Business Editorial

Posts Tagged ‘Investor’

This is the story of two business plans with very different headlines. Both contain a unique business opportunity and exciting with high yield potential. Arrival in the morning mail, each plane lands on the desktop itself bound by the investor or potential business partners. Both plans are to win hundreds of other documents, spreadsheets, phone calls and goods that compete for the attention of investors. And compete in time, because everyone looked for a few seconds, it owns or in the past rarely returned to the investor. The first plan is closely linked. It has a thick paper cover. The cover is similar to the first page of a trial. The name of the company at the center of the page and to the owners in the lower left corner of the first pieces of information about the offer of the investment company. Who are not familiar with the company name to learn or owner, the investor must now open the map of something significant about business risk. Read the rest of this entry »

Head Office of Justice Minsk City Executive Committee on March 12 registered venture capital agency, BelTA was told in the agency. The agency was created as a commercial organization. Its main task – to accelerate the development of the sector of innovative companies in Belarus and the share of venture capital (high-risk) projects, as well as projects commercialization of intellectual property. The agency will operate in a segment of innovative companies and venture financing.

The new organization brought together professionals in areas such as marketing, finance, law, venture capital investment and project management. If you need to work on the project will involve technical experts. The main activities of the organization will provide services to develop business plans for innovative projects to find investors for their financing. The agency will also prepare the documents necessary for implementation of projects relating to the commercialization of intellectual property.

“We understand the financial constraints of most companies at an early stage and provide significant benefits to pay for our services, as well as carry out an initial consultation at no charge – noted in the agency. – Some services may be provided in exchange for a minority stake in the project.” The Agency has reached a preliminary agreement on cooperation with venture capital organizations, business incubators and Business Angels Association of Belarus and foreign countries.

The intention here is to leave aside the complicated explanations and share some principles that, if the owner or manager of a business does become a habit, can ensure that the money will be handled properly.

Good stewardship

A company is like a tree planted, takes time and care before they can bear fruit.  If we begin to prune the tree when it is still small and growing, it will become a “bonsai” (dwarf tree), or worse, will dry up and die.  In other words, if the owner of a company “pulls” resources beyond the capacity of the latter, one of two things happen: keep a dwarf or die.

To prevent this from happening, the owner must see himself only as the manager or “steward” of the company, or someone who was entrusted with their care and must submit accounts to the rightful owner.  In my experience, I’ve seen small business owners grow rapidly when really apply this principle.  How can this “relationship” is fair?  Being allocated to “butler salary (and strictly limited to it) considered fairly for their work, but also the company is in a position to pay.  For example, if the salary is $ 10,000.00 delimited should not have even a single weight.  Do not rush and buy luxurious things (especially cars for personal use), only that “we have to impress clients with a good image,” nor was “health cure” thinking that the end of the deductible  taxes, then go “on behalf” of the company.

Be patient and you will have time to make such expenditures as business permits, and that if done too soon, will be “pruning” your business.

There must be balance between inflows and outflows of cash in a company

Overall, there are only two important ways that among the company money, for an injection of capital (which may be an investor, the support of an institution or a loan), or by income from sales.  Incidentally, these are the only ones who truly make it profitable and healthy, as if no sales revenue, any capital injection will be “throwing good money after bad.”

On the other hand, outflows are cataloged in costs (purchase of raw materials or products that the company resells, etc.) Operating expenses (salaries, rent, etc.) Investments (in machinery, furniture,  or publicity), and finally, profits (what is left after all other outputs).  It is essential to respect the hierarchy in terms of outflows, if “we” and we owe utilities costs or operating expenses, all we’re doing stupid, because there really is no such “profits.”  We can summarize as follows: you can not leave anything that has not come first.

The problems start when we put more emphasis on outputs than inputs.  It is important to take care not to spend excessively, but more importantly increase sales revenue.

The law of sowing and reaping

Have you heard of the law of sowing and reaping?  What you sow is what we will reap.  Sow sparingly and reap sparingly, sow and reap abundantly abundantly.  This principle bears much relation to the previous two.  As owner or manager you are an example for their employees, suppliers and customers.  So far the potential of the company, plant in decent salaries, sow by hiring another employee if the work demands it, rather than “black” already has more, planting one or two courses  training a year, sow in raw materials of good quality and reliable suppliers (although not the cheapest), always to give a little extra to the customer, plant to hire at least a little publicity.  Sow advice of professionals to make important business decisions and improve their business.  Not trying to say that ALL must reinvest profits earned (although initially it is always advisable), but put into practice to plant this instead of wanting all the profits for you maintaining “anemic” to your business and see the results.

Do not buy anything you do not know exactly how you will sell or use

Sadly I have found many companies (especially those with little time to have started), which are cast in tow large operating expenses and invest heavily in furniture and equipment, but do not yet know how or through whom to sell their products  .  There are those who first rented an office “well placed”, they buy a nice desk and a computer (or network of computers) very strong to carry the “administration” of the business, hire broadband internet and two phone lines (because they were offering  ), and have a nice financial business model designed to 5 years, but have not yet had sales revenue that mean more than a few pesos.  So, what plan to maintain all that?  Remember that sales revenues are the only way a company is healthy.

In an extreme case is preferable to start (and would not be the first to do it) working from home with a cell phone, referring to the free email account at an Internet cafe and a good (and grounded) business idea, but focusing first  on getting customers and close sales, which focus on engaging the capital of the company before getting the first order.  Unless you are a business open to the public, some nice facilities help, but by themselves do not get customers.  Even if sales revenue and allow it, then go ahead, sow in your company.

Please avoid the “bargain” and offers if the business really does not need at this time.  Do not buy unnecessary things “only” because they are tax deductible and because “we have VAT payable to” tax that may help in the short term, but ultimately is a very harmful practice.

One more thing, do not also help “do it yourself” in order to save.  Remember that the goal of a company is making money by selling their products or services, save costs and expenses.  In theory, sales can grow without limit, but also in theory but can not get costs down to zero.  So instead of losing (you or your staff) too much time trying to learn to do something that can not do, and NOT have to know to do, better pay him a reasonable price to an expert (who probably will do better and more  fast), and spend the time to address the issues of your business.

Either sold or well-rotted

This is a popular saying among traders of fruits and vegetables, and means that you should never “bargain away” products or services of your company, only to sell “even if it is something.”  If you do not believe in the value of what you offer, your customers will not either.  Remember that your profit margin is where it comes to pay operating expenses for investments in the business, and ultimately, profits.

Never trust

One thing is give credit, and quite another to be trusted.  If we intend to give credit to our customers, we must first see how many possibilities there that we do not pay (and if the company is poised to take that risk), and we must have someone in charge of collection,  giving “weapons” to do their job, and signed promissory notes, receipts, contracts, etc. (because it is certain they will be required.)  If we do this, we are simply trusting, and trustworthy is the closest thing to give your product or service (which by the way, we do not presents), and we have to spend time and money to collect (and perhaps  habérnosla bought someone else might spot) that distract us to be selling or serving the business.  It is a grave mistake trusting end in order to “sell.”  Do not do it!  You have not actually sold their product or service if you can not charge for it.

Keep a cash reserve

This is probably the principle that requires less explanation: quite simply, the unexpected occurs.  Although this varies depending on the rotation and size of the company in general I recommend that you try to have at least the equivalent of 3 months of operating expenses as a cash reserve.  And please, do not save “under the mattress”, ask your bank for any investment vehicle to meet your needs.

One of the most important benefits of applying these seven principles is that they are aimed at protecting the business’s working capital, which is like “oil” that allows the engine to run your business well and generate sales revenue.

As we see, is not so difficult to make good decisions about money management, if based on good business practices.  Now, I invite you, with a vision of long-term business, think about the 7 principles, and consider the next time you need to make decisions in your company money.

In all areas of life always thinking about getting this development through a capital increase and improvement of the instruments or tools for production, so it is often necessary to use certain aids or impulses that advance and improve conditions for certain activities, this has given room for the generation of a large number of figures who seek to meet the capital needs of many companies in exchange for certain benefits, a clear example is the venture capital, where some agents called interventionist, who with the intervention in companies through capital and management are able to boost the activity of these companies and ultimately take a profit from its management and intervention within the company which made the investment.

No doubt the risk capital is a form of intervention in the economy in a very proper, to some extent promote the growth of different market fields. Venture capital is applied primarily in companies that are emerging and need a boost that allows them to solidify in the market so they can perform their activities better. Also be given the intervention of risk capital in relation to those companies that have no historical records to trust the results to be obtained with this so so much in the case of start-ups like those that have no history to certify their results, the capital invested some risk since there is no guarantee that the investment will generate the minimum expected fruits, such as generating a lot more, so this has nothing true capital.

The conditions for this type of investment, has meant that investors who venture to this mode of investing money in venture capital funds seek companies that can grow very easily, because they are models of innovative work that work because of new fields or applying new techniques of action, so the system will be operated by companies that venture capitalists should encourage good performance, which allows that from the start, it’s optimal performance.

At the time in which a business is operated by a venture capital fund, it is passed to other owners of partially or submit the form of participation by shareholders.

Thus the capital investment funds will be represented or managed by a financial institution, which will become part of the company still owns some part, but this is temporary, for after some time the firm had established such as it was before the relationship with the venture capital fund.

The main objective is that with the involvement of venture capital the company can grow greatly and very rapidly, increasing its value and the time when the investment matures, the investor will withdraw the agent getting some gains on account of capital growth.

The global recession

You have not watched the news too often in the past year or so to be aware that interest rates are at an all time low, because we suffer from a “global downturn”. Our cash in the bank earning less interest than inflation for our food. Savings bonds and shares decimated by stock market fall. The value of the property has expired and we are now a much less worthy than we were eighteen months ago. So, in this price collapse is something we can invest in? The answer is yes – it was the news that the value of gold rises rapidly as wise investors in the bulk purchase this is it.

What can we do?

But for those of us who can not afford to bulk buy large quantities of gold, how can we on this increase in the value of gold? It’s simple. The increase in the value of gold has driven a huge demand for the precious material. Buyers can not get enough and they want more. What’s more, they are happy in small quantities to buy someone who can fuse to form larger quantities. Therefore, those of us with small pieces of gold jewelry or any gold trinkets around the house can cash in on the Act. We just need to look for one of the many companies that currently advertise their unwanted gold will buy them and sort them. Read the rest of this entry »

Information and guidance is important. Below, some of the most important advantages and requirements of an FHA loan.

These loans are secured by Federal Housing Administration, for the purchase or refinancing of primary residences.

In refinancing, you can:

• Get financing for up to 85% of the value of the property to build or obtain excess.

• Fund up 97.75% of the value of surplus property without paying just to reduce interest or years of funding.

In sales you can:

• Obtain funding of up to 96.5% of the valuation or purchase price whichever is lower

One of the advantages of FHA loans is that you can benefit from aid designated for this type of loan by the government.

If the property you currently live conventional financing you can refinance FHA as long as you qualify with the parameters set by the investor.

Among the many changes that the social side of Internet is also, I like to highlight its potential for socio-economic change, the phenomenon of crowd funding: a new way to give economic support to all types of investment projects and socializing as funding and the resulting benefits.

The crowd Funding takes many forms, but all have one thing in common: it replaces the need for a lender or investor powerful by the cumulative participation of many young actors who contribute a much smaller amount. Read the rest of this entry »