September 7, 2009
Raising Foreign Capital
If ever you’ve encountered money problems with your small business and though that it’ll be a failure, well raising foreign capital might just be the solution you’re looking for. Micro enterprises also need an extra infusion of cash. There are four ways of raising foreign capital.
One feasible option is franchising. Franchising your business can raise capital by selling the rights to your business, name, practices, and methods. It’s sort of selling a replica of your business and the method to reproduce your success. In return, you receive a cash payment up front that ranges from smaller to substantial amounts of money.
What’s more beneficial with this raising foreign capital is that you can receive a percentage of the franchisee’s revenues. How the franchisee operates, how and what they advertise, product quality and where they get the supplies are within your control.Franchising has been tested and proven successful. However, to familiarize the terms and conditions in raising foreign capital, you must seek the advice of an attorney experienced in franchise law.
Then there’s the less complicated way of raising foreign capital which is licensing. It’s done by selling the rights of either a product or a business name. More often than not this is done since licensing associates but does not compete with a certain company. In this raising foreign capital, the company sells more products; the designer receives a percentage of those sales.
An individual product may also be licensed by selling exclusive rights to a geographic area or industry or the rights can be nonexclusive. You can demand a minimum level of sales to maintain the licensing agreement. Payment can even be made in a staggered amount.Licensing arrangements with companies for your product can be provided for by attorneys and agents or you can contact companies directly. Be vigilant to those who promise that they will market your product for you in exchange for a certain amount of money.
Also, raising foreign capital can be done through selling off company assets. This is a tried and tested raising foreign capital option. Say you have a property that you don’t find essential but someone else does, you can sell it off if it doesn’t suit your company profile. If you have intellectual property such as patents, formulas, customer lists, or trade secrets you can also use this as a means of raising foreign capital.
Lastly, you can approach potential vendors or suppliers to consign their products to you. An agreement is signed and you don’t have to pay the vendor until the products are sold from which you get only a percentage of the sales.
There are numerous raising foreign capital that are already proven but the success of your business through the use of these methods still depend on how you fit it to your company’s focus. Know each option by heart and determine with which you’ll find achievement in your venture.
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