The Rainmaker

Start-Up to Conglomerate

Jacques Magliolo

• Publisher: Business Expert Press
• Year: 2019
• Print ISBN: 9781949991031
• eBook ISBN: 9781949991048
• Topic: Business
• Subtopic: Business General
• Index: Business

This book will help you find faults and then solutions to establish a solid foundation for your company and, when required, quickly fix, coordinate recovery, raise finance, and advise you on how you can run a profitable business.

Global statistics proclaim that 80 percent of new businesses fail within the first 18 months—shocking and true, but preventable. Many entrepreneurs use the poor excuse of undercapitalization, but recently over $1 trillion was invested in new projects. There are more simple and basic reasons for failure. The Rainmaker is thus called on to assist entrepreneurs to succeed past that financial ruin barrier of 18 months by helping them to properly structure and run a company that meets ultimate best practice solutions and systems—which are realistic and competitively better than peers.

This book looks at how The Rainmaker is able to bring sunshine to desperate companies, by finding faults and then matching solutions to establish a solid foundation for your company and, when required, quickly fix, coordinate recovery, raise finance, and advise you on how you can run a profitable business. The Rainmaker is a combination of troubleshooter, advisor, mentor, and financier.

CHAPTER 1

Introducing the Power Entrepreneur

Let me state that this is not strictly a textbook on business and how to raise funds. There are literally thousands of such books available worldwide, many free to download. If you need some assistance, send me an e-mail, and I will help you find information pertinent to your specific needs.

The Rainmaker is simply a menu of factors that you need to take extreme care and cognizance of to create a company that you will be proud of and achieve success for your customers, staff, the environment within which you operate, and, of course, for you and your partners.

In addition, to achieve your goals, whatever these may be, the business needs to be profitable, cash flush, and progressive for today and for the long term. Stated differently, in an environment that is highly, and at times, cruelly competitive, you need to drive innovation hard, be progressive in every facet of your business, and ensure that your company services and products are continually in demand. You have to accomplish these, while balancing people, money, and time. This is by no means an easy task to achieve.

Let’s start with one pertinent and basic fact.

You need to draft a business plan. I am not suggesting that you have an expensive document that you ultimately never use. I am advising you to have a working document that is both a strategy and a plan for you and your business for today and the future. This should include, among others, goals and milestones. Some decades ago, my personal business mentor in stockbroking likened a business plan to a shopping list.

I think that the analogy is important, so I will repeat it here.

• Scenario 1: Imagine going shopping with a limited amount of funds and no shopping list.

• Scenario 2: Imagine going shopping with a limited amount of funds and a poorly thought-out shopping list.

• Scenario 3: Imagine going shopping with a limited amount of funds and a well-thought-out shopping list.

In scenario 1, you are likely to end up buying goods that you don’t actually require, forgetting the more critical ones. In business, Imagine forgetting to buy fuel for your delivery trucks or a building construction company not purchasing cement. At the time, I said to my mentor that these were obvious purchases and, as such, I wouldn’t forget—with or without a business plan.

He just smiled and said,

Maybe so, but without proper information, you could buy too much or too little cement. Either way, your business would come to a standstill. In the former, you wouldn’t have enough cash to buy other material to finish the project (wooden beams, doors, and bricks, etc.), and in the latter, your project would come to a grinding halt very quickly.

In scenario 2, simply put—you could end up buying material that you may only need later in the project, while not buying the more currently pertinent materials. In the last example, you would be able to—over the years—home in on required materials and expenses as they are required.

In reality, a business plan is a strategy document, which should outline the responsibilities of key staff and directors. It should have deliverables and costings attached. At that stage, I was pretty naïve and said, “Surely, a business plan is private? Inserting competitively sensitive information in a document is not wise.”

It is thus important to differentiate the specific uses of a business plan. In the first instance, a business plan is a strategy document for your board of directors. Secondly, parts of the document can be used for marketing and profiles, and, finally, it can be used to raise capital.

As such, the only way to achieve the various uses is to write a business plan in independent sections that can be removed for various purposes. While textbooks cite dozens of pertinent rules that entrepreneurs need to adhere to and—as stated so often—document in a business plan, there are actually also personality traits that are as important as dry facts. I will set these out more comprehensively in later chapters.

In the meantime, look at just four basic lessons by which many successful entrepreneurs live by, whether documented or not.

Our Starting Point—Four Lessons

• The first is that complacency in a world that is hostile and hungry to take your success away from you is detrimental to your financial health. Competitors, both new and experienced, will lure your skilled staff away with better financial packages, copy your products and services at lower prices, and undertake marketing campaigns aimed at stealing market share away from you.

I am not saying that their lower priced products will be better than yours, but in a world of personal financial stress, many buyers will try the new product.

• Second, hesitation to be innovative with current products and services or to expand your business into new yet related products could see your company stagnate and move into inevitable disbandment as better products enter the market at lower costs.

• Third, in a continually changing world of legislation and corporate rules and guidelines, ensure that you are focused. Ask yourself, “Is my plan properly structured to be effective from the first day, and can I stay ahead of competitors, both local and foreign?”

• Lastly, your company should always be well capitalized. Consequently, every decision should take into account its influence on working capital and fixed costs.

Essentially, you should meet changing consumer needs by being innovative in introducing new or changed products and services. Buyers simply get bored, so alter the packaging and start new advertising campaigns and promotions or product competitions. This should be the norm and not the exception. Remember to continually communicate with your staff, key personnel, directors, partners, and, of course, customers.

Let’s look at some additional information that you need to note as an entrepreneur who will continuously require working capital and expansion funds at some point in the future.

Your Business Is Not an Island

At some point, you will need to approach your bank or the higher-risk investors, such as Angel Funds and Venture Capitalists. You will then quickly realize the value of having a well-coordinated business plan. Despite the importance of such a document, many entrepreneurs simply don’t have one and will hastily pull one together, using templates found on the Internet.

You must understand that investors get thousands of requests for funding, so why would they choose you? Simply put, you have to impress them to get what you want. This next statement may sound wrong: You need to have a complete understanding of every facet of your business. How is that even possible? If you are hired to run a manufacturing company, should you know how the factory and all its component machinery operate? The simple answer is yes, but in cases of professional CEOs (chief executive officers), the alternative is to ensure that your advisors are knowledgeable about the product and its production.

Having intimate knowledge of the company and all its components (as CEO and as a team) will level the power play between you and professional investors and institutions. This means that you should use a two-pronged approach:

• First, your business plan must highlight that you are the leader and focused on driving the company within the market. This is called a market-driven enterprise.

• Second, you should always be prepared to address the following questions:

How much do you require?

How will you use these funds?

How will you pay these funds back?

A third question has recently come to light, as highlighted in a global aviation project that required $100 million to expand a fleet by 10 aeroplanes. This would add $8 million to profits.

Question: If we invested $150 million in your company, how many aeroplanes could you buy, and how would this influence the bottom line?

The question highlights whether you are prepared for any eventualities. Do you have the systems and spreadsheets in place to enable you to conduct a rapid analysis of the changed circumstances? What they are really asking is whether the added funds will increase the profit ratio due to economies of scale? Will the added funds enable you to gain market share? Or will the added funds place you in a difficult position, as the added aeroplanes may not be filled as demand for goods may not be met?

Sadly, everything you do in a commercial business must be linked to an economic motive. I say “sadly” because as your business expands, you will have to take on more directors and staff and additional capital—so there will be a continual need to interact with more investors. There is always a risk that your focus will change from managing your business to trying to satisfy these investors all the time. My advice is to focus on the business, and the value of the firm will look after itself.

No one can argue with a company that has a solid cash flow, increasing value, strong order books, and growing profi...

Table of contents

• Cover
• Halftitle Page
• Title Page
• Copyright Page
• Dedication
• Contents
• What Is a Rainmaker?
• Word of Advice
• About the Book
• Acknowledgments
• Chapter 1 Introducing the Power Entrepreneur
• Chapter 2 Knowledge and Survival
• Chapter 3 Traits and Successful Directives
• Chapter 4 Identifying Corporate Mistakes
• Chapter 5 Will Your Business Concept Soar?
• Chapter 6 Necessary Basics
• Chapter 7 Essential Legal To-Do List
• Chapter 8 Developing Priorities
• Chapter 9 Evaluation of a Business Concept
• Chapter 10 Feasibilities
• Chapter 11 Who Are All These People?
• Chapter 12 Strategic Tools
• Chapter 13 Isolating Start-Ups and Strategic Rules
• Chapter 14 Rainmaker Solving Tools
• Chapter 15 No One-Size-Fits-All Strategy
• Chapter 16 I Can’t Find a Solution
• Chapter 17 Not Standing Still
• Chapter 18 Finances and Your Business
• Chapter 19 Financial Forecasts
• Chapter 20 Capital Raising Presentation
• Chapter 21 Last Word—Be Wary of Overtrading
• Appendix
• Glossary
• About the Author
• Index