Your idea, to fix, improve or change a Good or a Service,
must be sound, tested and proven to be sound. Your idea, to provide such a
Product to a particular group and type of consumer, must always prove to be
financially viable at its selling price. Your idea, to extract, construct,
manufacture, trade, endorse or serve, must benefit all stakeholders. Therefore,
your idea, properly researched and developed, feasible in a defined targeted
market, priced to compete and to benefit all involved, must be simple and
confidentially communicated to investment bankers. So, it is not the funding,
it is the professional management that is crucial to the success of your idea.
Clearly, not every idea is a good idea. Market research,
surveying how customers and consumers are currently being served, by whom, in
what amount and at what price, is very necessary. Your idea must fix a problem,
improve a function or change for the better. Your idea must be tested, proving
its viability or abandon. Testing on family and friends is necessary and can be
helpful but insufficient. The market you may wish to target comprises strangers
with strange habits and must be studied. Your idea, if viable to this specific
market, must be developed into a range of Products.
Products, broken down to a sellable unit, must be
further and continuously analyzed as to its cost and subsequently, to its
price. A Breakeven point, where the unit cost meets the consumer, must be
found. Professional costing and pricing analysis, simply divides all production
and administrative bills by the annual volume of such sellable units produced,
is essential. Answering questions to arrive at a market competitive price. How
many units must be produced in a given period? What should be the size of
production and sales efforts? What would be the related administrative cost and
projected returns? Noting that, Feasibility can only be achieved by
understanding the targeted market demographic, knowing your consumers and customers.
Customers are important stakeholders, who pay for
benefits receive from the product. Employees, every person that executes a
physical or mental function in the routine productive process, are paid salaries
or wages, for their skills and services. Suppliers of raw materials or direct
services are also paid for their inputs. Vendors, providing indirect inputs or
supporting services, are paid for such Goods and Services. Lenders earn
interest, charges and fees, from the loans, overdraft or debt financing provided
to stabilize cash flows. Your idea and capital must also earn Returns On
Investment. Hence, during a reasonable repayment period all stakeholders, inclusive
of your Investment Banker, must benefit.
An Investment Banker, bridges the gap between money
and income, is paid to identify funds underutilized and opportunities for the
said funds to be better employed. An individual who often works as part of a
financial institution, and is primarily concerned with raising capital for
corporations, governments and/or other entities. Such a person will transform
your simple idea into a full and summary Prospectus to attract equity
investors. Investors, who are only interested in better returns for manageable
risks. While, debt financing, which covers the unpredictable risks, is assumed
by you. Hence, hiring experienced full or part time management is the key
component towards the success of your idea.
Rationale
T.A.J
& Associates Company Limited uses this occasion to comment
on topics that have been covered, both academically and by the mainstream media,
to add its opinion and point out investment opportunity, not to invoke any social
action.
