General Business and Finance Blog

When a lot of people heard about the world credit crunch they were in so many economic woes that they wished they had started a small business. When unemployment hits all sources of income are immediately cut-off and ultimately indebtedness ensues. The one good thing about starting a small business is that if you lose you job you will have something to fall back on. But for some brainstorming small business ideas is the real problem.

I used to work at a busy office in a quiet town processing data for association management companies. And when lunchtime or the tea breaks came there was this one work mate of mine who would move around selling cakes; doughnuts; sandwiches and hot-dogs. What immediately struck me was how many people flocked to her office because they were too busy to go out for a small snack. Having spoken to her I realised how I was missing out on an excellent business opportunity. If you work in a busy office and there is a chance to sell foodstuffs do so.

The festive season has hit us and everywhere people are shopping around for a lot of things. If you’re a good graphic designer it would be wise to start a business making cheap Christmas and New Years’ cards. Look for a cheap colour printer; the right paper and ink and you’ll be well on your way to earning extra cash for Christmas. Be sure to advertise the business using fliers and posters.

In summer time when the grass is long a lot of people are looking for someone to mow their lawns. Open a small business with a small work force of 2-3 people, perhaps even your family members and start cutting grass around your neighbourhood. You might find it surprising but there are people who can afford to buy lawnmowers but they just don’t do it. Just make sure your services are cheap.

A large number of registered professionals don’t realise that their office competency can actually help them to start their own business. If you are a primary school teacher call up eager students for extra lessons at least twice a week. If you’re a registered Attorney consider opening a small firm whereby you represent clients during your free time. Utilise your skills to earn extra money, you have nothing to lose and much to benefit.

Installing Christmas lights during this festive season is another way of making money off a small business. Get everything you need at a cheap price 4-6 months before Christmas and execute an excellent job with cute follow up. With the number of people needing Christmas lights you could have a good business for every festive season.

Plaiting hair is a good way of making money if you have excellent skills. You can very easily look for cheap office space and start making hair. But you will need a few beauty therapists to help you out. Nevertheless the key is to be as cheap as possible.

Lately, the news has not been very encouraging for business owners. The country is amidst the biggest credit crunch in its history and the federal government is making major policy changes to try and contain the problems. But credit crunch or no credit crunch, business owners still need working capital to fund the businesses. One conventional approach is to apply for a business loan. For a long time, institutions had access to cheap money and could provide small business loans to companies without being too stringent. Unfortunately, nowadays getting a business loan is very hard. Banks require substantial collateral before providing business financing. This leaves few options for the owners of small, new or growing companies. One alternative that has been gaining traction is factoring invoices. This is a financing option that is available to companies that sell goods to other companies and offer 30 to 60 day terms. Most companies that engage in commercial sales face a common problem. They have to wait 30 to 60 days after invoicing to get paid. Although more established companies have enough working capital to cover this wait, growing companies usually do not. They can’t afford to wait 60 days because they need the funds to pay employees and suppliers. Going to a client and asking for a quick payment seldom helps. Good clients, like big corporations, have set schedules for payment. Waiting to get paid is part of the cost of doing business with them. But what would happen if your clients started paying you immediately? Would your company be in a better position to leverage opportunities? Would it still have trouble making payments to suppliers and employees? Invoice factoring can help you accomplish this. Invoice factoring is a business financing solution that provides you with an advance for your slow paying invoices. So, instead of waiting 40 days to get paid, the factoring company gives you an immediate working capital advance using the invoices as collateral. The key to this type of financing is your invoice. Factoring is an alternative for companies that invoice businesses that have good commercial credit records. One of the biggest advantages of accounts receivable factoring is that it’s very flexible. Most companies can get it, provided they are free from problems and have good invoices. And, as opposed to conventional financing, invoice factoring grows with your sales.

There is an alarming number of new, and uneducated, commodity traders losing just about everything they own. Why? There are a number of reasons why a new futures trader stands back, scratches his/her head and wonders why their trading account went from thousands of dollars to almost nothing over night.What happened?

There are actually a number of things that came into play.

1. First and foremost. They believed all the hype that they would become rich over night.

2. They did not buy a good course on how to trade the commodity markets.

3. They picked up some books on trading at the library, or worse, they signed up with a trading forum on the Internet and believed everything the so called experts said about getting rich over night in the futures markets.

4. They did not have a trading plan before they placed a trade. A disaster in the making.

5. They believed everything their broker told them. A NOTE: All brokers are not bad.

So what are new traders supposed to do. How do they keep from losing all their money in their first month as a commodity trader?

There are two very basic ways to learn the craft of trading.

1. Paper trade. Learn what to do before risking a penny.

2. Trade Mini-Futures contracts. Keep any loses to a minimum.

There are multitudes of commodity trading books on how to make money trading futures contracts. However, a person will be hard pressed to find how-to books devoted exclusively to trading Mini-Futures.

The reason I believe is that Mini-Futures lack the glitter and claims to instant wealth found in the more traditional commodity trading manuals.

It’s unfortunate, but an alarming number of new traders will read one or more of the how-to books on commodity trading and jump right in and place a trade order not fully comprehending the real risks involved in trading.

Futures prices can and do make extreme price swings. New traders, because they lack experience, are unprepared to handle the large losses when trading standard futures contracts when prices move suddenly against their position.

Mini-futures are not immune from the same extreme price move. However, the dollar loss is considerably less. Mini futures contracts will let a new trader survive a sudden market shift and have money left in their trading account for the next trading opportunity.What about limiting your losses with Stop Loss orders?

A Stop Lose is supposed to keep you from having large losses. Right? Not necessarily. There is what is called Daily Limit Moves, known as Limit Move, in futures trading.

A Limit Move means that a commodity price can only change up or down a certain amount during a trading session. When that happens trading stops until whatever caused the drastic price shift changes.

When a commodity makes a limit move against you it can shoot through your stop loss as if it did not exist. If you are unfortunate enough to get stuck in a Limit Move against you that last two, three, or more days you will be wishing you never heard of trading commodities. This is not an everyday occurrence that you have to lose sleep over, but you need to be aware of it.

Trading futures can be a very profitable way to earn a living if you treat it as a business. Trading in the commodity markets is an extremely high-risk business and as with any business you must first learn the business so you won’t lose everything you own.

Think of it as if you suddenly wanted to be a high wire performer in a circus. You would be in serious trouble if you put on the flashy tights, went up 50 feet and inched your way out on the wire before you learned the craft of tightrope walking a foot off the ground. Fifty feet is a long way to fall without a net to catch you.

Trading in the futures markets, and even the FOREX markets is considered very risky. You must learn how to do it without putting your entire financial world at risk.

When I say risk I mean how much money you stand to lose if a trade goes against you. Your risks are anywhere from 20% to 50% less with mini futures over the more standardized commodity contract.

As an example a 20-cent move against you in corn is $1000 while the same move in the mini corn is only $200. Another great feature of the mini futures markets is the investment required to trade a mini commodity is also 20% to 50% less. A mini wheat contract currently requires about $400 to trade while the full size contract requires more than $1400.A final note: The FOREX markets also have mini-contracts. But, the same risks apply. This series of articles will hopefully show you how to limit your exposure to a financial disaster.

Most people claim that futures trading is a risk due to the volatile nature of the markets. Nevertheless, futures trading is suitable for those who have sufficient risk capital and a personality that is not afraid of risks. Nowadays there are many successful traders who make constant profit from the futures and options markets, but they are experts who know even the smallest and the most insignificant detail about their business.

Futures trading represents the business of buying and selling contracts on commodities and companies trade futures in order to lock in their cost of needed product. Regardless of how efficient they are, all traders need a tool which helps them track futures and options, eliminate calculation errors, keep track of their orders, handle multiple trades, prepare statistical analysis and so on. This is where futures trading software plays an important role. If you don’t have a program which records your trading and if you are using a simple spreadsheet to record your training data, you certainly need to resort to futures trading software. This software will ease many of your daily tasks and help you be successful in today’s financial market place.

Furthermore, futures trading software satisfies all the needs of individual traders, regardless of the size of the trading account and regardless how frequently you trade. Instead of spending precious time on recording your trades and calculate profits, you can focus on analyzing the markets and on creating trading strategies. It is a proven fact that efficient futures trading software saves you precious time and helps you become successful in your field of activity.

You can revolutionize your trading strategy if you decide to resort to futures trading software, which will enable you to create highly accurate trading systems. All trading software works with stocks, futures, currencies and other financial instruments and its only purpose is to ease your tasks. Moreover, trading software is easy to use and it enables you to develop your own trading strategies. With futures trading software you no longer have to worry about losing precious information or spending too much time finding the trading data you need.

Nowadays, traders working from all over the world have the possibility to do online futures trading. All they need is a computer, an internet connection and a profitable trading system. However, online futures trading represents a competitive business and an excellent trading system is vital if you want to succeed in this field of activity. Fortunately, online trading companies offer traders the information and the resources they need in order to formulate a trading plan; of course, their assistance is not free but it is worth every penny.

It is a good thing that the internet has made current price information available and that software programs have trading programs which predict price direction. Thus, traders have a higher chance of success and they can enjoy the benefits of online futures trading and efficient trading software. Nevertheless, even with the best trading programs at your disposal, online futures trading can never guarantee your success since futures trading is a risk-based business.

Trading software will show you how to use simple and advanced strategies and how to find, verify and trade advanced and intermediate strategies. The trading software also helps traders foresee the future trend of prices, thus enabling you to make gains out of the fluctuations of share value. If you want to cut down your losses and to have at your disposal more time for coming up with a trading plan, it is time you bought trading software.

You can find small business ideas all around you. If you can’t afford to make a big investment than a small business is the perfect solution for you. Try to find something with small costs and a good profit. You can be your own boss if you follow a few great business ideas.

Some of the best small business can be made at home. This will be less expensive than renting an office outside the house. You will be able to deduct some of the expenses from taxes. For example a pat of the electricity bill will be considered as business expenses. You can just rearrange a room from your house. That will be your new working space.

Use Internet as your main tool. An on line business will cost you a lot less than an off line one. The income can be without limits. It all depends of the effort you’re putting in it. Depending of your skills, there are a lot of internet business to choose from. You can make your own program and earn as much as you want. Remember that you have to take this seriously. You will not have a fix payment any more. This is why it’s always better to have a reserve of money for when you can’t work.

A good example for an on line business is freelance writing. If your writing skill are god enough, you can get paid for writing articles. You can choose to write about anything you want. There are a lot of companies willing to pay you for product reviews. So all you have to do is to share your opinion about a product you tried. You can calculate your own income. For example if you want 40$ a day you can check how many articles you must write daily.

Another idea for a small on line business is internet marketing. You can create your own digital products or you can become an affiliate marketer. For this business you need a professional website and a lot of targeted traffic. Keep in mind that you need to advertise your sales website in order to attract clients.

For better results you must set up a good working plan. Write down how many hours a day you would like to work. You can even work during the night.

At the beginning of every month you should set up a new goal. Make sure your goals will be realistic enough.

One may wish to venture into a neatly-chalked out business. They could also look for adding a property to expand thier business. There are others who are bent on reformatting their finance through a remortgage. There are many sites and firms now, which can effectively cater to the ever-expanding visions of such men. The time for commercial mortgage or business finance deals has well and truly arrived with a bang. The UK mortgage market offers handsome deals irrespective of whether you are an established businessman or a small business owner who is just starting out. Business finance can be made available on diverse property-sets. This can include offices, pubs, restaurants, shops, hotel, industrial manufacturing units, and factories and so on. Commercial mortgages have thier own intricacy though. A simple residential mortgage is pleasantly deprived of any kind of complex transaction. Business finance often indulges in a lot of scrutinising. Business finance does not exhibit the flexible and competitive cost structure as witnessed in the residential mortgage market. Lenders are just getting adapted to the new techniques of fixed rate money for small and medium size enterprises. Even those businesses which have sole traders or are defunctory or have a bad credit history need not worry hugely. A scheme or another is always avaliable which makes money borrowing possible for such units. Many top of the line advisors help with counseling and offer suitable advice. Their services are paramount before entering a deal. They speak of the do’s and don?ts in clear parlances. For instance, they suggest the importance of not blocking money with dead plots. Commercial mortgages can allow borrower to get up to 85% of property value financed. Borrowing amount can range between 25000 pounds to 5000000 pounds. It is a self certified loan and generally need attestation from the borrower for a possible default scenario. Though the sub-prime crisis in US has made the lenders a little more discerning, bad credit profile customers are still finding it easy to gain access to such loans. Approval or rejection is meted out immediately, which implies the borrowers do not have to suffer from having to wait to be informed about the fate of their application. Commercial mortgage units can be also put on rent. This makes them partially exempt from the Capital Gains Tax. The clause is simple; the properties can only be let out for commercial purposes. In distant or proximal future, when an owner feels like selling the property, he will have to consider the price fetched as gross. Net price can only be traced after clearing away the mortgage debts, subtracting the 15% down payment and further subtracting the Capital Gains Tax. Buy to let commercial remortgages can help an owner pay his EMI?s through the rent receipts.

The goal of business finance is to raise sufficient capital at the least cost for the level of risk that management is willing to live with. The risk is that a business will not be able to service the debt and be forced into bankruptcy.
Broadly speaking there are 5 main ways of funding a company’s needs:
• Receive credit from suppliers
• Obtain lease financing
• Obtain bank loans
• Issue bonds
• Issue stock
Supplier credit
This is the easiest way that companies obtain funding. Companies buy goods and services and have anywhere from seven days till 6 months to pay for them; when companies need more credit from suppliers the financial controllers will negotiate longer credit terms or larger credit lines. The payment terms can also be stretched and this can work well because the creditors do not want the customer to go into bankruptcy taking their money with them.
Lease financing
Instead of buying equipment, many companies choose to lease equipment – this is a form of franchising.Cars,computers and heavy equipment can be financed for short periods or indeed longer periods.
If it is a short period it is referred to as an operating lease and at the end of the lease the property is still useful and is returned to the finance company.
Long term leases are, in substance, ways are ways of funding a purchase rather than buying the temporary services of a piece of equipment. These are often referred to as capital leases.
For capital leases the leased assets and the financing liability are recorded on the leasing company’s books as though the company had bought the equipment outright.
Bank financing
The next level of financing involves banks. If a company has a credit line or revolver with a bank it draws down and pays back up to set limits of credit as cash is needed and generated by the business. The credit is often secured by assets of the firm however if a business runs into trouble it may not be able to pay the bank and go into bankruptcy
Bond Insurance
Bonds have fixed interest rate contractual payments and a principal maturity. The risk comes to the firm’s owners if they cannot be serviced. The principle bond owners can then exchange them for ownership of the company and oust the owners.
The After-Tax cost of Borrowing
Interest payments for borrowing from vendors, bankers or bondholders are tax-deductible, while dividends to shareholders are not. The after-tax cost of borrowing is the interest cost less the tax benefit.
Stock Issues
Stock issues have non-contractual, non tax deductible dividend payments. Stock represents an ownership in the business and in all of its assets. If additional shares of stock are issued to raise cash, this is done at the at the expense of the current shareholders’ ownership interest. New shareholders share their ownership interest equally on a per-share basis with the current shareholders – this is why analysts say that the new shareholders dilute the interest of existing shareholders.
Summary
In summarising, the higher the percentage of debt to total capital, the higher a company’s value, to a point. At the point where the risk of bankruptcy becomes significant, values fall. The cost of financing decreases as a company adds lower-cost shielded debt to displace the higher returns required by equity investors.

In this day and age, people are looking to save as much money as they can. Unfortunately, the economy isn’t what it used to be and people have had to adjust. But yet, even in these hectic times, time is till moving forward, and everyone is looking to become an entrepreneur.

Given below are the top 10 small business ideas for 2010 that are likely to grow and become very popular over the coming years:

1. Organic Cloth Diapers – The neat thing about this is that it is very simple. You can find organic cloth almost anywhere, and if you own a sewing machine and know how to sew a diaper, you are all set. Right now, people are struggling just to pay the electric bill, let alone pay for diapers. Another great thing is that people will never stop having kids, and they will also never want to stop saving money! To boot, they are contributing to a healthier environment – which is something that has become very crucial…and even trendy!

2. Working From Home Online – A business that lets you promote products, such as affiliate marketing is expected to grow enormously over the next few years. The great thing about it is that the start up cost is small, and all you need is your computer to work!

3. Offer Services From Your Own Home – If you have a designated space in your home that you could call your office, then this would be the perfect idea. Since you are into saving money, a home office is just the thing to have. Most entrepreneurs spend money on office space, which can really cut into their expenses.

4. Organic Produce – As I’m sure you have noticed, everyone is talking about the whole concept of “going green”. There have been more discoveries made about health and the benefits of living a healthy, “green” lifestyle in the past five years more than ever before. People are always looking for a way to save, and be safe also. Organic produce isn’t grown using harsh chemicals, and that is what separates it from the rest.

5. Trash Treasures – Do you have an accumulation of cans, cardboard, old clothing, etc? Instead of throwing it out, find something to make with it. There are a bunch of websites that freely give out ideas on easy arts and crafts. You could start by creating a few things, get your own website, and operate your business right from the comfort of your own home.

6. Outsourcing – This is something else that is becoming more popular as time passes by. The pay is good, and it also gives you a chance to become highly recognized without having to do a lot of advertising.

7. Online Home Business – There are seriously thousands of small business ideas you could choose. You could choose to make or sell soy candles, makeup, household cleaner, t-shirts, office equipment, greeting cards, etc. Either way, it’s something you need to think about that could possibly create a very lucrative profit.

8. Seasonal Businesses – And I’m not talking about just for one season. Something that you could do (and I am sure it would be profitable) would be to buy and sell products from distributors that are put out just for the season. Be sure that other stores such as Wal-Mart and Target do not carry the same products. Make your products 100% unique. For example, in spring, sell “spring-cleaning” products. In February, sell chocolates, and other Valentine’s Day gifts. In summer, sell school supplies, etc. People will want to buy your products because they are unique and the ideas keep changing, so it’s also very interesting!

9. Traveling Businesses – This idea is a lot like a lemonade stand. You transport your products with you and advertise your business by selling at different locations. This will help tremendously with bringing the customers to you.

10. Freelancing Business Ideas – This involves staying at home and providing your professional writing and blogging services to various clients. A great way to advertise is to create a website as well as write for other websites at discount prices to attract more clientele.

Billions of dollars worth of international trade is carried out every day, much of it by small businesses, importing and exporting products from and to their counterparts in other nations. As with every type of business an important task is locating people who will lead you to a signed contract – your trade leads.

Traditionally, businesses have found their international leads by attending trade shows in the target country. But this is an expensive and time-consuming way to find leads and besides, attending a show in a foreign country can be quite daunting.

Fortunately there is a great alternative to attending numerous trade shows – a substantial amount of import-export trade is now carried out online via B2B (Business To Business) trade portals.

B2B Trade Portals

These are websites that facilitate the exchange of goods and services between businesses. Our trade portal at http://www.import-export-guide.com is an example of such a site.

All kinds of products are being traded online between people from many different countries. On our portal we have members from Brazil, China, USA, Yugoslavia, Egypt Australia – every continent is represented. And the products they post are just as diverse – shoes, water coolers, gas, fibreglass insect screens, platinized anodes (whatever those are!).

Typically on an online portal you will be able to communicate with the originators of trade leads, submit details of your company and its contact details, upload images of your products and post your own trade leads.

Whilst all kinds are requirements can be posted on trade portals, including those for services, partnerships and others, the two most important types of trade leads are ‘Buy’ Leads and ‘Sell’ Leads.

Buy Leads

These are the posts you place when you have a need for a certain product.

1) Make sure you are clear about what you require

2) Describe the quantity, quality and size of the products you need

3) Mention if there are any shipping restrictions or pricing requirements

4) The more information you supply the more targeted will be the response you receive

5) Remember you are not obliged to reply to all contacts. But if someone has taken the time and effort to prepare a good proposal then it does no harm to respond

Sell Leads

These are the posts you place to inform buyers of the goods you have available to sell.

1) As with the Buy Leads, the more information you give about the products the better and more targeted the response will be

2) Use an informative subject heading – if the subject doesn’t seem to apply to a buyer they won’t be bothered to read your lead

3) You are dealing with an international market so use clear simple language – no jargon, no exaggeration, no hype

4) Respond promptly to all reasonable enquiries

5) If the facility exists on the portal to mention your company use it to establish your credibility

Security

Without a doubt many conmen and charlatans frequent online trade portals but there are steps you can take to protect yourself from such people:

1) Don’t respond to any suspicious contact or any that is obviously spam – if you show you are willing to listen they will do everything they can to take advantage

2) Once you’ve made contact with a potential buyer or supplier, check out their credentials, convince yourself they are a respectable business:

a) Take a look at their company website

b) Find out who they’ve done business with in the past

c) Ask if they have past clients from your own country

d) Investigate their credit worthiness

3) Use a Letter of Credit (L/C) – this is issued by a bank and guarantees payment to the Seller when all the terms and conditions of the trade are met. It protects both the Buyer and the Seller

a) The Buyer will only part with money if the terms and conditions are met

b) The Seller will always get his money if the terms and conditions are met

There’s a lot of money to be made in import-export and you don’t have to travel far to make it. Whether you’re looking for novel foreign goods to sell in your country or there’s greater profit to be had selling your products overseas, you can find all the prospects you need simply by visiting an online trade portal.

When you look into getting items and services for your business, the goal is to minimize your personal guarantee and avoid touching your personal credit. A personal guarantee makes you and your partners liable if the loan ever defaults. In bad cases, your personal assets could be sold off to pay for a loan. You don’t want to do that.
Let’s look into Trade Credit and Business Financing as options for your business.
Business credit is usually credit between two businesses. If you case it would be between your business and another entity such as Dell computers. If you wanted to get computers from Dell, they would issue business credit in your business name and you would get your computers for your business. This is also known as trade credit. Usually you’re limited to what you can purchase since it’s with a single business. In the Dell example, you’re not going to be able to use Dell’s line of credit to purchase an automobile.
Usually with this form or credit there’s no need for a personal guarantee. Some vendors may still ask for a personal guarantee but it’s fairly uncommon. The higher your business credit score the less likely it will be that they will ask for a personal guarantee.
The other form of financing is business financing. Business financing are lines of credit for your business usually done though a bank. Banks will always want something secured. If they can’t do it via an asset then they’ll want a personal guarantee. This puts your personal items such as your own car, home, and family heirlooms at risk. If you default on the loan, a judge can order your assets to be sold to repay the loan.
The advantage is that you get more options in relation to items or services. It just depends on how you got the loan or financing. If you went into the bank and asked for financing for a truck then the money should only be used for a truck. However if the financing was for a loan, then you have more leeway. With the monies it’s up to you to decide what you should ethically get. You’ll probably get what was in your business plan but if there’s money left over then there’s more options.
Here are some tips to help you with your credit.
1. Try to get your debt to not show up on your credit report.
a. Sometimes businesses won’t report the debt if everything is ok. If this doesn’t happen then your debt to income ratio looks better. This gives you options for another loan if an opportunity comes your way.
2. Check your personal credit reports.
a. A good online service such as annualcreditreport.com or myfico.com allows you to check and monitor your credit reports. This will help you track mistakes and fix them quickly.
3. Separate your credit reports.
a. Make sure to get credit in your business name. Your personal credit is an important asset and you don’t want a business mistake to keep you from being able to get a house, automobile or anything else that’s important to you in the future.
Following those tips should help to protect you and your business. Please, don’t get into the habit of damaging your personal credit. It’s your number one asset. You could always start another business but you can’t legally start another you.