Saturday, October 31, 2015

Asset Allocation: Principles of Sound Investing

Any idea of sound investing that has nothing to do with stock market?

Like when you notice the street vendors who are usually selling different items: sunglasses, hats, umbrellas. Items can be used in sunny days while some in rainy days, different items for different seasons at a time.  To diversify the product line, the vendor has to sell different items to reduce the threat of losing money at a given time. Make sense? That’s the basic of allocating assets and diversification.

Sound investing is an approach to distribute money to different investments in order to gain more or to make up from one losing investment. The basic in asset allocation is to distribute the investment portfolio to different asset categories: cash, bonds, stocks, etc.

Allocation of assets work best depends on each preferred time horizon and the willingness to tolerate risk. Time horizon is the preferred # of days, months or years to invest to different asset categories to attain the financial goal. If you prefer for a longer time horizon, you might be comfortable on a more volatile or riskier investments where you can wait a slow economic cycle; whereas, if you’re saving up for your child’s education, you might take for a less risky investment due to a shorter time limit.

Risk tolerance is the willingness to gamble for losses to get more potential returns. There are types of investors according to risk. If you are an aggressive type of investor, you are more likely to have high-risk tolerance that is willing to take risk of losing money to get the desired result; it’s like seeking two in the bush.  But, if you choose to preserve your original investment, you are likely a conservative type of investor.

Importance of risk
Reward comes after risks, as the saying goes no pain, no gain. However, you have to understand what you have to risk and what reward you’ll get. Because, to risk, there are more chances that you could lose all. There’s a reward in taking risk, but, understanding of what you risk and what you’ll get is the key to get your desired investment return. For example, if your financial goal has a long time horizon (retirement), carefully investing in assets that are riskier is the best method to make more money. Otherwise, if you have short term financial goals, cash investments might be a good option.     

Understand your choices
Securities and Exchange Commission won’t recommend any investment products. Therefore, before you leap into investing, you have to know what investment products exists, how would you like to risk, which investment product would suit your goal, risk appetite, and money you can afford to invest. 
Investments to choose from are stocks, bonds, mixed funds (stocks & bonds), money market funds/deposits, mutual funds (stocks & bonds through investment companies- Insurance and Asset Management Company), UITF (trust fund through banks), real estate investment trust fund, exchange traded fund, and government securities (T-bills, notes, municipal bonds). Investing in mix asset categories can be a good strategy. Following are the review for the 3 major asset categories:

·         Cash- cash equivalents: savings and time deposits, money market funds and deposits, government securities. These are the safest investment but gives lowest returns. There’s a slim chance of losing money for this kind of investment. Investment losses in cash equivalent do occur but not frequent. The only thing that is most concern of investors in investing cash is inflation risk. Once inflation overtakes, it will take away all investment returns and reduce the cash value over time.
·        Bonds- Usually less risky and gives moderate return compared to cash. When you reach your financial goal, you might increase your bond holding which is attractive to investors despite for lower growth potential. Similar to stocks, other bonds offered carry higher risk but higher returns.
·        Stocks- Historically, stocks are the greatest risks in investment but provide highest returns, if you know what and when to invest. Stocks offer greatest growth potential; sometimes it hits home runs, sometimes it strikes out. There volatility makes stocks a risky investment for short term. Others who invested in stocks have lost money and losses were quite dramatic. But those who have been endured the volatile stock returns over longer periods of time have been generally rewarded with greatest returns.

Above are the most common investment in asset categories. You would likely choose any of the asset categories for your retirement savings plan or education (college) savings plan. There are also asset categories like precious metals, commodities, real estate, and private equity. Other investors consider those asset category would suit their financial goals. Asset categories have specific risks; therefore, before you invest, understand the risks of what you invest and make sure the risk you take is bearable and fit for you.

Wednesday, July 8, 2015

How to reduce monthly costs

It’s the biggest challenge for our personal finances to figure out how to reduce our regular expenses that gallops up our monthly budget. The continuous expenses left us penniless.  If you don’t do few sacrifices, you’ll always be left penniless. So, we gathered for you the following approaches for cost-cutting that you may use for your decisions in personal finances.

  1. Debt reduction
While many of us do not have cash available to completely eliminate debt, the method of debt reduction will help you decrease your monthly expenses. For students, instead of hoping for better rates of consolidating student loans, spend time to find a better option for consolidating student loans which can be paid off every month. You may contact your local credit union or some lending institutions. Less interest rate reduces monthly payments without drastically increasing the overall cost. An example for a local credit union in the Philippines is Co-op (cooperative). A cooperative has less interest rate compared to banks and other financial institution because it has been always a tax-free. Normally cooperative has a maximum of 3% interest rate.  All you have to do is to become a member and you can enjoy the benefits of being a member, where you can apply for different loans (salary loan, pension loan, student loan, home loan, car loan, etc.).
If you’ve got an increasing amount on your credit card, you can request for a rate reduction. You may request a zero percent balance transfer to other cards until you get a healthy situation on your personal finances. The purpose is to “stop buying on credit” until you completely paid your total credit.
If you have a lot of valuable things on your closets where you can simply live without them, you may sell your unused items and pay off your debts especially if your debt load becomes unmanageable.

  1. Energy bills
The onslaught energy costs make us crazy when thinking where to get money to pay the entire bill. When you realize that your bill is 30% higher than your salary, of course you will not be free from debts. And it will always be your fault because there are many ways to decrease energy bills yet you do nothing.
There are few things you can do at home. Installing CFL or compact fluorescent light bulb is more economical than the regular fluorescent lights. CFL has a longer lifespan for up to 3 years (if you choose the best brand) with less electric usage. A regular 75 watts fluorescent has a 4-times rate compared to a CFL 20 watt where you’ll save up to $1 each CFL bulb. Count how many regular lights you have at home then switch them to CFL bulbs. Imagine how much you can save if you have switched 5 regular fluorescent lights to 5 CFL bulbs. You’ll save more or less $10 a month. It will make it lesser if you change your habits at home like turning the lights when not in use.
Your habits at home can make a difference to your energy bills. When you get home from work, instead of turning on your TV and watching TV shows, you can just simply go to bed, relax yourself, and have an early sleep so you’ll get a wonderful morning when you wake up. Or have a little chitchat with your family while eating dinner and watching TV news then go to bed after.
Unplugging unused electrical devices can help you lesser your energy bills. Most of the electrical devices when plugged and unused for a long time (especially night time when everyone is sleeping) have a ghost charge. And through unplugging them can eliminate the usage. 
Installing a programmable home and kitchen ware can help a lot too. When you’re asleep or perhaps not at home, a programmable thermostat automatically alters the heat and cool temperature of your home. Make use of timers when to turn off your electrical devices and use power strip when to turn on so it will automatically turn off the ghost charge especially at night.
Make your home air sealed so it prevents loss of cool air and warm air when using a cooling machine and heating machine.

  1. Automobile expenses
Automobile is a headache when it decreases the value then consumes more fuel and often requires monthly repairs and maintenance. How can you save from your automobile?
Keeping tires inflated improves gas mileage in every 2-PSI of air you added to your tires. Just have your car tires check its air pressure in a local gas station at least once a month. If you’re automobile is sitting in your garage all day, better sell it so it could remove your insurance expense and you can use the money from selling off.
You may hitch a ride from someone else sometimes so it can reduce the wear and tear of your car and its gas expenses. But the best way you can save money from your automobile is to use public transportation. From going to work to stopping by at a store or shopping center after work, you can save money on gas and car maintenance. You can sometimes leave your car at home or park on a station, this definitely can save you from automobile expenses monthly.    

  1. Bills on meals
Many of us are convenient to eat outside because we thought that it’s a time saver when there’s no need to shop, cook, prepare food and wash the dishes after. We do not consider how much we can save from cooking our own meals seeing that we have a bigger family. If you’re solely living at home and when there’s no need to budget, yes, you can eat out everyday. But for those who seek for ways to lower monthly bills on food, the best way you can save is to cook your own meal. This way you can control what to buy and what to eat. You can shop raw food for a week and have it budgeted. When you cook and make plenty of them, you can simply put the leftover in the fridge for future meals or better take some at work. If you are a type that you don’t want to take too much time to cook, you can just simply prepare easy recipes and choose the one that is freshly utilized in your area.
If you are fond of vegetables and when you can see that your lawn or backyard is too spacious, you can start gardening with your favorite vegetables. Furthermore, you can make it a daily habit to visit your garden, take time to feel the fresh air while looking forward for its fruit; as the saying goes “its two birds on one stone” - when you eat less in a healthy way making you fit effortlessly.

  1. Entertainment expenses
Too much entertainment expenses might end you up penniless. The same way when you’re too much happy, you will never realize what you lost. If you think that your club memberships eat too much money monthly then, you can cancel the membership. Let’s say you are a member of a gym club and that throws too much money, you still have other ways of doing similar things in a gym without paying. By taking some time to do some general cleaning at your house, lifting and rearranging things, not just you’re doing natural to sweat yourself but as well as pays you off from making your home tidy. The same way as getting subscribed on newspaper and magazine when you’re always updated yourself on the internet, that’s useless.   
You can entertain yourself without paying more by reducing your entertainment options. Instead of going to night clubs every night just to socialize people, there are many out there who need our help and attention that we may be happier inside after we reach our hand to them. Visit the nursing homes, orphanage and other foundation homes. Instead of seeking entertainment outside, by giving your time to others, that will definitely give you entertainment that nothing can pay off.  

  1. Cellphone bills
Take time to assess yourself in using your cellphone: how much do you use it? How often are you on your cellphone? Are you the same as others who always glued oneself at cellphones? If your answer is yes, then better start thinking of ways on reducing cellphone bills. Getting a regular prepaid airtime is costly. You can save more on monthly promo at unlimited call and text with a limit of browsing rather than using a regular airtime. If you think you need more for business use, you can always save from getting monthly plans or subscription.
On the other hand, if you are using your cellphone for emergency use and without taking much time at it, you can always have a regular prepaid airtime to budget only for necessary things.  

  1. Eliminate redundant services
Household services? Why hire where you can do it on your own? Learn to be meticulous at your own things. If only you could give yourself a chance to do those things, you would definitely learn that the right thing on doing it right is not by getting others do it for you. Not only you can save money but you give time your entire family to be part in your household activities.  

  1. Reduce clothes shopping, expensive appearances
For some who wants to always look good with new accessories, there are actually many ways to make your own fashion that is only fathomable by you, instead of buying clothes and accessories every month. You just only need to be creative. If you have immeasurable number of garments, better stop buying for new. Dig up your hidden treasures at your closets and start matching your old clothes to make them new. If there are more which you could no longer wear then, better sell them at an auction. If you can’t help not to buy one, a bargain or on sale clothes can save you a lot. The same thing in grooming, it doesn’t have to be expensive to keep up appearances. By having your hair styled or cut daily or weekly, you can have it monthly. Getting your nails done by a manicurist everyday is too costly. You can simply have a manicure party and invite some friends to do it at home instead. It doesn’t need to be an expensive shampoo to look your hair great. Even doing facial at a beauty center can be done at home by picking the best product for you and do it at home after working hours.

  1. Get an inexpensive location
If you are renting a home, you can take time to choose a good environment at a less costly area. It doesn’t have to be complete in things nor be a luxurious. As long as you get enough sleep, you can take time to hang out inside, then it’s a better option than always chasing your dreams. The tendency of getting an expensive area is that, your most need maybe sacrificed. You can’t have all expensive things at a time for you will lose everything: time, money, dreams and ambitions.  Above all, you’ll lose yourself if you can’t manage your responsibility.

  1. Eliminating habits

Many are getting more debts because of keeping the habits. May it be smoking, drinking, excessive travelling, a drug addict, a philanderer and others- all of those can drain the budget. If we are going to calculate, keeping things without any real benefit makes one person a loser. Aside from being broke and irresponsible, it’s the selfishness that dominates for making others worry.  Imagine if your habits cost over hundred bucks a month, how much you could gain should you save your money from the useless habits.     

Thursday, April 16, 2015

What are the in-depth Responsibilities of Franchise Ownership

In business, franchising is a strategy to get and keep more customers. It’s a system to create an image in the customer’s mind on how the product or service can be of help to them. It is more than a method of product or service distribution that will satisfy customer’s needs. Through franchising, it allows the brand to be easily identified, allows franchisees to be successful in doing the same method of business, and hence it keeps and gets more customers as the marketing system is proven to dominate the market.

The success of franchising lies in understanding the business, its whole system, and the legal consequences of the franchiser-franchisee relationship. You as a franchisee will focus on working with the company managers and other franchisees to leverage the brand. Which means the entire focus is to attract more customers and keep the existing one.

Investing into franchise can be a reducing investment risk. However, aside from the fact that is more costly, you may be required to surrender the entire control of the business while taking care of your contractual obligations in franchise ownership. All throughout this article explains your responsibility of franchise ownership and what to expect in franchising.

Franchisee fee and other operating expenses 

You’ll pay the initial franchise in exchange for procuring the right to use the brand name and operational assistance. The initial fee is non-refundable. Other fees are rent, building an outlet, initial inventory, operating licenses, insurance, and grand opening fee for promoting the new outlet. Aside from that, there is monthly royalties that you have to pay the franchiser a percentage (30% - 40%) of your monthly gross income. It is a payment for the right in using the franchiser’s name, and you have to pay all throughout the duration of the franchise agreement. Whether or not you receive the operational support, you still have to pay the royalties. At times, you’ll pay an advertising fee not for your own outlet. Whether advertising for a new product or national advertising to attract new franchisees, you still have portions to pay the advertising for the brand.

Overall controls 

Franchisers normally control franchisees on how businesses will be conducted. This is to ensure uniformity of the system. You as a franchisee cannot exercise your ability in business judgment right away. You have to let the corporate know of your plans especially in management. You can’t just decide for your own outlet as all decision making will be done by the franchiser. Even the site and the building for your own outlet, the franchiser may not approve the site and other things you want.  In addition, there is a specific territorial that limits you to open other outlets. That even you want to move to a different location that is more profitable, you can’t just simply shut the current operation off and open another outlet.

Franchisers may enforce the design or appearance of the goods to standardize, so that the customer receives the same quality service, the same goods in every outlet. Some requirements are design changes or periodic renovations that you have to comply with those standards and you know that operational cost will increase. 

There are more restrictions than you imagine: method of operations, services or those goods offered for sale, sales area. A good example for this is franchising a restaurant. You can’t just simply add your own menu and omit the unpopular. Franchisers will never allow you to do this since you are using their name. One mistake that affects customer from one outlet will shake the entire brand. Of course, franchisers will take all the necessary actions to protect the brand. Moreover, hours of operation will be decided by the franchiser, not you. Often you have to agree the pre-approve plans, advertisements, employee uniform, and accounting procedures. Even purchasing supplies, you are required to purchase from the approved suppliers. You can’t just buy elsewhere even you can get it at lower costs.

Contract termination/ renewal 

The franchiser will have the right to terminate the contract should you breach any obligations. In fact, the contract in franchising is limited, and no guarantee for renewal. Failure to pay royalties, or failure to abide standard performance or sales restrictions often will cause the termination of contract, and it’s a pain to lose the investment. The franchiser may raise royalty payments and you can’t just bargain to lower the price. Whether you like it or not, you have to agree the number of years that your outlet will have to run. If they will say the contract will end 5 years but then you want to renew it for another 5 years just to make up the total investment, you still need to end it in 5 years. If they will say renewal is not allowed, there’s nothing you can do but kill them (just kidding).

Now you know that the risky part is when you couldn’t get the total investment. Here’s the secret. Franchising is a marketing strategy to gain more customers upon expanding outlets in different locations. The franchiser is the owner, and you as franchisee is only the investor. Don’t be stupid enough to think that the gross income of your outlet will be entirely yours. Even if you have million dollars of gross income a month, 40% of that (depends on the royalty fee stipulated in the contract) will go directly to the franchiser. The remaining 60% will still not be yours. You will have to pay your liabilities: employees, purchaser (where you owed your materials), and other operational expenses. You will realize in the end that only 0.50% is left for you. Sounds bad? Yes, that will happen if you jumped directly into franchising without reviewing the possibilities.

In order to avoid failures in investing franchise, following are the checklists which will help you decide:

  1. Are you ready to lose as much as you have invested? If you aren’t a risk-taker, it doesn’t lead you anywhere.
  2. Do you have enough financial capacity to finance the future costs in franchising?
  3. Do you have additional savings to live on while opening a franchise?
  4. Do you have knowledge, relevant education or experience in the business?
  5. Are you a type of going along with the flow (whatever your franchiser wants, you’ll provide?)
  6. Are you ready the consequences of the obligation you have signed up?
  7. Do you think you can survive with the type of business (franchising)?
  8. Do you think you can stay long with your franchiser?
  9. Are you ready to work with your franchiser?
  10. Do you understand all your obligations in the contract including the termination of the contract anytime?

If your answers to all of those questions are positive then you’re good to go. You just need to shop a franchise that will suit to your interest and public demand. You may attend a franchise exposition that will allow you to compare and view a variety of possibilities in franchising. It would be better to choose a franchise that suits your experience, goals, and investment limitations. Always take time to study on what the franchiser is offering to you. Make sure all your doubts and questions are cleared before investing a franchise. 

Wednesday, April 15, 2015

What is Credit Collection and Control

When banks, other financial sources, and other businesses deal out money and when they couldn’t make time to collect as they’re always busy, the credit collection and control takes in charge for this. The job is normally engaged in collection and control of debts. It is not actually a heart-less job that’s all about money. It is basically helping people to get out of debt and control their debts for them. Through offering payment plans that will fit for their situations, you actually help them. You will be working with individuals, businesses or even third party collection agents. You have to make sure that payments are made and ensure that overdue debts will be paid. Responsibilities for this job include organizing customer files (paperwork and admin), recording payments made, straightening out payment plans, chasing debtors when late payments, or even tracing debtors who moved out without letting the company know their new location or address. If the latter arise, this is the time you ask a help from telephone providers, perhaps post office to locate new address, and credit bureaus.
Is this job perfect for you?

There are companies who offer for this position in a freelance basis. So, if you are looking for a part-time, full time or could be flexible working shift, they’re all available. To work in a shift schedule, expect to work during evening and weekend. These hours are normally used to contact debtors who are unavailable during the day due to their work commitments or appointments and other personal reasons.

Your duties are usually done over the phone. If you have local clients, you’ll occasionally leave the office and visit them. Now, talking about the job if this will fit for you or not. If you have a temper like hulk with zero patience, I couldn’t say this is for you. As you normally engage people who can’t pay debts, you’ll go after them and you need to talk to them in a tactful and calm manner. I wonder if you can get money any sooner after hollering at them, what do you think? Though being positive and calm is a required personality for this job, you can’t be spineless either. You know there are people who can come up with different excuses as to why they can’t pay (my rabbit ate the notice you sent). You have to be assertive to ensure they will make payments.

Overall, this job needs a person who deals with people either frontal or over the phone. An exceptional communication skill is necessary. This is not only explaining how much the debtors owe, you have to give them options if they can’t pay on time. An experience in customer service will help you with this job in dealing with people.

Skills you need to master are: admin skills, communication, customer service, negotiation, organized, can work with deadlines, and computer skills.

With all those skills you’ve mastered, there’s one thing you must master…the kind of stress it will give to you. When people can’t pay, of course, it’s your job to follow the procedures to get the money back. These involve hard method by working with bailiffs, solicitors, and go with the court procedure. So, expect tantrums, more tears, and a lot of curse words. Now, if you’re somewhat sensitive and you hate confrontations, this is NOT for you.

What are the qualifications?

Financial experience such as bookkeeping or accounting may help you land on this job. Some companies require formal education such as accounting graduate or CPA. But in international countries, going to universities is not necessary. An associate course in credit law, insolvency, litigation, customer service and telephone techniques are required for the job. You might acquire skills from the CSA or Credit Services Association and ICM or Institute of Credit Management. In addition, your qualifications from them may help you advance your career into senior positions in the future. Qualifications include Diploma in Debt Collection, Introductory course in Credit Management; advanced courses include legal proceedings in Diploma in Credit Management, and a Degree in Credit Management. 

Wednesday, April 8, 2015

Excellent Tips Before you Engage into Franchising

Franchising grows exponentially every year. This is maybe the reason people are getting more interested to invest in franchise instead of setting up a new business. There could be a lot of advantages that people would be more willing to take risks in franchising; but what others do not know about is that, misconceptions may trap them that could ruin their entrepreneurial undertakings. Therefore, it’s important to arm entrepreneurs with the knowledge will lead to the point where one can decide to franchise or not. This article will help you pinpoint some obstacles in franchising and how you can handle them. Hopefully, you’ll be wiser before you engage into franchising.

  • Franchising is easy as 123. People would think about franchising easy, because after paying the fees they’ll go to training and seminar then viola! An instant business! Yes, it’s true that you’ll get a crown to start because you got into franchiser’s systems, but this doesn’t mean you’re walking in the park. Franchising needs commitment and so as the brand. It means you have to work hard on it. Your business will be now your concern 24/7. You’re going to put longer hours in it. You can’t just open the business, sit, then shut down anytime and come back on the next day. You’ll give your business its paid attention. It’s not like a normal employee would go to work Monday-Friday, 9 till 5, keeping himself in weekends or taking absent when not in the mood. The good thing for an employee is that, he’s still getting a salary in pay day, guaranteed. But when you’re starting in franchise, you have to be pro-active and hands-on. You may not be sure if you’re getting anything when you’re just starting a franchise. There are more fees to take care: monthly bills, royalty fees, monthly advertising fees, and so on.

  • Franchising is an instant success. This will take you nothing from the truth. Just because you see a lot of outlets, it doesn’t mean when you operate you’ll get loads of money. You must be thinking that more branches mean huge sales and definitely, the business is doing well. Why not try to visit any outlets especially during peak hours? You might end up thinking how awful they were performing the whole day. In this way, you’ll go beyond initial impression.  If possible, have a business talk with the existing franchisees. That way, you’ll get a vibrant picture to see how well they sell. You might realize that peak hours don’t last in the day’s entire operation. It will be your advantage if you clear this misconception from the start. As explained above, franchising will take lots of work. So, it’s never be an instant success if it will take time for a concept to work. Be mindful of the entire operation, put more hours in it, be hands-on all the time, and know what works well and not. That’s guaranteed your success!

  • Franchising is easy to operate anywhere. We are seeing restaurants left and right in the entire city, we’ve seen the same in the provinces. So, you must be thinking that this concept will do the same to retail and service. But, you might change your mind if we’ll discuss an example. Ever heard of food and drinks in small carts or booths? It is the concept that you cannot open it everywhere.  For example, you’re interested in serving cold mixed drinks in a small cart or booth. You’ve found one franchise business that expands very fast because of its high demand, since it’s summer. So, you open a franchise ahead of your house. This will be easy for you as you have your family members will operate while on summer break; on top of that, you won’t be paying for rent. The problem is, you failed to do a feasibility study. Sure, you save more on operating expenses, but are there more people in the area who will be interested to buy your product? Is your location a densely populated area? Therefore, you have to check the demographics: check the number of people, the busiest times, and verify if there are more people who can afford the products. Make sure you do those first before opening a brand.    

  • There’s a good deal, so sign up right away. Franchiser has creative ideas for franchise sales. Of course, they’ll offer you enormous discounts especially on franchise fee when you sign up the deal right away. You must be thinking now to start the business after getting a good amount in savings. You might have overlooked that you are in the end of the twig. Why? Because, you lost the opportunity to review the business carefully. You might have signed an agreement without checking all of the provisions. For starters, this could be a bad investment. An upfront discount doesn’t mean of a good deal. You might have failed to observe that the products have little expiry periods, or could be the rental fee is unreasonable. The result would be? Owning a business that has high costs with lean margins. Moreover, signing right away may get you unconsciously agreed to the provisions that you are completely opposed to. And this may result future conflicts. It is therefore concluded that rushing a franchise is never be a good idea. Being cautious while in searching the best franchise is a good way to get your dream business. Consult a lawyer should there be a need to. You’ll end up happy and guarantee success knowing you made the right choice.

There are more to discuss about, but the points above are the mere reality which issues are relevant in franchise searching before anyone decides to do franchising. One should be encourage to shop around with what good franchise investments are. Always do the review, not just twice, especially in franchise agreements. Get consultants if possible. The saying goes “slowly but surely” is always reliable.   

Monday, April 6, 2015

10 Practical Truths about Franchising

1. Franchising has a high success rate compared to building a new one. Its idea has been proven and successfully implemented; thus, low risk compared to a new business that has to start from the scratch. For a wise franchisee, what he purchases from the franchiser is the years of expertise and its proven method of the system. The learning acquired from the franchiser maybe tenfold worthy than what has been paid off. Unlike in starting a new business that requires more time and money for trial and error, a worthy franchise eliminates start-up problems. On top of that, the franchise business is open to anyone who’s willing to invest with or without business experience.

2. Brand and trademark has been successfully recognized for many years. This include that products or services are recognized by many households thus guarantees success. In addition, the cooperation between businesses in franchising supports everyone in becoming successful. The idea is like the total of the entirety is greater than its separate parts. Those in franchising come to be a part of its family whose members are working together for the benefit of the whole. One idea from one franchisee will be shared to the corporate office together with other franchisees.

3. You’re not alone in managing the business. Franchiser ensures that the perfect operation and as well as management efficiency are passed on to the franchisee. There are further training and education system to make sure that the utmost service will be provided to the end user. The training is the preparation for the franchisee to face the challenges in the business. This kind of support will help the franchisee overcome the incapability of running a business or perhaps the business sense acquired could be polished. Any assistance in the future will be taken care of by the franchiser all throughout the business term. Aside from that, there’s no need for a franchisee to take further research and development since a franchiser will be in a position to provide such. The franchisee will be later informed of the new products or services.  

4. It is easy to finance with positive outcome in reselling the franchise. The financing institution normally helps businesses that have reputation established. Because of its high success rate, it comes easy to get loans from banks or any financial institutions. Thus, the asset in franchise appreciates and easy to resell any time.

5. You can expect huge profits. The management method is passed on to the franchisee thus the success rate is expected. Although this depends on the right marketing strategy, but the correct implementation of brand positioning with growing customer base can increase sales and profits.

6. It has easy and manageable advertising systems. The franchise system provides help and direction for advertising; unlike in a small business that mostly can’t afford bulk for inventory products or extensive advertising. The brand exists for long years and this can be very easy for a franchisee to reduce in advertising cost hence the public has been aware.

7. The franchiser has full control in the management. Its system has been proven effective thus to be strictly followed: trademark, business expertise, knowledge and training. At times, the franchiser imposes a certain point of control that is difficult to follow resulting to conflict between the franchiser and franchisee. Furthermore, an individual who has difficulty following orders or commands or that the working system is displeasing may find franchising awfully frustrating. But, there might be other thing that a franchisee can be at times creative such as marketing.

8. There are on-going fees that need to be taken care of regularly: franchisee fee, royalty, additional fees such as services and advertising costs. Aside from this, there are expectations that a franchisee should need to get through with – expecting an instant success. Again, practical for success, it will not come without effort and hard work. Like other businesses, franchising requires initiative, tremendous time, and a solid industry.

9. There are failed expectations due to incompetence. The franchiser that fails to give enough support or squeezing the franchisee too aggressively for more profits can destroy the relationship between the franchiser and franchisee. On the other hand, a lax franchisee who’s failed to adhere to franchise agreements can later create damage to the business.

10. There are still risks to face in franchising, though lesser than an independent business. You have to think that you own the business, and to the great extent, you determine the attainment of your endeavor. Though the franchiser has a great program offered with a brand name, but in reality, much of the risks are yours. Moreover, you can’t get out right away after buying a franchise. This is much likely going into a marriage. The binding relationship between the franchisee and franchiser is legal that can possibly last for a long period. The utmost important is the relationship between the franchisee and franchiser with its staff. Is it therefore concluded that before taking into franchise, getting to know the franchise system is the first thing that a franchisee should know about.  

Saturday, March 28, 2015

10 Best Tricks to Get Money in Starting a Business

Financing business startups is the toughest part for an entrepreneur. At the very least, it requires a little or enough amount of money to start. You might not ready to have funds right away when you plan to launch. However, a lack of fund doesn’t mean you put on hold your entrepreneurial dream. Right in this article, you’ll find different ways to fund a business startup.

Before we get started, allow me to give you a little advice to use personal savings for business startups. Never go directly to a bank to make loans without any proof of your capacity to repay. This is unacceptable but, banks usually do not lend to business that doesn’t have operating histories. The timely loans repayment is the bank’s main concern. After all, business is still business. In addition, you might get a loan from a bank with collateral. You only get higher amount when you have secured assets to use as collateral: car, home, gadgets, and other property. Even choosing different financial sources, the amount can be approved for loan depends on the size of the business and collateral. Sounds difficult? Don’t fret! Here are other ways of generating business capital if you can’t think of any.

1. Start with selling your product or get others know your product or service. In this stage, forget first the office or shop since a zero capital doesn’t allow you to put up.  Launch a website informing the community or your networks about the product or service you offer, start a marketing strategy online, and start building relationships.

2. Borrow from family or friends. In all walks of your life, I guess you have at least few friends you can call and ask a help with, right? Introduce your business plan to your family and friends. Who knows, they might be interested to join your business. This is another way of funding the business if they have some spare cash to contribute. In addition, borrowing from family or friends has a little or no interest to repay the amount, and you can avoid hassles from bank contracts too.

3. Do sideline business. If you have valuable knowledge and skills to other things, you can make those an asset. Let’s say you have a skill in hosting an event or similar to that, make use of your special skills to save up money.

4. Have your business plan always ready for ventures. This should come first, above all. You can’t come up the figure you needed unless your business plan is done. In the financial plan, it should appear your ways of getting money for the startup, includes your method of repayments (if acquired from lending). The most exciting part is showing the detailed method if how the business can profit and how much it will earn in the next few months. A good business plan attracts investors. Therefore, rather than lending from a bank, ventures with investors is the best option.

5. Home loan. If you have a remaining balance for your home, you may apply for a home equity loan. You can use the money to start your business. However, this method can put your home as collateral, and you risk foreclosure if failed to pay.

6. Putting risks to sell assets. Do you have luxury gadgets or things you can sell? Open your closets and you might realize that you can get more money from them. If you have a car, you can risk selling it, choosing to commute is not a bad idea after all.

7. Using business credit cards. This is the easiest and quickest way to start your business as it’s always available. You can rely to your credit card for your business cost. On top of that, the minimum payment is quite low. If you are frugal with your other expenses, then you can use your credit card for your business and pay the minimum amount. In addition, you can move credit card balances to another credit card that you can use for your startup capital. However, any trouble in making payments increases the interest rates and costs on cards.

8. Home or apartment renting. If there’s a space in your house or apartment, use the opportunity to rent it out. The money raised from renting out can be used to fund business startups.

9. Fundraising or crowdfunding. This can be done over the internet. The crowdfunding platform allows raising money from the large number of people or organization in exchange of product, investment, service, project, and cause. This gives you lot of advantages as you can raise money without sacrificing your business equity. This is also a better option compared to forcing companies to pool for a dime investment.

10. Investments. If you can’t get money today, you can plan ahead for future time. Let’s say you want to study more of the business you’ll put up, if you need more time, then set a future time. For example, 5 years from now, you’ll open your own restaurant or you’ll engage to franchise a restaurant. Plan the amount needed for the business, and while you’re waiting for the right time, invests in other companies. Use the dividends and proceeds for starting a business.  

Monday, March 23, 2015

Starting a Business with a Hobby

A hobby is your exterior interest that you’re shadowing on your spare time. It gives you an outlet to do something that can be relaxing. But, you must be missing something from your hobby, totally unaware that you could profit on it. Even if it’s just a pastime for your pleasure, your knowledge and skill can make a difference.  Hobbies are one of a kind that you can make profit of. Let’s say you have a hobby in preparing delicious meals for someone, you can start experimenting your own ingredient and make your own menu. By letting others know that you cook and prepare menus on occasional basis that might be a start for others to ask orders from you. Now, how about a hobby in writing? Do you know that you can introduce your writing skill to students or professionals in your local area? Writing a research paper, a thesis, or even a company’s manual can be a great hobby.

You might be thinking now to start your own business with your hobby, the question is, how will you know you can possibly start a business out of your hobby? Let us slowly assess your hobby and see if you can turn it into business.

Questions to ask before a hobby become a business:

-        Do you have a reputation? Do people trust you? Do people in your local area or your network take notice of your product or service?
-        Do you often get more orders?
-        Are you making profit already from your hobby?
-        Do you think you will succeed through your hobby?

If your answers on all questions are positive, then better think of a bigger picture outside the box. You can make a good business from your hobby. The next step you need to do is to make a business plan. This will tailor everything and can be done according to your plan. Should you go beyond individual sales then, consider hiring a staff and renting an office or a shop.  It would be better if you’re doing a fresh start, to start from the scratch. You can gradually think the things needed for future ventures.

There are others who started business as a hobby in their free time, without realizing that they already made much. This may complicate in tax issues when the internal revenue realizes that you’ve made much for many years without any business claims. It is very important to file a tax when you are certain of more earnings.  It may still seem a hobby for you but, when you earn more than the minimum from your hobby; better claim your hobby as business.

There are consequences when you failed to classify your hobby as business. If the internal revenue classifies your hobby as business, they normally won’t allow you to seize any losses. If you can’t prove of any losses, they will get you pay the unpaid taxes plus penalties. You might not want this become complicated; therefore, better think right now and ask yourself if your hobby classifies as business.

Advantages and Disadvantages of Having Own Business

It’s time consuming to think a career path or changes to fit in. But, it’s worth the wait when you find your vision and mission in life. Sometimes, when you thought you’ve found the best job you dreamed for, another vision forms in mind. That vision is far different or similar than what you’re doing. At times, you find yourself thinking over and over again before deciding to become self-employed. You might envision yourself in serving people as an independent contractor or perhaps putting up a business. While it’s very exciting to start your own business, there are outcomes that whether you like it or not, you have to understand and accept what’s involved in. Now, let us distinguish the advantages and disadvantages of being employed and self-employed (having a business). 

Being employed has more advantages in the financial side. However, if the business stays stable and accessed unlimited growth, the potential income is unlimited as well. The employed person pays only the part of monthly remittances: health insurance, taxes, social security, and others. The self-employed person will take the burden of paying the part of remittances for the employee together with business income tax and personal tax. An employed person obtained better benefits from the company: health, life or disability insurances, and retirement benefits. But, a self-employed person will need to do more to gain more. Being employed doesn’t have costs beyond the basic needs. Unlike self-employed often takes business costs and staffing expenses. An employee doesn’t have a start up cost unlike a self-employed (business person). 

In terms of working hours and income potential, the self-employed person has more advantages. If a self-employed person doesn’t require hours to work, an employed person has working hours required. Income for an employee is limited, although receives bonuses but self-employed doesn’t have limits to gain. 

For emotional and personal growth, both employed and self-employed person have negative and positive sides. An employed person often deals with politics with the employer; while the self-employed person has to deal with seclusion and loneliness. Often, an employed person collaborates with others in the workplace while the self-employed person acts on his/her own. A self-employed person needs to be self-motivating while an employed person has to be structurally motivated because the team or the boss expects higher results. 

The big part between the employed and self-employed is motivation. If an employee failed the target or metrics, the company will give a chance for the employee to correct the mistakes, the employed still has a salary. But, a self-employed person may suffer on both faces. Aside from taking responsibility on failures, it raises the financial consequences. No sale, no gain. Failure on bidding, no cash flow equals great loss. 

For potential opportunity, employees may often share successes with the team, while in financial success; it is first taken by the employer. The self-employed may instantly enjoy the fruit of business successes.

Therefore, before deciding to engage into business, consider first your own desire. Would you like only to be a part of the team and free from operational business decisions? Then, go for employment. Or would you rather be a tycoon, your own person, and has own brand? Then, consider for self-employment. Again, back to basic, you need to determine or review your personal goals.

Sunday, March 15, 2015

The importance of customer service in the business

Centuries ago, businesses don’t train employees for servicing customers. Mostly, they thought that customers come and go; customers buy something when needed and leave the business anyway. So, businesses before didn't take time to get customer’s attention. Being nice to customers or not doesn't concern with the business, not until this generation.

Due to gigantic competitors, a business must compete from giving best service to customers. This is one of the factors that a business can survive today. This is to take time to differentiate from the competitors. This is not just about greeting and serving customers. It is more on going beyond for the customer: doing everything possible to exceed customer’s expectation, making decisions that customers can benefit more, sometimes even at the expense of the business (to consider potential customers in the future).

Customer service is not about giving the business to customers. One must need to know when the business slogan “customer is always right” applies. I’m sure you know when it’s not right, when the customer is taking advantage or becoming abusive. They may not always right but they are still customers. Therefore, even if they become abusive or they use foul language to you, you do not need to do the same.

Customer service doesn't involve to only one aspect. This involves the entire aspect of the business operation:

-        - Telephone service
-        -  Counter service
-        -  Product/service information
-        - Taking orders
-        - Documentation follow up
-        - Managing payments, complaints, service culture
-       -  Making repairs
-        - Visiting customers

Customer service is a common sense, the key is to HELP. It doesn't need to be an obvious marketing tactics. It is about giving immediate actions to frustrated customers, not letting customers become frustrated, and attending to customer’s feedback right away. It should be the kind of service to tell to customers about the company and its employees. Soon the customer in return may acquire new customers via word of mouth referrals.

The key to quality customer service is not in offering tons of service but in building relationships. This encourages customers to come back over again to the business when they feel they trust the company and its employees, when they feel they’re more than the customer, when they receive a treatment that they expect to be treated.

Reliability is a foundation for a customer to trust the company. When customers believe on the company’s promises and such promises are delivered properly, customers will surely continue with the business. If the company can’t make definitive plans, or if the company believes that what the customer’s asking is impossible, then the company shouldn't promise. It is better to explain to the customer what the company can do and not, rather than destroying customer’s confidence after expectations.

Sometimes, it’s tiring and humiliating to hear about the things when the business failed to meet customer’s expectation. But, listening to the customer is the key to improve the service. Responding to a customer complaint can make a difference. Customers may feel the importance in the business. Even if it’s not beneficial financially to customers, the fact that the company is trying to help, it can relieve customers.

Friday, March 6, 2015

Managerial skills that a manager will become effective

It’s never been easy for a corporate office to get connected with their employees.  Because of this, managers are placed on their positions in order to serve as mediators between the employees and the upper office.  On top of that, they will also serve as the monitoring committee for the corporate office. Managers are responsible to know how the employees work. But this doesn't mean that a manager would guard the employee all day to see if they are working or not. Manager’s utmost responsibility is to take care of the immediate issues in the company.  Therefore, it is important for a manager to have a number of managerial skills to handle the workforce and the operation.

What are these managerial skills that a manager should possess? 

First, a manager should be observant. This doesn't mean that a manager should only sit in the office while observing.  Once in a while, a manager should take a visit to each department to interact with their subordinates: asking their working condition, listening to working concerns and, encourage them in working their best.  This is also a skill that a manager can motivate employees.

Next, a manager needs to monitor the staff performance.  By taking concerns of the staff condition, a manager knows whether the staff is doing well or not. A manager should see that the office rules and regulations, company policies are always implemented. A manager should conduct a regular meeting on all departments. This may help employees contribute the needs of the entire company. The involvement in the meeting influences employees to do more, to attend to their respective responsibilities, and improve their performance. A manager should discuss to employees how they are going to be evaluated and assessed their performance.  When there is incompetence among the staff, a manager should provide suggestion or solution to improve the performance.

Third, a manager should implement professional developments. Creating several programs that allows involvement of employees may help the staff improve at work.  For example, letting the staff attend to several seminars or other out-of-town team building activities help employees improve their personalities and their team’s relationship.

Finally, a manager should also have to make the right decisions for any important tasks in the company.  Proper research and evaluations should be made before making decisions to avoid sacrificing more the company. A manager should always be keen in learning and improvements. He/she must listen to the ideas of employees; must be open minded to all things, and be flexible at any given time especially when the need arises.

These are just some of the managerial skills that a manager should have.  As you can see, a manager’s job is complicated. They should not be someone in the office sitting around the corner and browsing facebook.

Business and personal risks on any social networks

Since technology has evolved, the number of fraudulent activity over the internet has grown too. The people involve collects information to targets. Once successful, the account will be used to target others account too. For example, hackers use their target’s facebook account to target others. The site has the largest community and has personalized feature that users can fill in their real information, updating activities that put hackers to use the target’s activity.

Let us put the old news as an example; timesonline warned facebook users to be vigilant of putting personal information in detail especially contact information. This called the attention of social network users to minimize the updates of personal activities. Such personal information and activities will be used for stealing bank accounts or worst scenario, murder.

Any social network accounts can be a target by not just hackers but to some who has a grudge on you as well. Anyone can buy software to crack any passwords. This will be very easy to someone who has a strong will to do. Like someone who was reported from previous years that a guy bought software to hack a facebook and email passwords to spy a partner. Although that guy admitted that software was a big help to him, it isn’t always a guarantee to use for good reasons. One maybe tempted to commit crime by stealing financial accounts, or selling others personal information to informant. It is therefore concluded that it has never been safe to put sensitive or personal information on any sites that one can access to. 

How to be safe?

  • Never click any links on your timeline or inbox message when you’re not familiar of the sender.
  • Always ask first the sender if what the link is about.
  • Install your computer a protection that can block potential dangers (phishing sites, malware, stealing stored cookies on the browser, etc).
  • Beware of downloading free software that asked you to use any of your social network account to login.
  • Do not use the same passwords on all social networks you joined in.
  • Make the safest and longer password by combining the letters, numbers, special characters, lower and upper keys. (This way, even hackers are using software to crack your passwords, it will be very difficult.)
  • Never give hackers or a criminal a clue of your future activities.
  • If found any suspicious activity on the internet, please report to the internet police right away on this site listed contacts for reporting illegal activity.

Wednesday, March 4, 2015

Good customer support and quick action leads to business success

How many businesses succeeded because of loyal employees and customers are there to support the business? The support received from the customers patronizing the products and services because the management is good enough to know what people need. The support received from the employees working together to achieve each others goal.

I remember purchasing a product online and I was stumbled of their tagline “100% customer support and immediate response”. I browsed over their offers and it was okay but I had to email first their support to ask more details before to purchase. My excitement turned disappointing because after hitting the send button, it appeared “thank you for contacting support, you’ll get back the response within 24 hours. I wonder where the quick response was. It was urgent for me and I was expecting of an hour or 2 for a response. There was no immediate response, as I say. It came in 20 hours. I was no longer interested so I turned down the offer and instead, went to a different site.

So that’s it. What I am trying to tell you is that, never disappoint customers. It should have been better to say “please wait for (a certain hour) or until the representative is available, they will contact you shortly” rather than a plain ‘immediate response’. Why not ‘as quick as an hour’ or ‘in few minutes”?  With that, people will not expect of as quick as a minute or a second. How about, if it was a problem regarding the product, had I needed to wait 24 hours or so before the problem could resolve?

Here’s another one, telling this captivating words “If you experienced difficulty regarding the products you’ve purchased, please contact our email support immediately. Our staff would be glad to get back to you as soon as they can or you may connect to our live chat support online 24/7”. I went to their live chat support and disappointed again as it appeared “sorry, there’s no chat agent online now, you may leave a message and they will get back to you after 5 hours”. I opted to email support and the same thing happened. Now, what can you expect with that support? Would you consider that quick if you have to wait for them for how many hours? They should have not said 24/7 if the customer would need to wait 5 hours after the contact. Imagine if the service is always like that, and you have to wait for longer hours before the problem is solved. Would you still consider of their other offers? Would you still choose their company or service?

Poor customer support would lose potential and existing customers. Never tend to expect customers if you can’t do it. An honest tagline or response would be highly appreciated rather than a tagline pretends perfect. Express honestly what you can do and not; never afraid to people if they know your company’s limitation. After all, humans aren't perfect. If the support can answer at GMT (time) or whatever then it should be clearly stated rather than letting customers expect. This article isn't targeting a certain company but rather to let people and businesses know how customer’s expectations are important. It would create a negative impact to the company if customer’s expectations weren't met in the first place.

It’s not millions of tricks that a business could survive neither a promise for people to stay. Let people praise your business rather than saying “our company is number 1 and great among businesses and runs for how many years”. All businesses would say that, and if we are going to judge on how they talk, well, we’ll be blind of their lapses. People would praise your company if they received more than they expect, and in return, people will bring another prospective customer (through refers).

Business shouldn’t care only for business. Think money more and people would leave you. Think people more and money will come to you.

Business Plan- Why needed for Business Startups

Do you plan to invest or put up a small business? Then think of a good business plan to start with. You can’t start a business without a business plan.

Whether you are looking for an investment or you’ll put into action to make the investment successful, a business plan is a good choice to start with. You as an investor, if there’s a businessman approach you to invest in his business, would you take the offer right away? Would you rather not review the business plan and proposal, first?     

Some may think that making a business plan is tiring and time consuming. Yes perhaps, but the only way to save you from losing money and more failures is to make your business plan feasible before you plan to start it up.

You may want to invest in a good business that will multiply your investment. I’m sure you’ll be interested to know how it will multiply and for how long you’ll get it. Reviewing the financial status (activity) and the future plans of the business is one of the ways you can have an idea how the business will profit you. Or soon you’ll find out when the business is impossible to pursue.

Don’t bother the time that can do to you for researching and business planning, just take time to care for your future investments. Doing research and reviewing a business plan is not a pain in the butt. Though it may get you more headaches but it will save your future. It will save you from losing more (mentally, physically, and financially).

What can it do to business?

A business plan will tailor everything to make your business operation successful. Its value lies in the course of researching, to make the business into more manageable and systematic. The plan helps you think the thorough process; thus helps you avoid terrible mistakes later. The question is, why you should have to write it on the paper? Why not put into action right away on what you’ve been planning, without getting yourself troubled in writing a business plan? The answer is, it’s a protocol in business. If you are going to look for a business partner, a business plan is the first thing you consider to let your business partner look at it. The more thorough and effective your plan is, the more confident you are to attract business partners and investors. In the same way, if you are going to loan in a bank, you have to prove yourself to the bank manager that you have the capacity not just to repay the loan but to prove as well that your business makes more returns.

Making a business plan doesn't need to be a corporate-like. The practical method will make your business plan tidy and concise enough to detail on how you’re going to make your business successful and profitable.

Questions to consider in a business plan:

-        What type of business you are into?
-        Why is your business feasible?
-        What are the products or services to provide?
-        How your business will be protected?
-        Who are your target markets?
-        Do your markets exist?
-        Are you capable of running your business?
-        Do you have skills to develop your ideas?
-        Do you know your competitors?
-        How your business can make a difference from your competitors?
-        How you can bring your business to the market?
-        Are you capable to finance the business?
-        How long can your business survive?
-        How your business can generate income?

-        How much do you expect your business can earn in a month/year?

You might want to start impressing your future business partners and investors by taking time to write a business plan in a standard format.  Or you might be interested in other business plan template would suit your business needs.