The Pit - IMI Trust

…actually, no.

1318 days and counting… there must have been a lot of bugs …

A trip to the dentist was in order. It has been some time and a cracked tooth made up my mind to visit. I was not that concerned as I already had root canal work done on this culprit.

This was the first time I had been to this dentist. It met the mandatory criteria - looked clean, close to where I live, attractive looking people inside and I had heard some good things from friends of mine.

The girl at reception were very welcoming and asked me to fill out a questionnaire. One of the questions was interesting. “Do you feel nervous when you go to the dentist?” Not being afraid to admit it… I ticked ‘YES’. Not long after my name is called. As we go up the stairs, the dentist gave my form a quick read.

Within seconds of sitting down, he starts stabbing inside my mouth *OWWWWW!!* was my first thought. ‘Thanks for helping me to settle my nerves!’ was my second thought.

After my yelp he decides that it is not able to be fixed and he needs to take out half the tooth to have a look. But just to make sure, he does an x-ray. Red flags and alarm bells. A course of action decided before full information is gathered. Is that usual?

So he then explains that what he can do is…

1) Take out half the tooth and see if it can be fixed. He thinks it is ‘unlikely’ and a ’small possibility’ that it can be fixed. If it can, he will fix it and set a crown on it.

2) “If it cant be fixed, we take the tooth out, shave down the teeth next to them, place caps on them and then put a bridge in.

and the last option, which he didn’t favour at all…

3) Extract the tooth and leave a gap.

I have only been sat in the room 5 minutes. By this stage, I am thinking “what the %$&*?”

I am feeling pain, visualising gaps in my mouth and thinking about eating without a tooth, or the damage it will do to the teeth on either side. Also I am thinking, neither of the ‘preferred’ options sound cheap.

Nerves have turned into flat out fear.

Then he says, ok… now I am going to take out this side of the tooth and see if it can be fixed. I am thinking by this stage I am being rail roaded down a path in which I have minimal information of cost, procedure or other options.

I stop the dentist and ask him can he outline my options and the cost of them. I explain I have meetings today and I need my mouth for those meetings. Not those kind of meetings. He says it’s OK it will only take 30 minutes max.

“I am happy to book another appointment”, I tell him.

The dentist kindly starts outlining the options he was trying to take me down today with no information, very minimal explanation and providing me with the feeling he is selling me and not serving me. In other words, I was getting the feeling it was ‘not’ the best path for ‘me’, but the best path for ‘him’.

The two options were $2,000 and $5,000 for a tooth I had already had root canal on. No information, no explanation, no rapport established and no time to think about different options and a form clearly stating that I am nervous. This hard-selling dentist has turned me right off going to this practice. It certainly didn’t provide any assistance in calming my nerves next time I see a new dentist.

In fact, I will be flying to Sydney next week on business and have booked to see a dentist I do trust.

Maybe dentists are being trained on sales these days. If they are, they should definitely invest time in understanding trust, rapport and ability to explain information in terms normal people can understand. Also, the should become aware, that if someone clearly states they are nervous, railroading them into an expensive path is not the best course of action.

From a business perspective, it highlighted how important trust is, and giving people the time to think. That trust can easily be developed through balanced information, and an understanding of someones personality. If you need to hard sell and railroad people into your product, then get a new product.

Also in listening to my own thoughts, I started to notice how I began generalising an industry because of one persons actions, and by the end of the day 5 other people knew about my experience.

And now I write about this experience in this post which will be read by over 1,000 people. This the impact we can have each day in our business. Positive or negative.

Macquarie Bank is down 20% from it’s all time highs a fortnight ago.  This was mainly caused by concerns on the creditworthiness of consumers taking out Sub Prime loans in the US.  However, you shouldn’t cry for the bank here.  This is the reaction from Jim Cramer on CNBC about the market in the US at the moment.  Armageddon!

With the ASX 200 and the Dow Jones Index consistently achieving new highs, investors have now started to seek investments with higher risk and higher growth potential. Many sophisticated investors realise that this occurs before companies hit a stock exchange.

Sophisticated Investors, Retail Investors and Professional Investors are now seeking to invest in the companies of tomorrow. By investing in start-ups or early stage businesses they can reap large rewards if the companies lists or is bought out.  On the flipside, there is every chance the company could fail.

Why would they do this, when everyone knows the risk associated with companies in their infancy? Risk vs Reward is the simple answer. 

Investors are now looking to allocate risk capital to these companies as part of their portfolio.  When looking at asset allocation in a traditional portfolio, you tend to see cash, property, conservative investments, growth investments and aggressive investments.  Typically, early stage investment is seen as aggressive but in reality it sits in its own band even higher.

The rewards are great but the chances of losing money are just as high.  Which is why only risk capital, or in layman’s terms, money you can afford to lose, should ever be placed in these investments.

Even only as far back as 3 or 4 years ago, this kind of investment was only available to the wealthy who acts as business angels or venture capitalists.  Today, companies such as the Australian Small Scale Offerings Board (with whom IMI Trust is a member of) is making it easier for investors to gain access to these type of opportunities.

Early stage investment is an exciting prospect but carries heavy risks.  Investors should carry out their due diligence, ask questions, find out as much as they can about the Company, its Management Team, the Market, the Competitors and the Marketing Strategy for success.  By analysing these aspects, an investor can see if the Company is doing its best to be successful.

And by success, this can be defined in a number of ways.  As an early stage investor, a good result is a company takeover or a public listing.  Today’s penny dreadful may be tomorrow’s dollar dazzler.

Companies are looking for early stage investment but do they deserve the capital from investors?  Many don’t but some do.  To learn more, about emerging growth companies looking for early stage and expansion capital, click here.  Or if you have any stories to tell about early stage investment, please tell us here. 

There is a famous saying in hospitality:

“The answer is yes, now what’s the question?”

The sentiment behind this is that the customer is always right.  The customer has a need that requires fulfilling.  There are many companies that follow this customer-orientated ethic.  Starbucks is one, as no drink is ever not made no matter how crazy the concoction may be.  If that’s the way they want it, then that’s the way they get it.

In the corporate world, and in particular financial services, there are several companies that try and maintain a business model that revolves around this attitide. However, at which point does corporate responsibility take over?  In many instances in business the customer is not the best person to ask for direction or opinion. In fact, they are absolutely the worst person to ask.

Customers should have an end goal and how that end goal is reached should be down to the service provider on how it can be best achieved.  This is the basis of good business.  It’s a Win/Win situation.

There are some business relationships that, from the beginning, that it is clear that it is going to be a Lose/Lose situation.  Why do we enter these?

Have you knowingly entered any of these before and has the outcome been different to how you expected?

Imagine if you woke up stupid every day, with a hunger to learn, grow and evolve! That is the difference between the minds of innovators and routine.  Actually, it would probably be immensely frustrating that you have to start from scratch every day but in essence, innovators are those who wake up looking to pioneer.

Innovation is about looking at problems or gaps with new eyes.

When News Corp saw computerisation take hold they revolutionised the newspaper industry by streamlining and templating the whole process.

When Apple and Steve Jobs were being a thorn in the side of PC manufacturers Apple were busy conceiving how the music landscape would be changed forever.

It is interesting to look at the increase in Apples share price when Jobs is there… and when he is not.

1986 to 1998 Minus Steve Jobs - 120%

1998 til today with Steve Jobs - 1240%

Anyone else notice the difference innovation can make? What inspires you?

Time to get things off our chest…

It is our experience to steer clear of search engine marketers who boast badges with the Google AdWords Professional qualification.

Let’s be clear.  We, at IMI Trust, love Google and so should you.  It is the reigning champion of search and rightly so…however…

The Google AdWords Professional qualification can be earned if you, as a marketer spend $1,000 per month with Google.  Some people spend much more than this in a day.  Not because they are clever, or skilled in search engine marketing, but because they see the value in this type of advertising.  As they have spent that dollar value they qualify as being a Google AdWords Professional.  Can you begin to see where the issue lies?

There is no qualification in place and people can claim to be an endorsed professional.  This fails in a number of ways.

1. Punters that need help in Search Engine Advertising are looking for reassurance and expertise.  The Google AdWords Professional provides neither, though the name alludes to the fact it does.
2. Professionals who are great at Search Engine Marketing have more trouble finding work because they are competing with thousands of clowns who don’t know their KPI’s from their CPC’s.
3. Google is diluting its brand by offering this nonsense award.  Google do have other qualifications that are far more meaningful but as this is the easiest to achieve because you just have to spend dollars.

We are not against people becoming search engine advertising experts but if they claim to be experts there has to be more to it than that.  Which reminds me…I’ve got an email to answer about claiming my Fijian Medical Degree.

That would be a common sense play.  Who knows what will happen next?  Apart from a glut of Hedge Fund managers jumping off building tops because they didn’t know when to hold ‘em or when to fold ‘em.

Anyone have a spare $11bn?  Check down the back of the sofa.

Capital Raising, Venture Capital, Business Angels and Private Equity have become flavour of the month in Australia.

The reality is, for businesses looking to raise capital, it can become a nightmare for the unsuspecting owner. You always read about the successful ventures but rarely do you hear of about the challenges associated with raising capital for your business. For other business, who utilise business factoring services, it is their opportunity to utilise an alternative solution. 

When it comes to capital raising, most business owners believe they have 3 places to go: Banks, Angels and Venture Capitalists. Few people realise there is a 4th way to go if you want to raise between $250,000 and $5m (without a prospectus).

Below is a snapshot of some of the issues related to each.

Venture Capitalists
There is a reason they are called Vulture Capitalists. They generally look for small to mid size companies and traditionally Venture Capitalists will value your company on its current value (prior to growth following funding), and then look to take a stake based on that value. Some Venture Capitalists, will also look to play a role in the management of the business. It is a coin toss whether this becomes an asset or a liability.

This path is fraught with problems especially if you are looking to retain control of your business. With one business we worked with after funds were raised through a Venture Capitalist, personal attitudes and business differences surfaced and the owner was forced to leave the very organisation they started.

Business Angels
Business Angels could be ideal for your business if the Angel brings a wealth of experience, contact or resources to the table but again the problems you face with Venture Capitalist’s, you are likely to face with Business Angels. You lose control and possibly a lot more.

Banks -
Although the most common option for people, you should only really go to a bank if you a desperate. This is why…

1. Do you enjoy putting your own personal assets at risk?
2. Do you enjoy paying interest for the life of the loan?

Of course not. When raising capital the questions you want to be asking are…

1. What percentage of the company am I willing to offer? How are the shares going to be split up between the current owners and stakeholders.
2. Is your business structure investor friendly, as well as business owner friendly
3. If you are utilising the banks, are you willing to put your personal assets on the line
4. Do you want to retain control of your business, or are you happy for a 3rd party to have an influence?
5. Have you put in place a strong management team?
6. How unique is your offering, and what is your realistic potential for growth?

All of these questions are important, and you should definitely know the answers before you approach any organisation to assist you in funding the growth of your business.

These are the questions you need to answer when looking at the 4th way for you to Raise Capital for your business

This path offers some unique benefits…

1. The capital raised is interest free
2. Doesn’t require you to put your home up as security
3. Allows you to maintain the majority shareholding in your business… allowing you to retain control of the future direction of your company.
4. Allows you to crystalise the value of your business, which is recognised by the markets and considered as an asset on your balance sheet
5. Provides an investor-friendly environment allowing your investors the opportunity to sell their holding if they desire
6. Ensures that you are compliant with ASIC’s rules and regulations. Most people dont realise the legal mine field and potential issues if you try and do this yourself… and get it wrong. Let me provide some insight… a $20,000 fine, 5 years jail, the company wound up… and then it starts to get ugly from there.

Our focus is to help entrepreneurs realise the aspirations they have for their business!
What this means for you is that IMI Trust is able to facilitate debt and equity funding for your business growth, expansion and acquisitions.

To explore the commercial potential of raising capital for your business click here.

Lack of sales?  Lack of stock?  Market is too niche?  Too much competition? 

Companies can go broke because of one or all of these issues.

However, how many fail because of middle-management with a can’t-do attitude?  Many we suspect…