Tag Archives: investment

Money Guidance from the great Warren Buffet

2014.08.06 saving money 1

In the last century, Warren Buffet is undoubtedly one of the most successful investors. His guidance and methods are so simple. Here are some invaluable tips for you to use.

Take Credit carefully – Be wise, and you can succeed without getting into debt. Clever debt aids in investing in your future. You are left in a stronger place long term.Buying furniture for example has a negative long term effect and is not an investment, buying a house on the other hand is an investment and taking a bond is a positive thing.

Always pay yourself before anyone else – It is so important to budget. Spend what is left after saving, and not the other way round. Know what you want to save monthly and make this a priority. This will aid you going forward in acquiring good assets.

Know your good and bad habits – A lot of our money habits have been inherited and take a conscious choice to break the bad ones and replace them with good ones, that only serve you in the short, medium and long term.

Understand the difference between price and values – Always look at the yield of both these words. In Mr Buffets words: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Do not be scared of Investing

Here are some words and terms you need to know

  • Open a brokerage account
  • Pick an index fund
  • Buy the fund through your brokerage account
  • Invest Long-Term

Mr Buffet always suggests that if you invest in anything, it must be there for the long term. Have a proper strategy, get someone to help you. Always look at the big picture.

Money does NOT make the world go around. The real focus in life is Family, Health and Friends, the rest is a means to the end. Sure money creates options in life. But remember the things that really count. Remember that materialism does not make one happy. However be wise in your choices with your money.

How to pitch your entrepreneurial Idea to investors or angels

Businesswoman reporting to sales in a seminar

 

One of the most important skills any entrepreneur needs to have is the ability to pitch the product, project or idea you intend to sell. No matter if you find yourself presenting your business idea in front of a S&P 500 company board of directors or have 5 minutes with an angel investor, more often than not, their decision is going to be based on the quality of your presentation along with the people involved in the business. Here are some do’s and don’ts when presenting your ideas.

DO’s

Prepare the idea as all as yourself

Business or Angel investors will always invest in the entrepreneur not in the business plan, idea or product. The most important thing is that the investor and entrepreneur form a bond and get along. Investors will look to see if you are fast, thoughtful and efficient, and most of all sustain the project from conception to growth.

Highlight the main ideas and essentials of your business idea

Investors are more interested in the presentation of your business idea rather than the details of the business plan. If you can, in 5 minutes of less, explain your business idea, the return on investment and the growth strategy; then you are on the right track.

Have a plan from the get-go

Investors are not only interested in potential and idea of making money, but more interested in the exit strategy. You will find that many investors grow tired and bored of a project after several years and begin to seek out new opportunities after period of time. To satisfy this problem, make sure you have an exit strategy for your investors. Will you sell your shares to another entrepreneur? Sell to a venture capitalist? Franchise the business? Or take the company public?

Investigate, research and find out as much as you can about your investors

Be prepared to undertake extensive research about your potential investors in order to get a better idea of who you are dealing with. Find out who they have invested with in the past. Have their previous investments been successful or not. How much knowledge do they have about your industry? Do they have the time to give to the project and yourself?

Take care of all due diligence

Generally, it does not take more than a few months for investors to do their due diligence on your idea and make sure that it is worth their time, energy and money or it is a waste of time.

Prepare and negotiate a term sheet offer

Given your level of experience, this part of the presentation can be an extremely painful part of the whole proposal. A term sheet is a bullet-point document outlining the material terms and conditions of a business agreement. After a term sheet has been “executed”, it guides legal counsel in the preparation of a proposed “final agreement”. It then guides, but is not necessarily binding, as the signatories negotiate, usually with legal counsel, the final terms of their agreement. A term sheet implies the conditions of a business transaction, as proposed by a party. It may be either binding or non-binding.

DONT’S

Your Business idea does not solve a compelling problem

In general, individual pay for problem to be solved. It does not matter what your problem is, all you need to know is that problems sell. Investment pitches that try to sell a gadget or thing that is cool, complicated and that nobody has thought of creating; is probably, in all honesty, an idea that will not muster that much enthusiasm or interest other that curiosity from investors. If nobody has thought of or had the will to create the gadget, it is probably because no one actually needs it. You need to be able to, in a clear and concise way, articulate the problem, explain who has the problem, and why they are willing to pay have the problem solved. As mentioned above, if you cannot explain and articulate the problem, then your idea and pitch probably sucks.

Never use meaningless numbers and top-down estimates

Do not include in your pitch any verbiage or statements like “the current market has 20 gazillion people globally and if i can target a tenth of a percent of those potential customers, then we will all be multi-billionaires.” This will only make you sound and look like a complete idiot and indicate that you are lazy and have not done the leg work and undertaken the proper research and market analysis of your sales and economics. I agree you have to have big ideas and go after the big markets and be rewarded with big payoffs, however once you’ve established it’s a large, growing, profitable and attractive market, you need to shift gears to bottoms-up estimates. Do your market research and come up with conversion rates, sales cycles, etc. and provide investors with concrete and achievable estimates for growth.

Make sure you a good idea about how to make money

If you cannot clearly show exactly how your business idea will create cash flows as well why your product is worth buying, then i am sorry to tell you, but your presentation will fail and entice any potential investor to give up their cash for your idea or project. If you want to get any investment capital from any investor you need to be able to clearly show how you will be able to return the initial seed capital as well as how much profit, over and above the seed capital, you will make on that investment for the investor. All investors need to be certain that you are running a viable business. Make sure you can identify and show your cash flows, justify your margins, and understand the price of substitutes. You need to be able to build a solid financial plan in order to get the attention of any investor and to persuade them to invest in your business, idea or project.

Make sure your visual presentation looks good

If you are suing PowerPoint to present and pitch your idea to potential investors, make sure that all your slides are readable. Never land up in a situation where you have to say to your investors ‘you probably cannot read this, but this is what is written on the slide’. If you don’t have the sense to make sure that you slides and presentation are readable, then you more likely than not, do not have the sense or ability to make money for your investors from your project or business idea. Never include too many slides in your presentation. The rule of thumb is one slide for every three minutes of your presentation.

Make sure you know when to talk and when to keep quiet

Following your presentation there will a Q&A session. Make sure you answer the question and only the question. The Q&A session is not a time to pitch your idea. This is the time to be direct and concise in your answers. If your investors want to know more they will ask further questions. Investors get extremely frustrated when they have a question they want to ask you but you ramble on in your answers and they run out of time. Answer all questions directly and succinctly.

In summary, your pitch to business or angel investors should consist of the following:

  • A business plan of no more than 50 pages
  • A business plan condensed into a PowerPoint presentation of 20 slides of less
  • The PowerPoint presentation should be conduced into a 2-page document
  • A 5 minute elevator pitch

Remember if you cannot get through the pitch, you will never get the big payoff.  There is never a guarantee that you will succeed if you follow the tips and advise mentioned above, but one thing is certain, if you do any of the “dont’s”, you are destined to fail with your pitch.

Who are South Africa’s top local businesses?

The inaugural SA Premier Business Awards, hosted by the Department of Trade and Industry (dti), put on show the very best South African businesses in a number of sectors of the economy.

The objective of the awards is to identify and recognise South African businesses that invest in human and technical resources in a variety of projects and promote job creation. The awards were held in partnership with Proudly South African and Brand South Africa.

Trade and Industry Minister Rob Davies stressed the additional value of these awards to recognise and pay tribute to these companies which hopefully is transformed into tangible commercial reputational benefits and in so doing further enhancing their brand and position in market.

 

Trade and Industry Minister Rob Davies
Trade and Industry Minister Rob Davies

 

The Lifetime Achievement Award, the top award, went to business mogul Richard Maponya who is well known for developing a business empire in spite of the limitations and restrictions of apartheid.

Maponya stated that this award was a great honour and at the same time congratulated all the young people who received awards…..” South Africa is making history.”

The winners, per category, were announced as follows:

1. Rural Development Award: Social Change Assistance Trust (SCAT)

2. SMME Award: Malcom – Ezindaleni Hydraulics & Engineering

3. Young Entrepreneur Award: Miss Earth South Africa

4. Women-Owned Enterprise Award: Segakweng Enterprise And Strategy Consulting

5. Quality Award: Coega Dairy

6. Technology Award: Tshwane University of Technology

7. Green Award: MTN SA

8. Media Award: Talk Radio 702/567 Cape Talk

9. Proudly South African Enterprise Award: G.U.D Holdings

10. Most Empowered Enterprise Award: MTN SA

11. Investor Award: Nestle (South Africa)

12. Manufacturer Award: Powertech and Bell Equipment Company SA

13. Exporter Award: Abagold and Saab Grintek Defence

14. Lifetime Achievement Award: Dr Richard Maponya

Anthea Davids-Thames, executive director of Social Change Assistance Trust (Scat), was ecstatic to receive this acknowledgment for all the work they have done in contributing to rural development. “We are proud as an organisation in terms of our contribution to our beloved country but more so proud of the communities we support,” she said.

 

More entrepreneurship encouragement

Davies stated that these awards were a combination of previous award ceremonies, and also that these awards and accolades can assist to inspire considerably more entrepreneurial efforts for the entire country and society.

As many as 159 entries were received and were assessed by a 12 member panel consisting of a variety of role players from business and labour in addition to the Department of Trade and Industry.

The fifth iteration of the Industrial Policy Action Plan (IPAP) is going to be unveiled next week and will outline government’s intended plans to industrialise the South African economy. IPAP now falls under the New Growth Path, an economic framework for 2010-2020, with the primary goal and objective of creating employment.

Source: mediaclubsouthafrica.com

R2.5bn investment for new FET college campuses

An amount of R2.5 billion is planned to be allocated for the refurbishment and building of new campuses of Further Education and Training (FET) colleges over the up coming three years, President Jacob Zuma revealed.

“In keeping with the strategic goals of the National Skills Development Strategy III, which incorporates the growth and strengthening of public [FET] colleges, the National Skills Fund along with SETAs are going to allocate R2.5 billion for the refurbishment and construction of new campuses of FET colleges over the next three years,” Zuma said at his skills development summit with FET college principals.

The summit was actually a platform for FET college principals to interact and deliberate on the central role FETs enjoy within the country’s skills development strategy in particular, government’s new infrastructure development priority programme.

 

President Jacob Zuma

Additional information on the project is going to be made available from Higher Education and Training Minister Blade Nzimande as part of his budget vote speech later this month.

Principals from all 50 FET colleges took part in the summit, who manage 264 campuses nationwide, along with the chairpersons of college councils and deputy principals.

Delegates tried to deal with the existing level of skills development and exactly how the country could possibly provide the scarce skills that are essential to make the comprehensive national infrastructure development programme a success.

The meeting was also attended by ministers who happen to be members of the management committee of the Presidential Infrastructure Coordinating Commission.

Zuma re-iterated that whereas universities and universities of technology were crucial, FET colleges happen to be in the same way important. He called on society to modify their mind-sets to allow FET colleges to turn into institutions of choice for a large number of young adults, to ensure the country could attain the necessary technical skills.

 


“Universities are necessary in any economy however the illustration of successful industrial economies such as Germany point to the value of vocationally-based training, based on an apprenticeship model. This kind of vocational focus makes it possible for the development of a strong manufacturing base and productive economy,” he stated.

He emphasized the necessity to tackle head-on the triple challenge of poverty, unemployment and inequality, adding the fact that education and skills development happen to be the best tools in accomplishing this objective.

A confident Zuma pointed out that the country currently has a good plans in place for significant economic development and job creation.

The New Growth Path framework was launched in 2010 with a framework that sets the creation of decent work opportunities as the central economic goal of government.

Government has revealed the sectors where jobs can be created on a large scale, including:

* infrastructure development
* mining and beneficiation
* agriculture and the processing of farm products
* manufacturing
* green economy
* tourism and high level services; and
* the knowledge-based sectors of the economy.

 

 

Zuma revealed a significant and bold infrastructure plan for the country’s economy during his Stae of the Nation Address. .

The infrastructure plan encompasses the expansion of ports and rail-lines; modernising the road networks; the construction of dams and irrigation systems, power stations along with renewable energy plants; laying of transmission lines and broadband within the country; in addition to expanding the building of schools, hospitals and universities.

To date, seventeen significant integrated projects have already been finalised and the implementation will now commence. The relevance of FET colleges in the infrastructure development project cannot be overstated.

“The construction, maintenance and operation of infrastructure along with the operation of assets have to have the types of skills that FET colleges are well-equipped to provide… however for FETs to achieve success, they need to be more effective and better-performing, graduation rates will have to rise,” he explained to the principals.

Source: BuaNews

Spending on education continues to increase in South Africa

Finance Minister Pravin Gordhan

 

South Africa’s spending on education is growing with the help of Finance Minister Pravin Gordhan allocating R207-billion to the sector for 2012/13, along with forecasts that this could possibly increase to up to R236-billion over the upcoming three years.

Gordhan explained that provincial education spending is most likely to grow by 5.9% over the next three years, from R169.9-billion this year to R183.8-billion in 2015.

 

Student financial assistance for no-fee schools

 

The government is going to also spend in excess of R18-billion of the money towards increasing learner subsidies for no-fee schools and broadened access to Grade R.

South Africa’s education authorities point out that learner overall performance in literacy and numeracy continues to be an issue, as revealed by the national assessment of grade 3 and 6 learners carried out this past year.

The assessments determined trouble spots in each school and made it possible for tailored interventions to be made, with R235-million put aside in the Budget for this purpose.

R850-million for university infrastructure

 

Approximately R850-million has been earmarked specifically for the improvement of the country’s university infrastructure, as well as student accommodation facilities.

The National Student Financial Aid Scheme, which has assisted poor students at tertiary institutions with loans, will get in excess of R17-billion over the next three years.

A Green Paper on Higher Education, published earlier this year, contains commitments by the government to construct two new universities in Mpumalanga and the Northern Cape to cope with the difficulty of space at the country’s tertiary institutions.

Despite the fact that he made no reference to the project in his budget speech, Gordhan did inform reporters that work was at this time at an advanced stage, stating that R300-million was provided in the fiscus for planning and design of the universities. Additional financial commitments will be made as the projects get off the ground.

Early childhood development programmes

 

An additional R1.4-billion is going to be invested over the next three years to help and support early childhood development programmes along with the implementation of the community-based childcare and protection programme throughout the country.

This will boost access to early childhood development from the current 500 000 to 580 000 children, with an emphasis on rural areas, with targets that more than 10 000 young adults will likely be employed resulting from the programme.

Source: BuaNews