P. Edronkin

How to organise a new group, company or association (IX).



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"In many cases, lenders set as a condition to give you the money that you shall give them a piece of the cake, usually in the form of a percentage of future profits or capital, but sometimes, such conditions extend to political power within the organisation as well.

You should be very careful with this. If you sing a draconian contract which might seem perfectly reasonable at one given point, you could jeopardise your future success in a terminal way.

Artists know this fact very well: sometimes, producers leave the singing artist with small percentages of total profits. In some cases, musicians just see a mere 10% of the profits that their music is really producing, and at the same time, remain contractually married for almost their whole lives to such business partners.

The difference between spending and investing lies in the fact that spent money equals consumed money, much like a daily ratio of food, while, investing means building up value in order to produce more money in the future.

Ironically, the moment in which organisations most need external money, is also when it is the hardest to get it for a very simple reason: new organisations are unstable, and lenders of all kind soon realise that there is a high risk related to them. Thus, they are afraid of making a bad business and never receiving their money back, or at least, loosing a substantial amount of it.

If you want to obtain money from them, you must make a convincing presentation of your ideas, plans, and viewpoints, while at the same time, remain prepared for a negotiation, because their first offer would almost surely be a tentative one, based on the maximisation of their profits and minimisation of their risks.

It would not be necessarily their only offer, or their first and last one. Thus, if you learn how to negotiate, you will learn to understand your interlopers and get the most from the process."


A Gea shelter under construction.
Starting new projects, is one of the strategic needs of
any serious corporation that seeks long-term growth.





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