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Go Multinational
Go Multinational By William Cate
If you are marketing your quality product or service in any country, you should be selling it in every country. Going Multinational is more than increasing your access to customers. It's a formula for increased profits, greater access to Private Placement financing, better control over your taxes and a wiser retirement strategy.
Profits
You can sell more quality products to more people in the Global Village than in your country. Your quality product or service may be in greater demand in another country or may command a higher price than in your country.
Your exports can earn you payments in free-trading currencies like the Euro or the Yen. Currencies that you can use to grow your company, since they are accepted as payment for goods and services anywhere in the world.
Funding
Governments fund multinational corporations willing to build factories for exports that create local jobs. Funding is often in the form of grants that pay 50% of your plant development costs or low interest loans that indemnify 75% of your plant development costs. If you aren't a multinational, you are ignoring millions of dollars in free money or low interest loans.
Raising risk capital from private investors requires that your company is credible. The only way that foreign investors can determine that your company is credible is to be able to buy your product or service in their country. If you are seeking investment in Europe or America, you must be selling your quality products or services in Europe and America.
In addition to credibility, your company must offer potential investors leverage and liquidity to attract risk capital. This means that you must take your company public in the States or Western Europe. It's far easier to take public a multinational corporation rather than a domestic company.
Being public allows you to grow your company quickly. You can use your publicly traded shares to make cash-producing acquisitions. The usually formula is 75% stock and 25% cash. This means that with the same after-tax profit, you can grow four times faster as a public company.
Taxes
You must pay your domestic taxes on your domestic revenues. However, you have far more options when it comes to paying your corporate income taxes on your Global Village income. You can follow the model of American and European multinational corporations and
choose the tax jurisdiction for your export sales. This means that you can convert over half of your tax obligation on this income into after-tax profits.
Exit Strategy
You will make at least four times more money selling a publicly traded company than a domestic company. If your company trades in Europe or the States, you will be paid in Euros or US Dollars. The reason is that a public company's share price is almost always a multiple of that company's balance sheet value.
It's easy to prove this public company axiom for yourself. Pick any ten companies trading on the U.S. NASDAQ. Get their last audited filing from the U.S. Securities and Exchange EDGAR website [http://www.sec.gov/edgar.shtml]. Then go to any Stock Quote Website on the Net and get their current share price and issued shares. Multiply the company's current share price by the number of issued shares and you have the Market Capitalization of that company. It's the Market Capitalization that is the value of the public company. It isn't their balance sheet. Using whatever business appraisal formula you choose, adjust the value of each company to determine its sale price as a private company. Compare these figures with the public company's Market Capitalization. You'll realize that a public company is almost always worth far more than a private company.
Here's an example. The NASDAQ Company grossed US$5 million in their last audited year. You use Discounted Cashflow and determine the private company value of this company is US$4 million. The company has issued five million shares that are currently trading for $4/share. The Market Capitalization of this public company is US$20 million and the public company has a value of five times its value as a private company.
Go Multinational. Sell your product to the Global Village. Go public and grow your company faster and earn far more when you sell it.
About the Author: William Cate is the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/]. He has been helping companies go public in the States and to become multinational corporations for over 20 years.
About the Author
He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
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