Land for Ecotourism in Maho, Sri Lanka

A once in life time opportunity knocks on your door in the form of a prime land that can be developed as Ecotourism Rest or Eco Lodge in the scenic town of Maho in North-West Sri Lanka.

This prime real estate spawns an area about 19.86 Hectares (about 49.7 Acres). It is situated at Hevanala Yaya, Thalangedara, Maho in Kurunegala District of North-Western Province of Sri Lanka. It borders Nikaweratiya - Madagala Road with a road frontage of around 900 meters. Trains operated by Ceylon Government Railway saunter in the southern edge of the land traversing towards Trincomalee and Batticaloa, towns that are located in the Eastern sea shore. In fact this land is in between two railway stations: one is Maho and the other is Yapahuwa.

The historic city of Yapahuwa was once the capital of Sri Lanka during the 13 Century. Tourists flock to the city in their thousands to view the olden city and centres of tourist attraction such as Kikawala Rock Cave Temple that displays evidence of amazing volcanic rock formations. You can easily access the land travelling from Colombo, Capital of Sri Lanka over fully carpeted road that reaches the land and far beyond. From Colombo you travel 160 km to this picturesque land.

The land is endowed with varieties of well grown fruit trees such as coconut, mango, cashew, wood apple, banana and many others. Moreover it is forested with about 650 teak trees of about 6 years old planted along the boundaries. A meandering and beautiful landscape connects you to rock formations, scrub jungle and a cosy environment of lush greenery. Ground water is available throughout the year in three large ponds that collect rain water. Additionally, two large agro wells provide irrigational water during summer and two wells sprinkle drinking water throughout the year. Existing building structures include a two-bedroom bungalow, two small houses, an office as well as a guard room. There is a weigh bridge currently not in use but serviceable.

Ecotourism

Surrounded by tropical greenery, this property has potential to be developed as an iconic Eco-friendly Tourist Rest or Eco Lodge. One of the norms of Ecotourism stipulated by “The Ecotourism Society” is that places under Ecotourism banner must conserve the environment and at the same time must improve the welfare of the people living in and around the area. This land definitely passes the test of “conserve and improve” concept and qualifies as a prime spot for development as Ecotourism Rest or Eco Lodge. Finance for Ecotourism is generally granted by local and international banks.

Business Opportunity

1. A prospective investor has to buy this land in the first place and thereafter, set in motion a chosen Ecotourism Rest or Eco Lodge construction programme

2. A prospective buyer can buy this land and hold it as an investment asset before re-selling it to any prospective developer bent on these lines.

Inquiries are welcome from prospective buyers, investors or Ecotourism property developers for a price quote. Get a piece of action in buying this plot of land in Maho , North-Western Province of Sri Lanka and experience the real pleasure of being part of ecology.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Land in Nallur, Jaffna for Development

A large plot of land is available in Nallur, Jaffna for property development. This plot of land can be converted into a mixed development consisting of residential apartments, theme park, offices and shops.

This land is of almost rectangular shape with an extent of 3,687 square meters. In Jaffna parlance the extent is stated as 14.35 Parappu. Located in the Point Pedro Road , the land can be easily accessed travelling from Nallur Kandasamy Kovil towards Point Pedro. Passing Sankilian Road Junction the plot of land is for your view on your right side. The entire length of the land is abutting the Jaffna - Point Pedro Road. Originally this land was part of Sankilithoppu. Nowadays it is referred to as Pandarathottam due to the fact that it faces Pandarakulam across the road.

Business Opportunity

1. A prospective investor has to buy this land in the first place and thereafter, set in motion a chosen development programme. Most banks are willing to finance such real estate development

2. A prospective buyer can buy this land and hold it as an investment asset before re-selling it to any prospective property developer later on.

Inquiries are welcome from prospective buyers, investors or property developers for a price quote. Get a piece of action in buying this plot of land in Jaffna which is poised to experience large scale economic and infra-structure development in the near future.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Colombo is gearing up for Private Banking

Huge potential for private banking cannot be dismissed in Colombo, Sri Lanka. Accumulation of wealth in the hands of the top echelon has given added fillip for the need of specialised services such as private banking.

Private banking deals with financial advice and management of money, investment and assets belonging to high net worth clients (HNTC). These clients may be wealthy individuals or big corporates. In the case of individuals private banking plays purely the role of wealth manager. A private banker to a HNTC provides advisory and management of wealth including trust services. These trust services include wills and inheritance, pensions, taxation, and advising and managing of charity and donations. Corporates, on the other hand do not require these services as they have departments within their corporate office to deal with these discreet matters. Both individuals and corporates look for common private banking services including money management, investment management and asset management along with financial advisory. They also seek estate management dealing with management of lands and real estate, custodial services dealing with scripts and bonds and funds transmission domestically or as cross border facility. Few customers might require emergency or bridging finance on fully secured basis. Some of the large private bankers such as Coutts of UK and Northern Trust Corporation of USA provide every conceivable service under the banner of private banking.

Private banking thrives in countries that have financial centres, commercial hubs and industrial zones. Moreover, private banking is in demand where accumulation of capital is so much skewed that only a minor percentage of population possesses immense wealth.

Colombo as financial centre of Sri Lanka is fast becoming a business, financial, commercial and industrial centre. Almost all the HNTCs have offices or residences within the municipal limits of Colombo.

Business Opportunity

1. Existing private bankers can open a branch or window in Colombo to share in the growth momentum taking place

1. Corporates or wealthy individuals can team up to establish a new private banking office in Colombo to get plum and juicy clients, who are wealth boomers but hitherto not exposed to sophistications of private banking but are willing to be on board nonetheless

Inquiries are welcome from prospective bankers, corporates or wealthy individuals who wish to either open a branch/window or form a brand new private banking office. Get a piece of action in private banking in Colombo Financial Centre.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Invest in Asset Management Companies in Colombo

Asset Management is a thriving business in Colombo Financial Centre. You can invest in the equity capital of an asset management company without much hassle. Your investment can be recouped within a short horizon.

There are 18 asset management companies registered with the Securities Exchange Commission of Sri Lanka (SEC). These companies are broadly grouped under Market Intermediaries and named as “Investment Companies”. These companies are permitted to handle investment management, investment advisory and associated activities. Investment management is where the company manages client funds on a discretionary basis. The asset manager makes up his own decisions in investing in stocks and bonds in accordance with an agreed investment strategy but without reference to the client. Investment advisory on the other hand enjoins non-discretionary management where the asset manager is permitted to advise his client and on consent being received he can invest in the recommended stocks and bonds.

All these asset management companies have two types of funds: One relates to own capital funds contributed by the owners by way of equity. Another much large pool of funds relate to the clients’ money which is also referred to as portfolio management be it discretionary or non-discretionary. Generally the percentage of own funds ranges between 5 to 10 % of the invested funds. Portfolio funds form the bulk of invested funds. The 18 asset management companies manage close upon one Billion U S $ in their portfolio funds.

These companies take the worry of financial affairs out of the clients unto themselves. They use professional skills in managing funds belonging to clients, who may be individuals or institutions, big or small, domestic or foreign. They manage a wide ranging portfolio of investments, in equities, fixed income or convertibles (debt that can be converted into equity). They tend to analyse investment needs of clients and structure a portfolio strategy that translates into a perfect match for clients risk/return profile. For example, in the case of a risk-averse client, the portfolio will have more fixed income: i.e. Treasury Bills and Treasury Bonds while for a risk-taking client more weight will be given to high growth equities. It must be emphasized that the investment strategy is formulated by asset manager only after consultation with clients and after obtaining their agreement to this effect. Investments made by asset manager would be in accordance with the agreed strategy and none else.

Business Opportunity

1. You can invest in the equity capital of existing asset management companies

2. You can also obtain approval as asset management company from the SEC; for this purpose you can use companies that are already floated but await capitalization from you

Inquiries are welcome from prospective investors who wish to have a piece of action in Colombo Financial Centre a star performer in the region. You can recoup your investment in equity capital of asset management companies within a short horizon depending on the market movements.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

How to Value Business before Buying it?

When a seller quotes a price for his business it is known as “Ask price”. In response a buyer offers his price; this is known as “Bid Price”. After negotiation both parties agree at a price to close the deal. In order to make a bid price a buyer must do a valuation of the business he is interested in. There are six methods of valuing a business before buying it:

1. Asset Value: This is the easiest method in valuing a business. Underlying assumption in this method is that the business is a going concern. You tally all assets tangible and intangibles, fixed and current to get the total value. In the case of fixed assets either you can take the value net of associated depreciation or on replacement value basis. Current assets are appraised generally on realizable amount basis. Intangibles such as goodwill can be re-estimated. From the total assets value you must deduct outside liabilities to arrive at net value of assets in a business. Although the method is a popular one, it lacks credence as it does not take the capacity of the assets to generate income in the future, which is more meaningful to the buyer than just jotting up assets. Moreover, small businesses as well as service providers are very lean on assets but fat on earnings. Hence, asset value may not be representative for these businesses. On the other side of the coin, large scale industry is asset rich but whether they generate adequate returns on assets employed is a moot point

2. Liquidation Value: In contrast to the asset value which is based on going concern, liquidation value takes the business on the footing that it is a gone concern. Liquidation can take place in two ways: orderly or forced. An orderly liquidation takes time and the value cannot be estimated in a brush stroke. Forced sale can take place in near term and it is possible to tug in on likely price. Whichever the manner of disposal, you should ensure that the assets are valued at realizable value net of any expenses connected thereto

3. Earnings Multiple: Since buyers are more concerned with what they can get from using assets, earnings multiple as a method of valuation is used widely in business buying transactions. Generally after tax earnings is considered as the bench mark figure in this type of valuation. You take 3 to 4 years of after tax revenue and average it. Thereafter, you can multiply the figure with number of years purchase. If the average after tax earnings is US$ 100,000/- and the multiple you are conceding is 6 times then the bid price is parked at US@ 600,000/- Earnings multiple method suits well in retailing, wholesaling and medium to large businesses. It is important that you use earnings multiple where the existing business is low geared, that is, it does not use much of borrowed funds. Additionally, you must ensure that depreciation charge in the business is not heavily loaded. A litmus test to opt for this method is to compare the cash-flow with earnings-flow. If there is no substantial difference between these you can choose earnings multiple; otherwise select capitalizing cash-flow method discussed below

4. Capitalizing Cash-flow: Cash-flow is different from earnings in that it ignores accrual accounting concept and non-cash expenditure. It pitches straight on rendering of inflow, outflow and the resulting net flow. Your net cash-flow is what remains in your hands when everything was said and done. There are two ways of arriving at cash-flow for valuation purposes:

4.1. Net-flow + Depreciation

4.2 Net-flow + Interest + Tax + Depreciation (Alternatively known as “EBIT+D” which means Earnings before interest, tax and depreciation)

Once you arrive at a figure under any of the above two methods, you can capitalize cash-flow by using a capitalization ratio chosen by you. Let us assume that, the cash-flow is US $ 150,000/- capitalization rate is 20 % then you can work out the business value as:

US $ 150,000 divide by 20 and multiply by 100 equal to US $ 750,000/-

5. Market Value: Alternatively known as Rule of Thumb or Comparable Business, this method focuses on the market and how it responds to the value proposition of a particular business. You can determine market value in a number of ways. One way is to find out the sum in which similar business was sold and take that as the market value. Another method is to search in the business press for similar transaction that took place during the last 3 months. Yet another method is to estimate the amount the market can bear and after making suitable adjustments treat that as bid price

6. Cosmic Value: At the end of the day, what matters to you most, is the cosmic valuation of the business you intend to buy. Every business has cosmics surrounding it. You have to evaluate the business, its assets, its name, its logo, its customers and its process to arrive at its cosmic valuation. Afterwards you must assess whether incoming business with associated cosmics would enhance your wellbeing or retard it. Many decisions made without considering the critical role of cosmics end in bad note. Why should you have a millstone round your neck?

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

Questions Buyer must ask Seller of Business

Imagine you are meeting a seller of business today, what is the first question you will ask him. Oh yes, “what is the price” is the one you on your lips even before you settle down for a talk. This puts the seller in straitjacket, resulting in bad cosmics between you and him. Sellers are miffed over why buyers do not ask a whole heap of questions about his business and how he is going about. Here is my checklist of questions buyer must ask seller of business and in that order.

1. How the market operates? Get the broad picture initially by learning about the market place of the business, how its product is facing up competition. Get the competitor profile, growth rate in the market and whether the business is beating the market or just following it. You can also find out latest market trends

2. Who are customers & suppliers? Ask the buyer to talk about his customers and suppliers. Some of them may be known to you. It is better to dwell little more time here not least because you want lot of names but to assess how critical they are, in terms of volume and value. Also you must ask buyer about credit terms offered and obtained. Will these terms continue to be in force once the business change hands is yet another clarification you need

3. Who is the staff? Number of staff, the gross emoluments and their experience should engage your attention. Key members and how important they are is also a relevant question. Will the staff be happy to get a new owner? Ostensibly, their cooperation is vital for the sale and transition to new owner. Staff is, in essence, in every business which is of course not saying a lot

4. What is the Bottom line? By now you have got a feel of the business. But one caution: do not fall in love with the business on first sight. Ask seller to trot out numbers in profit and cash flow. Look at the profit; look more on the cash generation. When buyer gives you copies of last 3 years financials pore your eyes over the bottom line

5. External relationship: You can chat with him in ease on the question of his relationship with bankers, revenue and other government departments. There is, as must be expected, marked reluctance on the part of seller to talk about these. Still you must be very diplomatic and see whether any of the relationship is strained

6. What he is selling? Let us be very clear about what he is, in fact selling. You are passing half-way mark now and you get him to tell what is up for sale and what is not. Generally a sale of business involves name, operational assets, working capital, and human resource and so on. You must be clear whether present loan outstanding is to be transferred to you or the seller would extinguish it. Another moot point is the real estate, which may or may not be transferred. In case of lease property, you have to ask him whether it is a transferable one. If the business is located in a supermarket, you should ask about the transfer of legal right to you. In sum, you have to clear legal and administrative issues before you proceed further

7. Prospects after you buy: This is putting the seller in your shoes. After you buy his business what happens to it. How sales, operations, profit, finance will be played out?
How quickly you will go through the learning curve in running the business. How this downtime can be minimized? In as much as you love to get answers to these questions about your running business, seller would tend to be reticent and if egged he would be very brief. You must watch his reaction sharply for any nuances that indicate the business is made only for him and after him it is deluge. In other words you are made a sucker, really

8. Will seller be on board? After the sale is done will he continue to be in the board for a limited period is a follow-up question? At the prompt of any negative answer from him you must conclude your discussion and walk out. A seller must be responsible for what he has vouched all these times and in turn assure you his support. He has to introduce you to staff and outsiders; he has to guide and counsel you. If he is going to vanish on the following day you would better drop this matter

9. Wii seller arrange part-finance of the sale price? This is where seller’s external relationship especially with bankers matters. If the seller is an acceptable person he would be able to arrange part-finance of sale consideration through his own bankers or perhaps financiers known to him

10. Why he is selling? If everything is neat and fine, why the guy is selling his business. Most sellers will cite that they are retiring. Some like to take a long vacation or move out to another state or country. Chronic illness or health issues could be a reason. Sometimes they are selling to settle their children or fulfil a divorce settlement. If the seller is vague in answering this question it must put you on guard

11. What is the price? Instead of wrangling price at the first blush, you ask it as the penultimate question. Definitely his price has padding: he must have added lot of goodwill. Most sellers are too emotionally attached to the business they want a hefty price. Or perhaps this is the only cash earner for him. Whatever the reason behind him inflating the ask price, you must keep your powder dry. Do not say bluntly that the price is too much. Ask him how far he is ready to negotiate so that a matter can be closed in due course

12. How do we take it forward? Never leave the seller without getting his idea about how you and seller take the matter further. He would have his suggestions; listen to these and speak your mind loud. Do not leave with a bland “will let you know”. Go positive and say “let us proceed together”.

The above checklist reflects cosmic arrangement of twelve questions that elicit the right response on which you can make sound decision on buying a business.

Good luck!

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

How to Restore Business Confidence?

Business confidence reflects the combined idea of the consumers and producers at a given time. Sometimes referred to as business sentiments it could move upward, downward or remain same. Generally we trace sentiments from one point of time to another. A positive upward spiral of business confidence with seasonal correction is always welcome. When business sentiments dip in downward spiral it is a definite cause for worry to business. Let me give you a step-by-step guide how to restore business confidence during such an eventuality:

1. Survey: Firstly, you survey confidence of the economy follow with an assessment of your industry and then finish with what you feel about your own business. Sentiments in economy may be down; your industry confidence may be mutes; still you may feel that your business can weather the storm

2. Bring Pressure: Talk to your industry association and urge them to take necessary steps in industry wide and coerce them to take up the matter with the government to do appropriate policy measures such as effecting tax cuts, enhancing public spending, adjusting interest rate mechanism and relaxing credit regulations

3. Do Internal Self-test: A review of business policies currently in force is the starting point for the internal self- examination. Business policy is all pervading term covering operations, marketing, human resource management etc. While doing this self-test you must see whether you need a structural change internally or just make few cosmetic changes. A complete revamp of a product is a structural change; giving a bit of face-lift in packaging is a cosmetic one.

4. Get External Feedback: Ask your customers. Your customer feedback tells you more about your business than what you already know. You can do a sit-in chat with your main customers who have reduced purchases and a telephone survey with others who have dropped out or buy marginally

5. Readying New Blue-print: Once you have completed both internal and external appraisal you can make a comprehensive survival kit to stay afloat during the do0wnward spiral of business sentiments and then to shore-up confidence levels higher. In this process you have to do touch-up on cost-cutting, hiring employees, investing and finally marketing

6. Review Cost-Cutting: Faced with a scenario of falling sentiments business gives a knee jerk reaction by cutting cost across the board. Most pronounced cut-back is seen in the operational area. You know cutting cost is a two way knife; it can reduce losses and at the same time it shuns business growth. You should use a selective cost cutting if at all one is needed

7. Hiring more than Firing: I know a company which is 180 years old that recruited maintenance staff during high tide of recession. While others were laced with anxiety started firing employees, the company showed glint of steel. Before long the company reaped its dividends with loyal staff and a fat profit. Undoubtedly, the company beat the downing sentiments with bold measures.

8. Invest more: Never think any depression is a prolonged affair. If you stand and wait for good times you will lose the opportunity to break-out. Throw that going in goosestep with your colleagues in the industry. Develop a good grasp of the ground and start investing selectively in operational assets that could turn the corner in quick time.

9. Do Re-marketing: Take measures to set your marketing in sprite. Re-define the customer base, expand where necessary and constrain where needed. Your new look product might have undergone a revamp or facelift as the case may be. By the look of it you know your product is a winner even in the difficult times

10. Network: Nothing works without network. Engage in full time business networking. Meet up industry colleagues, customers, supply creditors, press, and advertisement guys and add spice to the mix by getting your staff to personal promotion of your product and business

11. Bring in Cosmics: Finally, understand and evaluate your own cosmics. Your sentiments, feelings, your ideas are all shaped and influenced by cosmics that reside within you, perhaps un-known to you. Sooner rather than later you will realize the power of cosmics in restoring your own confidence. In turn, you would have contributed your mite in restoring business confidence in the country, really.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/