilitate such loans. They supply the documentation and give the entire transaction a solid legal basis. According to their figures, some US$170 million was lent to entrepreneurs worldwide by family and friends in the last quarter of 2008. The fact that Virgin Loans has been successful is an indication that family members are more comfortable with lending a substantial sum if the loan is properly formalised. The lender will need that extra security. When approaching a family member make it clear that a formal contract will be drawn up by an attorney. If you are lucky enough to come from a business family, you may not only get the capital you need, but you may also receive good advice that in the long run may be more valuable than money.

But remember that even your closest family and dearest friends have to look after their interests. You may need to enter a deal in which the business repays the loan eventually and the investor still retains a minority shareholding in the business. The main effect this will have on your business is that when the day comes to sell it, your investor will receive his or her share of the proceeds. A major advantage of borrowing from those close to you is that usually no collateral is required.

Every prospective investor has to be treated with respect. And that includes family and friends. The same way that you need to do your homework for any other investor, so you must prepare your approach to family and friends too. You cannot expect people to hand over money blindly just because they know you well.

Honesty is the best policy

Above all, no matter who you are dealing with, always tell the absolute, unvarnished truth. If you are in mining, the investor needs to know if you are actually digging up the metal or if you are still just at the exploration stage. The same applies to any business. Tell your prospective investor if you are still developing the product or if it is actually on the market.

Better still, show them exactly where you are. Misleading them in the smallest detail is bound to have serious repercussions later. It is vital to keep investors and prospective investors as close to the action as you can. Treat them like board members, show them where the money is going, make it clear that their money is being used carefully. Then be sure that you use it very, very carefully. Under such circumstances investors, of any kind, feel more comfortable.

Don’t play games

Also make quite clear from the beginning what you are prepared to give up. In a recent case the writers of the article were involved with a young entrepreneur who needed an equity investment of R600 000, but he was so unclear about, or unwilling to discuss, the actual percentage of his business he was prepared to give up in exchange for the investment they lost interest in getting involved raising the money.

It is good to be cautious about how much information you give although it can backfire, especially with friends and associates, if you are too cautious with your information. They may be insulted that you don’t trust them and decide not to get involved.

Where to find investors

Many successful business people have started with a number of small investors. Raymond Ackerman started Pick ’n Pay with the help of 100 small investors, each coming in with a mixture of equity and loan finance. This divided the risk among the investors, making it easier for them to make the investment. Most investors like to have a small speculative investment that may show a really big return. A sound place to look for investors is in your own industry. People who work in your industry understand the business and know what you are trying to achieve. They believe in the industry and are therefore more likely to believe in you. If you can get a key investor, someone with a big reputation in your industry, even if he or she only comes in with one percent of the investment you need, others are likely to follow. A real leader will open doors for you.

Exhibit confidence

One absolute when dealing with any investor is not to come across as if you are fearful. No one is going to invest in someone who is afraid of the opposition. More than anything else, investors need to see that the business they are investing in is led by someone who has confidence. And there is a difference between confidence and bravado. Big talk is not going to impress anyone. With confidence comes courage. You have to be ready to accept refusals. You are certainly going to have those. If necessary, you must be ready to approach industry heavyweights and pitch your investment to them. One entrepreneur recently successfully sought investment from the boss of a major multinational. He had tried phoning him, but a solid wall of receptionists and PA’s kept him out. He could not even discover his target’s email address. So eventually he tried an email, using the man’s name @ the company’s name. He made contact that way and, after a few meetings, secured the investment. Business is not for the faint-hearted.

The most common ways for entrepreneurs to finance their companies in the early days are probably securing second, third, fourth of whatever bonds on their homes. Cashing in insurance policies is another. People do what they have to do to grow their businesses. There are many other ways of getting what you need without having to pay for it. This can be just as valuable as receiving the hard cash. Here are a few:

Barter

If the service or product you need is supplied by someone who uses what you have to offer, getting them to agree to bartering should not be difficult. Fundamentally, any agreement to barter must be in the interest of both parties. If not, it simply doesn’t work. This publication was once offered a barter deal by a sweet manufacturer. We could not imagine how we were going to consume that amount of sweets, so the deal fell through.

Negotiate no rent for the first six months

This will only work in an area in which office space is standing empty. In all such deals you need to look at things from the other party’s point of view. If their offices have been empty for a while, they may well be agreeable, but you will have to sign a long lease.

Offer discounts for upfront or COD payments

Getting money in fast is almost as good as capital. The discounts will have to be genuine, but businesses that are cash-flush may like the idea.

Seek investment in a product or project

Instead of giving away equity in your company you could seek an investor for a single product or project. This would have to be clearly defined and the investment would probably be smaller, but it could get a key part of your business off the ground. This option could be interesting to a company operating in broadly the same field as you are. In time you could either buy them out or sell them the entire product.

Pay a premium for extended credit

This may work if a major supplier to you can afford to carry you for a while. The downside will be that you will have to pay heavy interest. You will also have to persuade the supplier that you will be worth the risk in the long term.

Have someone stand surety for you with a major supplier

This publication was started that way, when Martin Dannheiser, the owner of the Springs Advertiser at the time, stood surety for our printing during our first year of operation. Your reputation is everything here. The person who stands surety must have great confidence in you. He or she also needs to be a real friend.

Trade equity for expertise, services or products

This sort of investor will only come from the companies that supply businesses like your own. A relationship with the supplier will be needed before they feel comfortable with this arrangement. How much they will have to supply before receiving the equity will be the main issue.

Return on investment of your personal assets

When searching for finance, remember that you do have assets that belong to you. First look at exploiting your own personal assets. You could minimise your needs simply by making best use of your skills. As a business owner who needs to prospect for new clients and mine your client base for opportunities, you need to consider the kind of return on investment you receive from investing your personal assets. This is, after all, what you possess. The better use you make of your personal assets, the more likely you are to be successful.

Your time: It is important that you invest your time with the right people and that you do the right things to get the best return on your time. It is your most valuable asset.

Your energy: If you have the time available, you must also have the energy. Some people give you energy and others drain it. Stay close to those who give you energy and avoid the others. Get them out of your life. Certain habits and activities invigorate you and give you energy. Other habits and activities take away your energy. It is important to value and invest this asset called energy wisely. When your energy is up, you will notice that your passion and motivation are up as well. Energy is a key ingredient to your success as an entrepreneur. Stay healthy and remember this quote. “If you don’t take care of your body then where are you going to live?” Your body is the only piece of real estate that you have from the time you are born to the time you exit this planet. Take care of it! 

Your ability: Your expertise, ideas, knowledge, skills, and general “know how” are all valuable. You can waste these vital assets on some people, but working with others may give you great returns on your investment. Ability is an asset to develop continually and always use wisely.

Your money: In the beginning the business owner is usually short of money. You always need to invest what you have wisely. In the early days of your business this need is more intense. Consider carefully for whom you buy coffee or lunch. Some people over lunch will give a great return on investment in referrals, business and even personal motivation and support. Others may add no value whatsoever. An investment in new clothes, joining the right association, attending the right conference, eating at the right restaurant and buying personal development tapes may be a better investment than a night on the town with old friends. To build your business, you must invest these assets wisely.

Your reputation: Successful, experienced businesspeople get most of their new business from present clients and their network of business and personal associates. This is possible if you network and associate with people who enhance your credibility. Positive word of mouth is powerful and in time it becomes your biggest asset. Select carefully the places you frequent and those people you socialise and do business with. Your name is your future. You are a brand. Invest in it wisely…

The 6 Personal C’s that interest an investor or creditor

With input from Sibongiseni Ngundze, the Managing Director of Nedbank Small Business Services, the writers came up with the following six Cs that investors, lenders and creditors carefully look at before getting involved. 

Concept

You must have a good concept, something that sets you apart from the herd. If you are in retail, it may be something as simple as being close to easy parking or being located in the centre of the clientèle you serve. In other industries it may be something more complex, but simple improvements often make a decisive difference. An extra element of service or a practical improvement of a product may make you top of the class.

Character

This goes way beyond personality. Character is the combination of qualities you possess that makes people trust you. Honesty, perseverance, dependability, reliability, supportive qualities, loyalty, enthusiasm: these are the sort of character aspects that make people interested in doing business with you.

Capacity

Do not attempt something for which you do not have the capacity. If you are trying to go beyond your abilities or the capacity of your business, investors are likely to see this and be frightened off. On the other hand, should an investor not understand that you have gone beyond your capacity and invests in your business anyway, the results could be disastrous.

Collateral

When banks talk about collateral, they usually mean fixed assets like property. Completely different collateral arrangements can sometimes be arranged with a private investor. For instance, the investor may be willing to take a percentage of your business as collateral. Or they may be satisfied with your character, concept and commitment and ignore collateral. 

Contribution

A bank or an investor wants to see what your contribution to the venture is. This could be the amount of money you have or will invest. It may be in the form of intellectual capital, equipment, property or just good old hard work and expertise. Be prepared to show your level of contribution.

Commitment

Nothing is more important than commitment. Seeing that you are truly committed gives any investor great confidence in the undertaking. You need to be able to demonstrate to the investor that, for you, the business in which the investment is being made is a life and death matter.

 

The 5 Stages of building a relationship with an investor

If you want someone to invest in your business, you need to build a relationship with that person. Here are the five stages of building a relationship:

1. Attraction

Demonstrate your uniqueness. If you and your business are the same as all others, why should they be interested in you or even consider investing in you. Respect boundaries. You may be outgoing and extroverted, but you may be dealing with someone who is not. Do a lot of listening. You need to understand the other person’s needs and wants. Make contact frequently. You need to work on the relationship. Lunch and dinner meetings, family dates: such contact builds a relationship.

2. Exploration

At this stage you need to give outstanding service. Go the extra mile. The rule is to under-promise and over-deliver. You must keep every commitment, even the smallest ones. Consciously or unconsciously, the other person is testing you. Being innovative and resourceful will help to show that you are different. Do not let up on making frequent contact. It will help you move to the next stage.

3. Development

By this time you need to be proving your abilities and, above all, you must be seen to be keeping your promises. Your relationship with the investor should be moving to a personal level. You should by now be networking with those who surround the investor. Keep up the frequent contact, but do not be a nuisance.

4. Commitment

By now you should understand the investor’s decision-making process. Try to anticipate the investors’ needs before they know. By now you must also understand the politics surrounding the investor. Both sides should now be committed to the relationship. Continue the frequent meanings to strengthen the relationship.

5. Unity

At this point you should be leading the process to get the job done. You are now seen as a close associate of the investor. You are involved now, a member of the inner circle, so tread lightly. The investor is on your team now.

“If you have found this blog article to be valuable for you, I would be grateful if you “shared” it with your Social Media Networks. Also feel free to circulate it by e-mail or other means internally within your organization or externally to your clients, suppliers and personal and business network. Thank-you!”    – Bill Gibson

Bill Gibson is a Canadian who is living in South Africa. He is an international speaker and author and a developer of sales, service, marketing, collecting, employee morale building, personal development and entrepreneurial training programs and systems. His blog is www.bill-gibson.com and his website is www.kbitraining.com. He can be reached at bill@kbitraining.com or phone +27-11-784-1720 in South Africa. You can follow Bill Gibson on Twitter: @billgibson1, connect on LinkedIn: http://www.linkedin.com/profile/view?id=143197191&trk=nav_responsive_tab_profile_pic or Knowledge Brokers International SA Pty Ltd Facebook Page: https://www.facebook.com/knowledgebrokers?ref=hl

 

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Bill Gibson – Getting Out Of A Cash Flow Crisis In A Hurry

Wednesday, November 7th, 2012

Succeed Magazine – www.succeed.co.za – February 2008

If you have hit a cash flow crisis do not say, “I do not believe it.” While you are saying this you are in denial and valuable time is passing by. Rather face reality. “If it walks like a duck, and it talks like a duck, it is not an eagle,” says Bill Gibson, director of Knowledge Brokers International (KBI). Succeed asked how he would get out of a cash flow crisis:

Act immediately

Do not waste time and energy on trying to figure out how it happened or who is to blame. You can do that later. Focus all your resources on correcting the short-term cash flow problem.

Be proactive with your creditors

Visit or call them and explain your situation. Ask for a specific payment or non-payment plan over the next 60 to 90 days. It is simply a matter of scheduling payments that both you and the creditors can live with. Get the payments as low as possible with a commitment to increase the payments if things get better. Find out the minimum payments your creditors can accept. Perhaps you can even just pay interest. Tell them you will phone at the end of the month to inform them what you can pay. Ask them to not phone you in the first three weeks. That way you can devote all your time and energy to bringing in the cash, rather than handling calls from creditors which depletes your time and energy. I am not suggesting that you misuse your creditors, but facts are facts. If you owe a large amount of money to creditors it is not just your problem, it is also theirs. They want to see you stay afloat.

Swallow your pride and invite them to help. You will be surprised at the solutions with which they may come up.

Be proactive with your debtors

Sit down face-to-face with all clients who owe you money. Offer a discount of 10% to those who can pay much faster than normal Negotiate payment advances Ask for advances of 30% to 100% on jobs that you are doing. This could carry you through the tough period.

The last two months before year end large companies, parastatals and government departments often have budgets they have not spent. If they do not spend the money, it is not carried over to the next financial year and so they often pay in advance. Be sales oriented. Every single person who works for the company has to be sales oriented. Reg Wightman, the owner of a building supply dealership, one day accompanied his truck driver on a delivery. He walked around the site and talked to various people working on the job.

When he left the site he had a bigger order than when he arrived. It made him realise that the person doing the delivery is also really a salesperson, so he rearranged his whole operation. He delegated a lot of his responsibilities as manager to other employees so he could be on the delivery truck a lot more. His sales increased markedly.

Find innovative ways to sell

Terry Stalker is the owner of a bed company. He decided to place lamps, comforters and sheets in his delivery trucks so that his delivery people could sell them when doing deliveries. Installers were also trained to look around the house and report any needs they noted in terms of furniture. A few days later, one of the salespeople would give the client a call saying, “Well, our driver was at your home and he noticed you seemed to need…”

They got a lot of add-on sales that way. When you have a cash crisis you need to find innovative ways to sell.

Last resort moves

• Take your short–term debts, such as lines of credit, promissory notes, credit card balances, income tax and supplier balances, and try and get a consolidation loan. Spread the payments over three years. This frees up monthly capital and lowers your monthly overheads. It might cost more in terms of interest in the long run, but it could be the short term fix needed to get you out of trouble.

• Consider offering shares in your company to major creditors to wipe out all or part of the balance you owe. Have a good buyback clause.

• Sell your receivables at a discount to the company that buys receivables.

• Use equity in your home with a second bond to pay off some of the debts.

• Consider a financially sound co-signer for a large consolidation loan. In return, you could put that person on your payroll for an agreed amount until the debt is paid.

• Seek advice from business owners who survived cash flow problems.

“If you have found this blog article to be valuable for you, I would be grateful if you “shared” it with your Social Media Networks. Also feel free to circulate it by e-mail or other means internally within your organization or externally to your clients, suppliers and personal and business network. Thank-you!”    – Bill Gibson

Bill Gibson is a Canadian who is living in South Africa. He is an international speaker and author and a developer of sales, service, marketing, collecting, employee morale building, personal development and entrepreneurial training programs and systems. His blog is www.bill-gibson.com and his website is www.kbitraining.com. He can be reached at bill@kbitraining.com or phone +27-11-784-1720 in South Africa. You can follow Bill Gibson on Twitter: @billgibson1, connect on LinkedIn: http://www.linkedin.com/profile/view?id=143197191&trk=nav_responsive_tab_profile_pic or Knowledge Brokers International SA Pty Ltd Facebook Page: https://www.facebook.com/knowledgebrokers?ref=hl

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Bill Gibson – Yet another 6 ways to raise money without a bank

Tuesday, November 6th, 2012

Succeed Magazine – www.succeed.co.za – April 2007

1. Negotiate no rent for the first six months

Plenty of commercial property sites, in almost every area, lie vacant. You can use this to your advantage. If you can find premises that have been vacant for a long time, there is a good chance you could negotiate your first six months as rent-free.

You do not have to stop at just your property. Computers, photocopiers, switchboards and a host of other equipment can be purchased under conditions that allow the first few months of purchase to be payment free. And the numbers do not lie. If monthly rent for your premises is R20 000, six months rent-free means you have raised R120 000. Add in the capital raised by not having to pay off equipment immediately, and you could raise R200 000 or more.

2. Pay a minimal amount in exchange for a future incentive

If you are sure that your business will be raking in handsome profits in months to come, use this as an asset. Instead of struggling to pay key employees or contractors their full rates while they are working, convince them to take less pay in exchange for greater revenue later. This could be in the form of a substantial bonus or even equity in the company.

3. Take advantage of corporate sponsorships

Many large companies allocate a portion of their budgets to socially responsible initiatives. Corporate sponsorships usually form part of this and are a useful source of finance.

There are many examples where this funding has allowed companies to take off. A few years ago, a rural businesswoman was able to get a grant from Anglo Ashanti because her business was empowering paraplegics. Today her company employs over 100 people. Similar luck fell on a packaging manufacturer in Mpumalanga during October last year. She was able to secure sponsorship funding from a consortium of South African food companies because her business promised to empower local women in her area. She had her starting costs completely paid for and all she had to do was write a few letters.

Do not assume that this kind of finance will always come easily. The time and effort required to organise a sponsorship is seldom small. It is most likely to be a long process of negotiation. It is also important to consider that most companies support businesses that are aimed at people they are trying to reach. This is why you should think carefully about what you can offer them. It is likely they will want some form of credit or attribution for their socially responsible donations. If you can guarantee this, you will go a long way in being allocated their funds.

4. Promise clients special terms for two years

Allowing a customer an extended special rate for two years, on condition that they sign a two-year contract, can be a great option for getting your company out of its start-up phase. While you are struggling to get initial customers, special rates can rope clients into going into long-term business with you. From an investor’s point of view, it makes perfect sense.

Once you have secured a list of long-term clients you are, for argument’s sake, a viable business. This makes you a more compelling recipient for investment capital.

5. Borrow against your bond

This option has many advantages, but will only work if you have a rock solid business plan. You need to know exactly where your business is going and how you intend to take it there.

The risks should give you some perspective. When you borrow against the equity in your bond, you are not borrowing from the bank. You are borrowing from yourself.

If you do not make the payments you have a lot to lose. The bank will have the right to force you to sell your property – which will most probably be your home. This means you have to be particularly careful. 

6. Offer discounts for upfront payment

It is the task of financial directors and procurement managers to save company costs. That is where they get their job satisfaction. This situation can create a compelling answer to your cash flow problems. By promising customers a reduced rate for paying 50% to 100% of your costs up front, you can both benefit. They minimise costs while you get working capital. The trick is to make sure this discount is attractive. Two percent off is not going to get anyone excited

Bill Gibson has spoken to over one million people around the world and is the chairperson of and a partner in Knowledge Brokers International SA(Pty) Ltd (KBI), along with Marius Liebenberg. Bill Gibson is the author/ developer of the 25-module sales system titled The Complete Sales Action System and the eight-module Managing Complex Business Relationships system. For more information about Bill Gibson as a speaker and the KBI products, contact 011 784 1720 or bill@kbitraining.com.

Posted in Economic & Community, Entrepreneurship & Business Ownership, Management & Leadership | Comments Off on Bill Gibson – Yet another 6 ways to raise money without a bank

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