Financial Security in Smallness

by | May 15, 2003 | Archives

Financial security in smallness comes because the “Ten Times Theory” is always in effect. This theory says that for every zero you add to the amount you want, the task becomes exponentially harder by a factor of ten.  Many smalls are easier to find for financial securoty than one big.To find a person to lend you ten thousand for financial security is 10 times harder than a thousand. To get $100,000 is 100 times harder than ten thousand and raising a million from one person is 1,000 times harder.

Private investors with a million lying around to invest are few and far between. And private investors who are WILLING to invest a million are even fewer and farther between.

Lesson #3 showed us how to take advantage of distortions to obtain finance and ended by explaining how the borrower had created a limited partnership to expand the number of investors reached abroad. This lesson helps with ideas on how to expand your potential borrowers overseas by overcoming the confidence crunch.

Individuals with a million dollars may be individuals, but they act like institutions so we enhance our chances of success if we create paths for investors to lend or invest less.

Advertising abroad is an excellent initial way to attract private investors and lenders quickly, but this can be expensive. Most media do not give your money back if the ad fails.

When you advertise, you need ads that attract as many investor- lenders as possible (without creating the legal crisis we will study in a future lesson). One way to do this is to make initial investments or loans small as is practical.

This is for two reasons. First, there are more investors with a little money than with a lot. Second, the biggest challenge in fund raising is the creation of confidence. International aspects of fundraising, i.e. distance, differing cultures, language and idiomatic obstacles, etc. hinder confidence.

One way to reduce these confidence blocks is by starting small so your investors can get to know you without great risk. The best way to create an international financing and or sales system is with a long-term plan that uses centers of influence and repeat business.

Step #1 is to have a small option. This does not mean you cannot have an investment or loan for large amounts as well. Good investment packaging matches your needs, the cost of the marketing itself in large and small amounts.

Step #2 in developing confidence is to have a good business plan in your offer and we look how to do this in the next lesson. Until then, good business wherever you are and go!


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