The Impact of Structured Finance on the Ghanaian Financial Services Industry in the Next 10 Years

A Company can issue bonds to investors secured on the future profits expected to arise from part of its existing life business.

When a pool of financial assets (such as car finance, home or commercial mortgages, corporate loans,royalties, leases, non-performing receivables, and contractually pledged operating revenues) are structured and transferred to a ‘special purpose vehicle or entity'(SPV or SPE) it is known as a Securitisation transaction.

Generally, most securitisation transactions involve a two tier transaction in which the originator of the assets to be securitised transfers such assets to a wholly-owned SPV.In turn the SPV transfers or pledges such assets to another entity, which issues rated securities in the capital markets that are collaterised by such assets. This second tier entity can be another SPV or a multi-seller commercial paper conduit and can provide funding by issuing medium term notes or commercial paper.

Types of Securitisation transaction

Usually with securitisation transactions, the transfer of rights to assets can take one of two main forms, true sale or synthetic securitisation.

1. True Sale securitisation

In a true Sale securitisation, the originator (for instance a bank selling mortgages) sells the assets to the Issuer. the assets are serviced by the servicer who happens to be the Originator, with respect to say the mortgages sold to the Issuer(i.e.) and the originator continues to collect the principal and interest from the borrowers on behalf of the issuer on such mortgages and see to all default mortgages as well.

The significance of true sale is that the first-tier sale of the assets from the originator to the SPV is structured as a “true sale” such that the assets are removed from the originator’s bankruptcy or insolvency estate and cannot be recaptured by any trustee. Thus, the issuers are usually incorporated as insolvency remote entities; and may not engage into any transactions other than those necessary to effect the securitisation what is known as “limited purpose-concept” by which virtue the SPV will not be allowed to issue any additional debt or enter into mergers or similar transaction.

The transactions can be conducted as conduit, whereby the purchaser purchases and securitises assets from a number of different originators. This is done by through refinancing by issuing commercial paper into the capital market. Banks usually engage in conduits by arranging securitisation for their clients, or standalone where the purchaser only purchases assets and issues as asset-backed securities in the context of a single securitisation transaction. No commercial paper is issued.

It must be said here that, the legal characteristics and economic substance of the transfer will be the primary determining factors as whether the transaction is a true sale not a loan.

2. Synthetic Securitisation

In a synthetic securitisation transaction the originator does not sell any assets to the Issuer and therefore does not obtain any funding or liquidity under the transaction. The originator enters into a credit swap with the issuer in respect of an asset or pool of assets, transferring the originator’s risk to the issuers. Under this contract, the issuer pays the originator an amount equal to any credit losses suffered in respect of such assets or pool of assets. The Issuer’s (SPV) income streams in a synthetic transactions are the fixed amounts paid by the Originator under the credit default swap and interest amounts received on the collateral. These transactions are typically undertaken to transfer credit risk and to reduce regulatory capital requirements.

3. “Whole-Business” Securitisation

Apart from the main two forms above,” whole business” securitisation is sometimes used to finance a stake in private or management buy out of the Originator.

This type of securitisation originated in the United Kingdom. It involves the provision of a secured loan from an SPV to the relevant Originator. The SPV issues bonds into the capital markets and lends the proceeds to the Originator. The Originator services its obligations under the loan through the profits generated by its business. The Originator grants security over most of its assets in favour of the investors. In terms of cash flow, there are three most common types of securitisation transactions:

Collaterised Debt- this is similar to traditional asset-based borrowing. The debt instrument need not match the cash flow configure ration of any of the assets pledged.

Pass-Through-this is the simplest way to securitise assets with a regular cash flow, by selling participation in the pool of assets i.e. an ownership interest in the underlying assets so that principal and interest in the underlying assets collected are given to the security holders;

Pay-Through debt instrument-this is borrowing instrument and not participation. Investors in a pay-through bond are not direct owners of the underlying assets but simply investors.

One significant thing with SPV is that unlike with ordinary operating companies, whose charters typically provide for maximum flexibility, the charters of SPVs provide for the entity to have only those powers that are necessary to accomplish the purpose of the securitisation transaction. Thus the SPV in a securitisation will have the power only to purchase the particular receivables contemplated by the transaction, issue the related capital market securities, and make the payments on them and so on.

The reason for these restrictions is thought to keep the risks of the SPV’s own bankruptcy as narrow as possible: the smaller the range of the entity’s activities, the smaller the risk of a bankruptcy.

Securitisation is based on the underlying assets being securitised. Rating agencies spend a lot of time to estimate the credit risk for all underlying assets in Securitisation transaction. Other risks considered is the prepayment risk.-the risk that a portion of the assets in the underlying pool may be repaid early. Payments and settlements in Ghana are considered to be good. Prepayments can reduce the weighted average life of the pool and as a result expose investors to considerable uncertainty over future cash flows.This can be mitigated by separating the payment of the principal and interest or the conversion of fixed rate returns to floating rate.

Third Party Risk

Collateral is not the only important factor in structured finance transaction. A servicer risk would be particularly strong in Ghana. This is the case that the collection of payments, distribution to investors and performance tracking will fail. Because in Ghana credit rating is not popular.

In a Securitisation or structured finance transaction, a lot of third parties are involved who must fulfill their various responsibilities to make the transaction go on successfully .”Time is money”, it is said. Other third party risks include trustee managing succession of servicing in case of servicer default, notifying investors and rating agencies of breaches and defaults, and holding cash payments to prevent servicer misuse of cash flows; manager responsible to balance the competing interest within a transaction.

Financial Risks (Interest Rate Risks, Foreign Exchange Rate Risks, Devaluation Risk)

Financial risks usually cover interest rates, foreign exchange rate & availability, currency and inflation risks. Inflation really affects the originator in a Securitisation transaction for reasons like raising the cost of the transaction which can delay its completion. Some governments are also sceptical about foreign investment in their country and sometimes prevent the repatriation of funds by foreigners outside. Devaluation and interest rate just like inflation can also affect Securitisation negatively especially when provision has not been made in the transaction deal for that. Russia is a good example. International funds are often cheaper than local ones, but given the fact that the payment to receivables is sold locally, and paid in local currency, using foreign loans creates exposure to the risk of currency depreciation.

Political Risk

Because cross-border transactions are conducted such that assets generate cash flows in the domestic currency while the securities backed by those assets are denominated in foreign currency, there is the risk that regardless of the credit strength of the underlying assets, the issuer might default on the payment. The following relevant known political risks are identified:

Expropriation risk:
The act of taking something from its owner for public use. This involves the act where a government takes over assets or accounts of local parties in the event of financial crisis.

Transfer of business from private to state ownership. This is not usually experienced in the West as in South America and Africa. In relation to Ghana’s political situation, this is not envisaged.

Convertibility risk:
This is the risk that in a national crisis, the government might impose a moratorium on all foreign currency debts because of a financial crisis in the country.

Change of law:
The ruling government can change the laws overnight and this can affect a structured finance. Sometimes for economic and political reasons, tax laws are enacted which might not be to the advantage of the originator in terms of the cost increase to certain elements which could increase the purchase price of the product on completion and can jeopardise the securitisation transaction which must be made cheaper if it is to succeed. For example an increase in the fuel tax can affect the entire transaction because tax neutrality is paramount to securitisation transaction.

Legal & Documentation Risks
Following change of law in political risk discussed above, possible legal risks to a Securitisation transaction include inadequate legal, legislative, and regulatory framework on tax, financial and money market & securities. Sometimes the case and administrative laws in the country concerned are not developed. These issues are of great concern to investors and for that matter the originator will have to deal with this risk.

In asset-backed securities(ABS),however, the legal and documentation risks include uncertainty surrounding the transfer of assets from the seller/originator to the SPV (i.e. ‘true sale’) the need to ensure that holders of ABS receive full control over the underlying assets; the bankruptcy remoteness of the issuing SPV.

This means reviewing all the covenants in relation to the separation of the SPV from the seller; the legal roles of the trustee and servicer across all relevant jurisdiction including Ghana to curtail operational and execution risks associated with the payment and receipts of transactions.

Because of the changes in deal structures and considering the legal and financial framework of Ghana, legal and documentation risk will be very high.

Regulatory Risk
The risk that originators and other lenders will not be treated fairly. There should be a laid down regulation on profit-sharing, regulations on the rated instruments and most importantly what structure should the SPV that issues the securities be.

Liability Structure Risk
This risk is the issues associated in which with the tranching or slicing of securities brings conflicting interests which if not checked may disrupt the appropriate distribution of receivables to end-investors. The key to structured finance transaction is the payment waterfall which set the covenants for paying the interests and principal and allocation of losses among investors. This can be sorted with over-collateralisaton tests which ensure the existence of sufficient collateral in the underlying pool of assets to cover principal payments; and interest coverage test to ensure that there are sufficient interest proceeds to cover interest payments to note holders.

Levels of Risks
Rating agencies usually would have to assess the totality of the risks envisaged in each transaction before assigning a rating to the security. Thus the potential for any shortfalls in receivables and the adequacy of any credit enhancement to ensure that the end-investors are assigned the right level of default risk. Cross-border transactions for example require specific analysis regarding the potential limit that could apply to the rating of the notes because of the potential default of a government and the possible application of a moratorium by a government in times of crisis.

Benefits of Securitisation
The use of Securitisation is not limited to one specific asset or income flow. The application stretches beyond the existing bank-funding products and equity funding arrangements. The challenge is the approach with which a Securitisation is considered and the ability to measure the impact thereof on the future of the business. This stems from the fact that Securitisation is cash flow driven and not earnings-improvement driven.

Generally, securitisation can offer the following benefits and we would later analyse to see whether or not it would benefit Ghana.

Efficient access to capital markets: when transactions are for example structured with credit ratings by a recognised credit rating agency on most debts, pricing is not tied to the credit rating of the originator. This is very significant if the originator is not credit worthy.

Limitation on issuer-specific’s ability to raise capital is reduced: securitisations can minimise an entity’s inability to raise capital because capital raised under securitisation becomes a function of the terms, credit quality or rating, prepayment assumptions and prevailing market conditions.

Illiquid assets are converted to cash: Securitisation makes it easier to combine assets which otherwise could not be sold on their own, to create a diversified collateral pool against which debt can be issued.

Raise capital to generate additional assets: capital can quickly be raised such as releasing long-term capital for any allowable purposes like completing capital project and purchasing additional assets.

Match assets and liabilities to minimise risks: a well-structured securitisation transaction could create near perfect matching of term and cash flow locking in an interest rate spread between that earned on the assets and that paid on the debt. This means that Ghanaian business entities can raise enough funds without necessarily providing collateral for security because of the transfer of risk.

Raise capital without prospectus-type disclosure: A conduit securitisation transaction allows one to raise capital without disclosure of sensitive information of any sort; in fact information is kept confidential.

Complete mergers and acquisitions, & divestitures more efficiently: Assets can be combined or divested efficiently under Securitisation transaction. By dividing assets into smaller parts against which debt is issued it can become possible to do away with other business entities which are no longer profitable.

Transfer risk to third parties: Financial risk on loans and other contractual obligations by customers can be partially transferred to investors under securitisations.

More funding beyond bank lending: A structured Securitisation transaction enables the originator to raise funding while maintaining the right to the profit on the receivables. However, these funds will not be linked to its credit rating but rather the credit rating is on the special purpose entity created for the Securitisation transaction. By incorporating an offshore SPE, many businesses in Ghana with poor credit rating might potentially raise funds for any purpose.

The overall effect of securitisation of bank loans and credit aggregates is likely to be a reduction in the level of credit extension by the monetary sector and a reduction of similar magnitude in the M3 money supply. This is to say that the banking sector closes its balance sheet by setting off some loans against some M3 deposits.However,the original borrowers still have obligations but to the SPV not a bank and institutional investors still own assets which are now tradable securities not M3 deposits.

Structure of Ghana’s Financial System
The financial system comprises of
1. Bank of Ghana
I. Savings and loans bank
II. Discount houses
III. Finance houses
IV. Leasing companies
V. Forex Bureaux
2. Securities and Exchange Commission
I. Stock Exchange
II. Brokerage firms
III. Investment Management companies
IV. Trustees and Custodians
3. National Insurance Commission
I. insurance Companies
II. insurance Brokers
III. reinsurance Companies

The banking system in Ghana is structured to serve the needs of all citizens as much as possible. At the end of 2005,the banking industry was made up of Merchant banks, Universal banks, Commercial banks, development Banks,ARB Apex banks, and Rural Banks; with a total growth of its assets by 17.62%.

The Non-Banking Financial institutions (NBFI) sector is made up of Savings and Loans Companies, Discount Houses, Finance Companies and Leasing Companies. Total assets for the Non-Banking Financial Institutions also grew by 47.98% which were mainly triggered by loans and advances, investments, other assets and fixed assets. The Discount houses hold 82.61% of the overall total investments of the NBFI sector.

The new Banking Law, Act 673, which became operational in 2005 with its higher Capital Adequacy Ratio requirements, new sanctions regime, as well as higher governance standards ensured that banks remained generally compliant with regulatory and prudential requirements.

The Securities Market in Ghana

African stock exchanges face a number of challenges before they could enter a new phase of rapid growth. The most critical issue is to eliminate existing impediments to institutional developments. These include a wider dissemination of information in these markets, the implementation of robust electronic trading systems and the adoption of central depository systems. Ghana has since established a central depository system in November, 2004.

The Ghana securities market is regulated by the SEC. The Ghana Stock Exchange is underdeveloped with reference to exchanges in US, Europe and even South Africa. South Africa for example has market capitalisation of $180 billion, one of the largest in the world with Ghana’s market capitalisation of $11 billion.

Considering that Ghana has had just one Securitisation transaction -structured finance-with no records for research, and the position of Ghana’s macro-economic situation, it was found expedient to look at the Securitisation transaction in South Africa. Even though Securitisation transaction is still at an early stage of development in South Africa, it has grown rapidly in recent years and it would be a suitable “benchmark” after which to carve Ghana’s Securitisation transaction.

According to the available information, the first Securitisation in South Africa was aimed at mortgage Securitisation; developments were very slow over the 11 years. Then in 1992 Securitisation was applied to corporate equipment rentals and leases up until 1997 through 2000s with Securitisation on trade receivables, properties, future rebate flows, future cross-border flows and CLOs.

South Africa’s motive for Securitisation transaction was to benefit from more efficient financing and profit maximisation; improved balance sheet structure and finance ratios; improved risk management; and lower economic and regulatory capital requirements among others.

Although the Securitisation transaction is still in its infancy in south Africa, available records show that issuance involving domestic banks in South Africa (i.e. private banks) has increased from R250 million in 1989 to a whopping R26 billion by the end of October 2005. Based on a recent study conducted on the UK market which suggests that Securitisation provides investors the opportunity to attain a higher after tax return in comparison with after tax returns being generated by equity related property investment , Securitisation in South Africa is being applied as an acquisition tool in acquiring properties and as a portfolio optimisation and value unleashing tool.

Securitisation regulations in South Africa compares to international Regulatory Practices similar to those in the United States of America and regulate the manner with which Securitisation assets and income flows are transferred from the originator to the SPV and operational aspects and efficiencies of the SPV.

Different opinions exist in the South African market regarding conformity to Securitisation regulation. One centres on the use of specific words “Bank or deposit-taking Institution” that only South African banks can originate a securitisation.The other opinion is on non-conformity as appropriate if a company or business other than a bank originates a Securitisation.

The onus of the matter is that Securitisation transaction is also designated within the regulation as an activity which is not limited to the business of a bank under certain conditions; thus allowing companies other than a bank to embark on Securitisation transaction.

The Ghana Securities Exchange Commission’s annual report for 2004 does not mince words about the position of the Ghana Securities market. It reported that “despite the modest decline in index performance in percentage terms, the GSE still maintained its position as one of the best performing stock exchanges in the world in 2004 for the second time running.” Market capitalisation of listed Companies on the Ghana Stock Exchange increased by 84.90 trillion cedis to 97.61 trillion cedis from just 12.6 trillion cedis.In dollar terms, market capitalisation went up by 654.0% from US$1.43 billion at the beginning of 2004 to US$10.8 billion at the end of 2004.

Unlike the stock market, the bond market in 2004 was relatively low posing “a serious market development challenge to the commission”. The turnover value of listed corporate bonds in 2004 declined from US$606,600 in 2003 to US$73,414 a decline of 87% whilst government bonds also declined by 71%.The value of listed corporate bonds in 2004 was US$6.79 million compared to US8.98 million in 2003.

The corporate bond market remained relatively quiet. However, the US dollar denominated corporate bonds traded on the market increased by $41,783 to $115,200.

The government of Ghana is determined to use municipal, corporate, government and agency bonds to improve activity in the primary market. As a result of that, the Bank increased accountability and transparency in line with International Financial reporting Standards (IFRS) best practices in its financial reporting and disclosures in 2005.
Coupled with this, other relevant Government policies were strengthened to reinvigorate revenue collections and consolidate public expenditure aimed at reducing the domestic debt in relation to GDP .As a result of that the government started a programme of reducing domestic debt in relation to GDP to enable the private sector access credit and lead the growth process.

The significance of Bank of Ghana in the financial system is that the bank is the provider of technical support for the legal and regulatory reform of the financial system to minimise risks and ensure legal certainty especially for electronic transactions; and also monitor various financial laws at different stages of development.

There is no doubt that people learn from experiences of others so do nations about the successes and failures of other nations especially with regard to something new and complex like the concept of Securitisation transaction. It is recommended that Securitisation in Ghana is modeled on the experience of South Africa’s Securitisation transactions with some changes in the legislations to fit the situation in Ghana.

Ghana’s private sector is beset with many constraints for no doubt, however, the other side is that, there are so many opportunities either untapped or unidentified comparative as well as other natural and mineral resources already in large quantities. There is potential for more effective exploitation of these endowments. But continued reliance on a few commodities with low prices and wages subject to fierce international competition in slow global markets have left the country vulnerable to hardship. These products could be structured and securitised.

Training of players of Securitisation transactions like, the originator, servicer, legal advisers, accounting adviser, tax advisers and others must be continuous about the technicalities of Securitisation transaction from now till the take-off. There should not be any mediocrity as is the characteristics of government and government agencies.
Investors and potential originators must also be educated on the benefits of Securitisation as an alternative for traditional capital formation besides equity and debt which is common to the Ghanaian business community. Providing better understanding of, cash flow drivers behind Securitisation transactions, credit rating agencies and also credit enhancement issues. This would trigger a strong desire for this form of capital formation to put Ghanaian businesses in the race to compete favourably on the international scene.

The technicalities of grasping the intrinsic techniques of properly analysing the segregation of assets and income flows from the company that owns them to the SPV which is meant to control the assets for the benefit of investors, must be well understood by the investment community.

A lack of genuine understanding of the drivers behind a Securitisation transaction, the ability to measure the impact on future operations as well as the initial costs involved in Securitisation creates difficulty in clearly defining the true incentives for conducting Securitisation amongst South African companies. Thus a comprehensive understanding of such amongst Ghanaian companies will boost Securitisation transaction.

One issue that needs to be tackled very well is the Tax Laws to make the Securitisation transaction work. Ghana operates a free-zone scheme and this can be extended to encourage Securitisation transaction. Certain areas within the country could be assigned as ‘free zone for Securitisation’and ‘use as tax haven’ to nurture and groom Securitisation in Ghana.

The regulatory environment through which Securitisation is conducted, coupled with capital market infrastructure to support adequate pricing of all risks associated with all forms of Securitisation transaction-conduit, synthetic or “whole-business”.

Finally, it is recommended that, research into the legal framework on bankruptcy, tax, and commercial laws relating to structured finance and Securitisation in particular should be encouraged among the Ghanaian academia.

Ghana indeed has an enabling environment suitable for Securitisation transaction. Key issues to drive this on might include as mentioned above extension of existing laws like Tax, Bankruptcy and commercial Laws to include treatment of Securitisation transaction.

Ghanaians are strong-willed, forceful and patient. When the expertise is acquired for Securitisation with the training of the players above, good governance of the other key government policies like MIDR and Strategy for 2004-2008‎, improvement on the Ghana School Financing activity‎ they will serve as catalyst for Securitisation.

Considering the experience of South Africa over the past decade, the experience of the developed economies in Securitisation transaction and the macroeconomic and the investment climate continue to improve as it is now ,in the next 10 years, Ghana will not be too farther away from engaging in Securitisation transaction if not already there.

1. ‘Securitisation in South Africa-a revolution for local funding’, by Bagley et al(2003) Fitch Ratings available online accessed 20/07/2007
2. ‘Securitisation: A public tool?’ Treasury working paper, by Davis,N ,available online accessed on 20/07/2007
3. ‘Securitization.’Wikipedia, the free encyclopaedia. accessed 25 Feb. 2007.
4. “Consider Securitisation to improve liquidity in the South African property market” by Eugene G van den Berg, accessed on accessed on 04/08/07
5. “Note on the impact of securitisation transaction on credit extension by banks” in Quarterly Bulletin December 2005 by N. Gumata and J .Mokoena
6. “The awakening of securitisation in south Africa”, by Van Vuuren online available
7. Africa -Ghana organising in the informal sector(on line) Available from (accessed 29th April 2006)

How to Create an E-Book and Distribute it to Increase Sales in Your Consulting Or Business Services

Knowing how to create an ebook to pre-sell your products and services online is one of the most valuable exercises you can undertake…as well as one of the simplest. If you are a very busy professional or entrepreneur, you can train one of your staff or hire a virtual assistant to help you accomplish this task.

Before we go further, it’s important to clear up one of the most widely believed myths on the internet – the idea that the sole act of creating an ebook can quickly generate you or your business a six or seven figure income online. This is far from the truth and was concocted by dishonest internet marketers to lure desperate newcomers into their high priced programs.

Fortunately, if you are a business owner, you understand that the path to sustainable income is to provide products (like your ebook) and services that meet the needs of a specific market and systematically add value to their lives through the execution of fixed processes.

Now that we’ve cleared up that misconception, here are some ideas to understand why your business should be using ebook marketing online and how to create an ebook that successfully generates you more sales no matter what business you are in.

Why Ebook Marketing Works Online

Ebook marketing works because at one point or another, the vast majority of people in your marketplace have gone online to search for specific information to help them achieve a goal, exploit an opportunity or solve a problem they have. In many cases, these goals, opportunities or problems are directly or indirectly connected to your products and services.

With the increasing sophistication of search engines and social recommendation (bookmarking) technology, these future customers can increasingly find your ebooks or other information products without too much trouble if you accurately target the problems they most commonly care about as well as the words and phrases (also known as keywords) they are likely to use when they search online for information.

If you properly execute your ebook strategy, these prospects should be able to find your ebook, read it, gain appreciation for your products and services and contact you when their need warrant it. Getting your marketing message out using ebooks helps you conduct marketing campaigns that are both massive and passive.

How to Create An Ebook The Sells Your Services

Creating an ebook that sells your services (or products) does not have to be very difficult. However, it does take a bit of customer-centric thinking which can be somewhat challenging for certain types of people. One of the ways to ease this challenge is to think in terms of the top 3 to 5 problems or “perceived problems” your customers are facing, as well as the most exciting opportunities or motivating goals that they have.

Note that people are generally more urgently motivated to act by “negative” conditions rather than “positive” ones. So they will generally move faster and more decisively if you identify a way to prevent an outcome they fear than say if you showed them an exclusive opportunity to reach their goals. Some academics and marketing professionals believe that this is rooted in evolutionary processes.

4 Steps to Creating and Distributing Your Ebook for More Sales

Think about how your perfect target prospect buys your product or service and then map out the process. See if you can deduce a convenient online alternative to your customers’ offline buying process and then use the following 4 steps to create and distribute ebooks to increase the flow of new customers to your business.

1. Select a target market

Contrary to commonly dispensed conventional wisdom, your products should target narrowly defined “core problems” or “core opportunities” of broad people groups that you serve (instead of narrow market niches). For instance, my marketing consultants generally create products of interest to groups like internet marketing managers, small business owners, business executives and sales managers.

2. Conduct market research And Select Topic

Conduct market research into the fears, hopes, problems, goals wants, and habits of your target market. Your research should also be targeted at understanding the “online buying language” (or search terms) of your target market as well as their general buying patterns and preferred media for receiving information.

Research the “White Paper” and “Most Popular Article” features of the top consultants, trade publications, bloggers and competitors in your space to see what areas draw a lot of traction and where there may still be vacuums. Make sure that the topic you solve follows the general outline: Identify problem, Propose Solution, Call to Action.

3. Create Ebook

The simplest way to create an ebook today is to create your informational document in any word processing application (or even PowerPoint or Publisher documents), and convert to PDF format. Depending on your particular industry and the sophistication of your target client base, you may want to spend some money on excellent cover page graphics and formatting as well.

PDF ebooks are the most widely trusted format for receiving ebooks today. They are a convenient alternative to word documents, zipped files and other alternatives. Adobe Acrobat is the leading software for creating, editing and converting PDF files. There are also good free and lower cost alternatives like PrimoPDF. Whatever PDF creator you use, make sure that you learn how to create hyperlinks with it so that your readers can click through to wherever you want to send them online.

With regard to hyperlinks, most PDF converter programs will automatically hyperlink any full web address.

4. Decide On Distribution Model And Pricing

You have to decide on what function your ebook will primarily be applied to. Depending on your industry and your business model, this may actually be important to think about even before you decide on your content. Here are a few ways ebooks are used by businesses marketing online:

• Search Engine Lead Generation
• Email Marketing “Bait Pieces”
• Sales Pipeline (lead nurturing) Content
• Education Marketing (Industry Though Leader)
• Direct response sales letters

Generally, your pricing strategy for each ebook will depend on your overall online marketing plan as well as which of the above functions your ebook is slated for. In general, ebooks for search engine marketing (through websites like and have to be free to accomplish their goal.

Email marketing pieces for landing page conversions should also generally be free and accessible in exchange for prospects giving you their contact information. The same applies to your well-crafted educational sales letters.

If you decide to accelerate the spread of your ideas through full-scale information publishing, you can package your ebook for resale (through product naming, well-designed graphics and a dedicated mini-site), and connect your product with a system that allows you to pay affiliates a commission for selling your product.

Websites like ClickBank and give you a way to easily attract and manage affiliates if you do not want to invest in affiliate management software packages to do it yourself. With these affiliate-driven products, you may decide to create a mix of products to sell from a few dollars to hundreds (or even thousands) of dollars.

Many consulting and professional services firms also invest in creating high end information products like comprehensive research reports or “How-to” guides which may be priced anywhere from hundreds to thousands of dollars.

Where is the ‘One Stop Shop’ in the Food Service Industry?

As the search for million-pound projects continues in earnest during the first signs of those ever talked about grass roots within the UK economy, more and more of the large-scale kitchen houses are beginning to fight over an ever more competitive market place. No doubt once the resurgence is kick-started the contracts will trickle through and the food service equipment services market will cut margins to take on the work. But is this really the path to success?

The commercial kitchen design and installation industry is, in my opinion, missing a massive business opportunity. It may not be the most profitable, it may not be the least problematic, but it is certainly the most abundant at times of growth; the business start-up. An order of £20,000 may appear insignificant to any company designing commercial kitchens, installing food service equipment or supplying commercial kitchen equipment, but, the margins can be better and the future upsides are huge.

Let us say on average 90% of new restaurants fail, or in a more optimistic light, one in ten succeeds. Any food service equipment specialist that works on 50 of these small hotel kitchen or restaurant kitchen projects can potentially look forward to 5 loyal clients per year offering them future business.

The work involved is far greater. Kitchen equipment supply and installation becomes secondary to the rerouting of electrics, consultations with planning officers, enabling works, Whiterock walling and Altro floors. The payment is higher risk, there are no Cap Ex budgets in the start-up restaurant game. But what there is, is the rarest of opportunities, that of customer loyalty from the outset. I look back on what has made my father great over the years, and it is his treatment of his clients fairly and honestly. That is why people return to him, and why he no longer seeks new business. (Incidentally your annual marketing budget can be nothing, just ask him!) This is the climate where lifetime relationships are forged, between the aspiring restaurateur that sees his window of opportunity and the one foodservice equipment specialist willing to give him the time of day and an opportunity to offer experienced advise on the best catering equipment choices for his needs in return for a paltry £20-£30,000.

These people don’t need the top of the line Rationale Combi oven 20 grid, what they need is “know how” on where to save money and where to maximise their budget. Who to speak to, to get a change of use planning application through, the best way to run the electrics, whether a small partition wall would organise the space, how many covers they need to accommodate to meet their overheads. It is that information that gets you long-term business, not the discount you can offer the latest garland range at. Initially you’ll be working harder, dealing with more problems from your clients and making less cash, but your margins are better and the long-term growth opportunities are well worth it. And guess what chaps there’s plenty of that business going round over the next few years. Food service Equipment services and commercial kitchen solutions, for the budding restaurateur anyway, have to be in the form of a One Stop Shop.

How to Choose an Ebook Topic to Pre-Sell Your Professional, Consulting Or Business Services

Knowing how to choose the right eBook topic for attracting qualified leads is a highly desirable skill for marketing online. However, it cannot be seen as a “magic pill” and it requires a strong knowledge of your market. If you suspect that you (or your staff) may not possess the requisite knowledge to make the right choice, you should supplement your current level of knowledge with further internet market research.

Unlike many internet marketers who start without a true grounding in the fundamentals of business, your real world education has most likely shown you that the path to business success is achieved through connected systems and processes – systems and processes for creating products and services, for serving clients, for selling them add-on services, and for catering to their needs and problems when those come up.

While one eBook is not likely to make anyone rich in today’s internet, an eBook can be incorporated into a well thought-out process to generate leads and improve conversions for a business that sells big ticket products and services.

How to Create an eBook That Sells

The first step in creating an eBook that connects the right leads and prospects to your service is to make sure that you have done your research into your target market. If you have a current customer or client base, you may be able to survey them for their needs or examine their purchase history to determine what information your target prospects would find irresistible in an ebook.

Whether your company is a B2B (Business to Business) company or a B2C (Business to Consumer) organization, the way you position your eBook content will have to connect with them emotionally as well as logically. Since the categories of human needs and wants generally have not changed in the last three thousand years, you may find that your target market will find some of the following ideas useful.

1. Making Money or Saving Money
2. Attaining Success Or Community Respect
3. Weight Loss, Nutrition and Dieting
4. Fixing Medical Problems
5. Beauty and Looking Good
6. Relationships – Business And Personal
7. Family and Parenting

These 7 areas above are connected to deep emotional hunger and needs that people have in common – regardless of whether they are a “work at home” mom or the CEO of a Fortune 500 company. Each of these areas can be woven to a particularly valuable context for your target prospect.

You may not think that some of the 7 core areas above are relevant to a B2B marketing effort, but you would be wrong. With just a little adjustment in focus and in scope, you will find that all these topic ideas above have a B2b corollary. For instance here are 7 content ideas for b2b marketers using the above list as a template.

1. 303 Ways To Save Costs In Your Business (Making/ Saving Money)
2. The Fast Track To Thought Leadership In Your Industry (Success And Respect)
3. Boost Productivity Through Employee Nutrition Education Programs (Weight loss, Nutrition)
4. How A Physically Healthy Organization Boosts Productivity And Lowers Costs. (Medical)
5. Why Every Customer-Facing Employee Needs Image Coaching (Beauty, Looking Good)
6. How To Connect Quickly And Easily With People (Relationships)
7. How To Drastically Reduce Absenteeism Through Family Skills Training (Family)

There are literally hundreds and thousands of potential eBook topics that you can create around your business and your market. For these ebooks to be helpful in your lead generation and nurturing, they have to resonate with both the emotional and logical needs of your prospects and customers.