Money Management from a Business Perspective

Good article from Kaz Domagalski. Visit articles base.com Administrating a business is very similar to organizing a home environment, with all the different expenses to consider preventing the business from going under with deficits and bankruptcy. A business has "children" in terms of all the employed operatives engaged hand-in-glove and with utmost efficiency to make sure that the business finances float above break even. There is however, one main focus for a business to thrive and exist in security and balance, and that is the knowledge of knowing how to manage money in your business, especially with overhead and operational expenses. Overhead And Operational Expenses Overhead and operational expenses are all billings, including phone, postage, insurance, vehicle expenses and all general outflow of financial allocation in order for a business to run competently. These include the wages and payroll system for all the employees, and staff who handles administrative jobs. Also in this respect are the different community utilities such as the water, electrical and gas services. Another consideration would be the internal service personnel costs such as the security, and janitorial services. Finally, all these are subjected to the different taxes incurred for the building, business, benefits of employees and other imposed expenses from the local government. Without appropriate and substantial external or personal funding for any of the areas mentioned, any business will surely have a hard time operating at maximum efficiency and would be in danger of consigning the whole venture to risk of either being overrun by competitors or be shadowed by loans and outstanding bills. Wages And The Payroll System Employees and administrative staff are dependent on the wages and salaries they pick up from the administration of a business. One should consider this as the lifeblood of any entrepreneurial endeavour. Too high an hourly rate in wage and one would expect a negative profit for the business. A small hourly rate would result in employee dissent and probable risk of key employees migrating to competitors who pay larger salaries The employee wage rate is equally as important as balancing the allowance of kids if compared to a home environment. Incorrect or ill-advised allocation of available funds, neglecting budgets, or over budgeting will affect other areas in the business that would have benefitted from appropriate financing. Utilities Public utilities are organizations that maintain the infrastructure for the public and business services. As such, they are subject to forms of public control and regulation ranging from community based groups to local government monopolies. The term ‘utilities' refers to services, both maintenance and administrative, provided by these organizations and consumed by the public and business. Natural gas, electricity generation, electricity retailing and tele-communications are key business elements which should be respected when critical budgeting decisions are projected. Internal Services Internal services which include janitorial and security services are equally important to businesses. As the company grows and becomes a more complex organization, larger buildings will require adequate facilities for an expanding workforce. These two services should not be neglected as their importance not just for physical security and hygiene but aesthetically reassuring from a visiting clients perspective. Furthermore, if the business is engaged in manufacture, warehousing or retail, a security service is essential to provide the sense of security to clients as they will be entrusting their hard earned cash and resources in exchange for services or goods that the business offers. Taxes Paying taxes on time is a major obstacle faced by companies, especially small, recently started businesses by the end of the financial calendar. Business taxes can be summarized simply by calculating your total revenue, reducing this amount by as many tax deductions that are currently available and then paying tax due on the remaining amount. Sounds easy! However, filling in lengthy forms and ticking respective boxes requires expertise to avoid errors and, before going any further, the first thing to consider which is crucially important at the end of a financial period is hiring a professional team of tax experts working for you. You may believe that you are able to do this work yourself, and maybe you can. But, consider money well spent on a team of professionals to help you do it better.

Business Plan

How to Start a Business: Business Plan This article by Brian S. Mahoney from articlesbase.com is a great one. Millions of people want to know what is the secret to making money. Most have come to the conclusion that it is to start a business. So how to start a business? The first thing you do to start is business is to create a business plan. A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. A professional business plan consists of ten parts. A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. A professional business plan consists of ten parts. Executive Summary The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor's interest. 2. Company Description This section of your business plan provides a high-level review of the different elements of your business. This is akin to an extended elevator pitch and can help readers and potential investors quickly understand the goal of your business and its unique proposition. 3. Market Analysis The market analysis section of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions. This section is usually presented after the company description. 4. Organization and Management Organization and Management follows the Market Analysis. This section should include: your company's organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors. 5. Service or Product Line Once you've completed the Organizational and Management section of your plan, the next part of your business plan is where you describe your service or product, emphasizing the benefits to potential and current customers. Focus on why your particular product will fill a need for your target customers. 6. Marketing and Sales Once you've completed the Service or Product Line section of your plan, the next part of your business plan should focus on your marketing and sales management strategy for your business. 7. Funding Request If you are seeking funding for your business venture, use this section to outline your requirements. 8. Financial Projections You should develop the Financial Projections section after you've analyzed the market and set clear objectives. That's when you can allocate resources efficiently. The following is a list of the critical financial statements to include in your business plan packet. 9. Marketing and Sales Once you've completed the Service or Product Line section of your plan, the next part of your business plan should focus on your marketing and sales management strategy for your business. 10. Appendix The Appendix should be provided to readers on an as-needed basis. In other words, it should not be included with the main body of your business plan. Your plan is your communication tool; as such, it will be seen by a lot of people. Some of the information in the business section you will not want everyone to see, but specific individuals (such as creditors) may want access to this information to make lending decisions. Therefore, it is important to have the appendix within easy reach. How to make your business plan stand out. One of the first steps to business planning is determining your target market and why they would want to buy from you. For example, is the market you serve the best one for your product or service? Are the benefits of dealing with your business clear and are they aligned with customer needs? If you're unsure about the answers to any of these questions, take a step back and revisit the foundation of your business plan. The following tips can help you clarify what your business has to offer, identify the right target market for it and build a niche for yourself.

Training is Big Business

I reproduce some ideas from from Bersin and Associates and Training Industry.com. One of the most important (yet often least respected) parts of business is corporate training. U.S. businesses spend on average over $60 billion per year in this area supporting an industry that includes hundreds of thousands of training professionals, content and tools providers, and technologies. Well this year, driven by the tremendous need for workforce skills, spending has exploded. U.S. spending on corporate training grew by 12% in 2012, the highest growth rate since we started our research. (Source: The Corporate Learning Fact book ®, Bersin by Deloitte). Training Industry.com estimates total spend both in source and outsource at US$ 307 billion with 42% outsourced. Growth is about 5% each year. This increase likely reflects three major forces shaping the US workforce: The need for specialized skills is increasing. Today, the top sought-after positions require extensive preparation and education to achieve company goals, reflecting the tremendous need for skills. Many high-value jobs (IT, manufacturing, sales, marketing, finance, etc.) require deeper and deeper levels of skills, and more than 60% of U.S. business value now comes from “intangible assets” – intellectual value. Workforce education and skills have atrophied. Employers tell us that despite the high level of unemployment in the U.S., nearly one-third of young candidates do not have the core reading, writing, and problem solving skills they need to be productive on day one. Many new hires need skills development in order to achieve their goals. Leadership development and succession management have become critical business needs. When we ask top HR executives to rank their top challenges, the #1 cited problem is “gaps in the global leadership pipeline.” Businesses have watched their workforce shift from baby boomers to younger workers and now should rebuild their leadership capacity. Such effort takes formal and informal training. Shift toward Informal Training As technology becomes widespread around the world, corporate training has shifted . This year companies grew their “informal learning” spending by 39%, demonstrating a steady shift toward social learning tools, knowledge sharing, expert directories, and other forms of information sharing. Mobile learning is now becoming mainstream. As this shift has occurred, the instructor led training industry has also evolved. Today, companies spend only about 30% of their total L&D spending on instructor-led programs and this level has flattened off. The early promise of “all online training” has not proved to work in many cases, and companies have settled into a world of one-third instructor-led and two-thirds technology enabled training. Many High-Impact Organizations Spend More In last 2012, Bersin launched our High-Impact Learning Organization Maturity Model®. This model breaks all training functions into four levels of maturity, using more than 10 years of research and studies of thousands of organizations. Our research shows that the high-impact organizations (those at levels 3 and 4) deliver significantly greater business outcomes than those at level 2, and more than 50% greater outcomes than those at level 1. This year’s Fact book, for the first time ever, breaks down detailed benchmarks by maturity level. While many organizations view corporate training and development as an expense, clearly the high-impact organizations see it differently. Companies at levels 3 and 4 actually spend 34% more money per employee than those at levels 1 and 2, showing that “reducing the cost of training” is not a sound strategy. Many high-impact organizations spend more, measure the impact of training more broadly, and get far more benefit. In fact our research shows that these companies not only perform at higher levels, they have higher levels of engagement, retention, and employee and customer satisfaction. The New Era of Global Skills Imbalances Today’s business climate is one of global skills gaps. New technology, shifting markets, and changing demographics mean that manufacturers, service providers, telecommunications companies, technology companies, healthcare providers, and many other industries live and die by their skills. As companies globalize their businesses, the ability to build skills has become a deep competitive advantage. The global economy may not be in full recovery, but the world of corporate training is. We believe this dramatic increase in spending demonstrates improved business confidence and the clear gaps in the workforce. Now is the time to revamp your L&D organization, and we are here to help you. From Bersin and Associates.

The Global Journey of an Asian

My 15th book The Global Journey of an Asian outlines my journey from being a professional into an entrepreneur. The book launched on January 9th is available at the book stores www.amazon.com and www.mphonline.com Many readers have called to discuss some key ideas prompting me to start writing this blog knowing fully well I am an occassional blogger but I hope to share some dieas through this blog. Writing a business plan is important for a successful entrepreneur. management professionals call it codifying the idea. Herein I quote some ideas from a great interview from the Harvard Business Review. Harvard Business School Professor William A. Sahlman's article on how to write a great business plan is a Harvard Business Review classic, and has just been reissued in book form. He says: •A business plan can't be a tightly crafted prediction of the future but rather a depiction of how events might unfold and a road map for change. •The people making the forecasts are more important than the numbers themselves. •What matters is having all the required ingredients (or a road map for getting them), not the exact form of communication. •The best money comes from customers, not external investors. Bill Sahlman says: 1. Writing a business plan is a seminal moment in the life of a new venture. Doing so entails committing to paper a vision of the factors that will affect the success or failure of the enterprise. People take the exercise very seriously and get emotionally invested in what they produce. 2. A business plan can't be a tightly crafted prediction of the future but rather a depiction of how events might unfold and a road map for change. I emphasized the notion that successful entrepreneurs constantly seek the right mixture of people, opportunity, context, and deal. They anticipate what can go wrong, what can go right, and they try to balance risk and reward. 3. Business plan writing is not science — it's art and craft. 4. It is important to emphasize the importance of controlling your destiny by being conservative about access to capital. Many great ventures in the Internet era (pre-1999) ended up failing because they assumed they would have continued access to cheap capital. Many of those businesses failed, though the underlying idea was sensible. Similarly, we have seen a period when capital markets got ugly, which has a negative effect on all ventures, sensible and nonsensical. 5. He reinforces the idea that entrepreneurship is critical around the world. We are confronted with many crises from health care to the environment to global poverty. Solutions are likely to come from talented private sector and social entrepreneurs. 6. Business today is global. Take a company like Skype. When I visited Skype several years ago, it had 125 employees from 23 countries. The development team was in Estonia, and its headquarters in Europe. Skype had raised seed capital in Europe and in the United States. That's the new model. 7. What matters for a good business plan is having all the required ingredients (or a road map for getting them), not the exact form of communication. On the first floor of the Rock Center at HBS there is a copy of the original business plan that Arthur Rock wrote for Intel some 40 years ago. It's only a few pages long, but it describes an outstanding team pursuing a new technology. I have seen compelling business plans in the form of a few PowerPoint slides, a couple of scribbled pages, and a brief video. 8. I think entrepreneurs, investors, and employees need to be suitably skeptical about what they read in business plans. I have read perhaps 5,000 plans and have only seen three companies really meet their plan. That sounds like a pattern to me. If anyone makes a bet based on the company doing exactly as written, he or she will be sadly disappointed. At the same time, every player has to be somewhat optimistic about the possibility of overcoming inevitable setbacks. I think of ventures as roller coasters, not rocket ships. 9. The best money comes from customers, not external investors. I think entrepreneurs need ideas that are so compelling they can get early money from customers. I also believe that great teams with great ideas can continue to access capital on quite attractive terms from outstanding investors. If the short term looks unsettled, that often means that focusing on the long term has a big potential payoff. 10. Entrepreneurship is a blend of ideas, persistence and execution. The Global Journey of an Asian is available at the book stores www.amazon.com and www.mphonline.com