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Marketing – the science of making money! No matter whether it be shipping or any other industry, scientific marketing can guarantee to increase the profit of any company in any industry! And we are going to explain how and why Marketing will work – for you and your company – in the coming weeks. For example - there are only 3 ways of increasing your business: increase your number of clients increase your volume of transactions increase your price for each transaction And in any marketing – be it your company, its products/services, or even yourself there are only 3 main points to consider: the message. Is your message the same as all your competitors – wrong! Every company has a difference, you only need to find it. the market. The more you can define your market, the better your ultimate results. the medium. How and when you deliver the message is as important as what you are saying and to whom. Get them all right and it is close to impossible not to succeed in increasing your company’s profits. Over the coming months, we will look at each of these points, explain them more clearly and show you how this can affect your business – in a very positive manner. FREE MARKETING ADVICE * MARKETING NEWS * PRINCIPLES OF MARKETING Who are we? We are an international marketing and communications group focusing exclusively on the global shipping community since 1990 ! http://www.asiamarketing.biz As our name implies – maritimemarketing News – we have both European and Chinese management, have been operating in Hong Kong since 1984. We therefore have a good appreciation of both Asian and western business cultures and multi-lingual capabilities. On a regular basis, we will be introducing and discussing the principles of Marketing – the how and why of marketing, as it applies to you and for anyone who takes the time to listen and act! But what we will tell you from the start, this is NOT a magic formula. To be successful in anything takes willpower, effort and an investment. An investment in time to study and practice the principles and ideas you will find on our site and the courage to act - not just to read and wait for things to happen. In the coming months we will prove to you that “Results Based Marketing Principles” will work for any shipowner, in any country, regardless of language or cultural differences. Marketing advice on how to increase employment of your vessel, how to maximize your daily rates and how to market your company to financial institutions – be it for ship acquisitions and expanding your company in general. ************************* The 7 forgotten principles of applying for finance of any kind Borrowing money, financing anything you want, is easy. If you know how! The lender wants to lend his money to make more profits and the borrower wants to take the lender’s money and make more profits. Both people have the same ultimate aim and each wants to use the other’s assets and desires to achieve his own goal. If you keep the above in mind when making any application for funds – finding finance can be easy. If the first step is understanding both sides – the next most important step is to take time and effort in the preparation of your application for funding. Taking more time and effort in the planning and preparation of a well structured and pro-active presentation – will result in a much speedier processing of your application and multiply your chances of success many times over, if done properly. In creating your presentation, there are 7 basic principles which need to be considered and adhered to in any and every finance application. In general, when looking for any financial assistance, be it for acquiring ships, or another company or for developing your business – the more you tell the potential lender about .. 1. your business 2. your plans 3. how you plan to use the money 4. your plans for repaying the loan 5. type and value of any collateral you may have the less questions, some which may be sensitive to your existing situation, the financier will ask later on – that's what we mean by a pro-active presentation. The presentation should be structured in a logical, orderly manner, with a summary of the deal, followed by detailed explanation/comments on the 7 basic principles discussed below. In terms of any serious financial entity, be it bank or otherwise, even private equity money, the lender is always looking for credibility of the borrower in terms of … 1. Past and current financial status. Has he made profits in the past with similar type and size of ships (as in current proposed transaction)? How much equity is borrower contributing to the deal? What is the overall company background, financially and professionally as it is relevant to the proposed transaction. 2. Potential collateral. Apart from ship and charter party contract what potential collateral does borrower have? Other ships, company itself? Is there a Guarantor 3. Professional experience of borrower. Is borrower a real ship owner/operator, a financial speculator, a middle man? Has he ever completed this type of deal before? 4. Management team / operational expertise. Sufficient technical detail to convince lender that ship will survive period of charter and that the residual value will be more than any dollar value liability existing at end of charter party contract. If names of potential class, flag, P+I and hull + machinery insurance companies could be included it would help convince “lender” of borrower's professional integrity. 5. Charterer's/Guarantor credibility to financially complete charter party contract. Who is charterer? What is he going to do with the ship? Where is ultimate cash to pay for financing going to come from? If there is a Guarantor, you need to qualify the Guarantor in terms of his financial situation and ability to back-up any guarantee. 6. The ROI (Return on Investment) is of course also important, but surprisingly, it often comes last in priority, as financiers expect the borrowers to know the market and to understand that the interest rate depends on the “quality of the borrower” (basically all of the above information) as much as prevailing LIBOR rates and, for example, that SME borrowers will always be paying more than COSCO. 7. Business Building. Financiers also like to see a ‘plan’, not just for the single transaction, but for the company. A business plan that shows what they have been doing, why they are making this transaction now and how this is part of their overall plan to grow. In any financial dealings, the borrower should look to build a long-term relationship with a financier, be it a bank, fund or private equity. The way to build a relationship is to be honest, transparent and to start by over-delivering .. this builds trust and as trust increases with each deal, the “lender” party ask for less, the transactions are completed quicker and the “borrower” uses less and less of his own equity. Remember, to be a successful businessman – you need a relationship of trust and mutual respect with at least one, preferably several friendly bankers/financiers! ************************** 5 "C"s for applying for loans - It is important to remember that banks and funds (with few exceptions) lend money not against your assets (they are for collateral purposes only) .. they lend against a solid, demonstrable cash flow. Banks and funds are not, generally, in the shipping business and if they have to repossess a ship .. it is a big problem for them. Mostly they are not set up to deal with ship operations, technical management etc., which is why they carefully consider your cash flow in making their decision on your loan application. All financiers, no matter banks or financiers or funds, judge applicants for loans on the following criteria: 1.Character Does the borrower have a reputation? In the shipping community, his own community, his home base? Does he have good managers in all sectors able to deal with the many aspects of a shipowner’s operation? Is there a track record of performance, of profit? Is it a transparent management, can the business operate without the owner? What trade, market sector does the company operate in? Does it control or contract out its operating, crewing, technical management, charter broking? Any financial institution wants to do business with a company that shows integrity, professionalism, realistic ambitions and a strong commitment to its business. 2. Cash Flow A major consideration for any financier, as it is how the loan will be repaid. The quality of the charterer is is often brought into question as they control the cash flow of the company - chartering a ship to yourself, because you also have a manufacturing plant, factory or mine, is not an advantage in the eyes of the lender.. You also need to demonstrate your knowledge
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Ferdi Stolzenberg is author of this article on Maritime strategic consultant. Find more information about Maritime strategic consultant here.
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