January 30th, 2008 | Finance Planning |
The business environment is being inundated with change so fast that the normal hat spinning of being a small or medium business now has ones head spinning with the rotation of uncertainties. The critical point is cash flow. How to generate and maintain good cash flow while new legislation, regulation and lack of capitalization floods the environment. This year has been one where the articles addressed several of these business components that affect cash flow and strategic planning. Being informed and finding solutions allows every business executive a set of new decision points for growing their business and building a stronger financial base of operations. Future articles will bring real life lessons learned in business regarding how changing policy and legislative decisions affect business cash flow as well as introducing technology solutions that are not full of vendor cow plops but discuss real ROI perspective.
This past year has had a lot of hubbub about corporate governance and risk management. The focus has been on the large public companies and financial markets. Yet, the legislation that has been passed is trickling down to the small and medium privately held businesses. One area that the Feds would like to do would be to push the requirements of Sarbanes – Oxley (SOX) down to all business. But, thankfully, the Supreme Court is going to hear a suit brought that challenges the Constitutionality of the legislation. Did you know that even with the small business 404 exemptions that SOX has cost publicly traded small business with market capitalization of $75 million or less paid a median of $1.14 in audit fees for every $100 in revenues. This is data from a study released by the GAO in April 2006. Next year, the articles will keep flowing the information on policy that affects corporate governance, risk management and other strategic decision making here and at my blog.
The fact that many companies need to reduce cost to ensure cash reserves look to how they will innovate when it comes to technology. This decision should always come to what is the Return On Investment (ROI) and how that will improve cash flow. In today’s cost constrained environment, there are opportunities to utilize technologies as mentioned last year. During this past year, there have been a number of new technologies and consolidations. Making choices for the most robust and cost effective solutions is a challenge in a competitive market. Next years articles will continue to review technologies and evaluate the business model implementation for maximizing efficiencies and cash management.
During 2010, new articles will continue to sift through policy issues on a national basis that will affect small and medium businesses. What you and I know and the politicians forget, even though the statistics are from the SBA, is that over the last decade, small businesses have generated 60 to 80 percent of net new jobs. Yet, small businesses released some 3.1 million employees to the street because of lack of capital and bad policy by Congress. Remember, there are about 10 million unincorporated self-employed small businesses and about 6 million incorporated self-employed in this nation. We make up 97 percent of exporters and produced 28 percent of the known exports. Small businesses employ 41 percent of high-tech workers and produce 13 to 14 times more patents per employee than large patenting businesses.
The 2009 Presidential report states that “During these two past recessions, firms with fewer than 20 employees were the only ones with positive net job growth; the larger category of small businesses with fewer than 500 employees, as well as large firms with 500 or more employees both experienced net employment losses.” Therefore, all of us Small Business Executives (owners) need to shout with a common voice to Congress and the Administration regarding bad policy that impacts us as they only address the large corporation which are a small percentage of the real economy drivers.
With this reality, the challenge to every business that falls into the SMB (Small Medium Businesses) category is to get involved politically at your state and national level. SMB’s drive the economy and MUST engage policy makers to do what is Constitutionally correct for enterprise and not focus on Wall Street and the major corporations. SMB’s know that the bail out has not reached the environment. We don’t really want a bail out that causes us to be beholden to a government, we WANT good policy that does not impede us from hiring new people, growing our customer base and increasing our cash flow. Heck, we don’t mind paying taxes if they are just and used wisely. This is an election year so get out of your chairs and get engaged.
The intent of future articles is to ensure that 2010 brings solid technology discussions especially in the area of Telepresence and Cloud Computing. Let’s cut through the hype and the vendor cow pies and get to what will truly allow us to maintain and increase cash flow.
Talking about Cash Flow, next year’s articles will take some time to discuss the major area that every business has issues with – understanding financials.
Have a great Christmas and looking forward to a super New Year.
January 29th, 2008 | Banking |
On a day when you hear about the worlds largest bank CITI Group losing $5 Billion and cutting 4,000 jobs world wide, you might expect markets to be down severely. You might also have expected the FTSE to stumble on the news that RBS is preparing a rights issue to shore up its balance sheet. However, apart from some early nervousness on Friday, the UKs benchmark index managed to close the week up 3.2%. The CAC & DAX both managed 4.3%.
The worse is behind us argument continued to gather pace as evidenced by RBS share price actually rising on the day of the rights issue announcement. Investors had been speculating for months that RBS would be taking this step and in some ways the eventual announcement relieved some of the pressure on the UK banking sector. More than anything markets hate indecision and traders seem buoyed by the hope of an eventual end point to the liquidity crisis.
A significant catalyst last week was some positive earnings announcements from some heavy hitting US companies; Intel, Coca Cola, Honeywell, Caterpillar, Google and IBM all surprised to the upside. According to Bloomberg, profits have slumped 26% on average from the companies releasing results so far with the financial sector being the worst hit. However, this was largely expected to be the case, and share prices have adjusted to price in consensus estimates. One important question is whether US companies have truly under promised and over delivered, or if investors are just fearful of missing out on a rally.
On the currency markets, the Pound and Dollar made up lost ground lost after figures showed Eurozone inflation hitting a 16-year high. Chinese CPI was also red hot with staples such as soyabeans and rice continuing to rise. The price of rice has doubled since August 2007 while sugar and wheat have retreated from recent highs. The king of commodities, oil, continues to make record highs and until this market significantly retreats, inflation projections will remain high. This will put further pressure on central banks such as The Bank Of England, which has to balance fighting inflation with easing the liquidity crisis in the credit markets.
Inter bank lending rates have remained stubbornly high since the summer, with the actual cost of lending being a quarter point higher than the official LIBOR rate. The fact that The Bank Of Englands recent loan action was over subscribed by three times the amount tells its own story. With little movement on LIBOR or mortgage fees so far, the next move could put further pressure on the Bank of England to cut rates.
Traders foresees that while the worst may or may not be behind us, what is probable is that it won’t be plain sailing from here in either direction. There may still be some pull backs along the way even if March turns out to be the low point of this credit crunch for the FTSE. A one touch with the trigger set to 5900 could return 50% over the next 17 days.
January 28th, 2008 | Insurance |
Your family depends on you to find the best insurance quotes that will not only save money but it will provide the utmost in insurance coverage if you ever need it. It’s not easy to plan for all the expenses that can pop up during the month and throw your budget off track but insurance is one thing we all need in order to protect ourselves. So it’s great to estimate your monthly coverage for this expense.
When preparing to call insurance companies or if you plan to search online you will need to make sure that you have the right information with you before you call. If you are insuring your auto you will need the vehicle identification number, year, make and model of all the autos that will be covered on your policy. Remember that most insurance companies will also do a background or credit check to verify all your information. Also write down and make a list of any questions you may have or if you want to know any specific information. This will help keep your conversation brief and to the point. You also need to know how many drivers will be added to your policy, if any. Have the name, contact information and social security number of each driver that will be insured.
When calling around for the best insurance quotes, whether it is for auto insurance, home insurance, or life insurance you want to make sure that you get the right amount of coverage for the best price. If you are insuring your auto or home and you have it financed, the financial institution will probably require that you keep a certain amount of coverage on the auto or home until you have paid the debt off. This is to protect their investment incase there is an accident.
Searching online for the best insurance quotes has its advantages. You can find the best insurance companies online in the privacy of your own home and at anytime. This is great when you have a family and are unable to devote a certain amount of time talking on the phone. Your time is valuable too and because of that most insurance companies have made obtaining a quote much easier than ever before. You can do a search to find the list of the best top ten insurance companies to choose from and then begin your search. Most insurance companies online will offer you insurance quotes for free. The way it works is simple; enter your information, answer a few questions and then receive a quote usually within minutes.
Don’t accept the first quote that sounds good to you. Instead, go through your list entirely before making your decision. Once you have all the insurance quotes from all the insurance companies you can make your decision. Most insurance companies offer immediate coverage and you can print your proof of insurance once you have paid for your premium.
Insurance is expensive and it is something that you need everyday of your life. This type of investment is one that needs careful consideration and ample time to find out which one is right for you.