How to Plan for Unexpected Expenses When Running a Business
It sounds ironic to plan for the unexpected. But, in business, it could mean the difference between surviving or failing in the event of an unplanned situation.
As a business, you are bound to face unexpected expenses from time to time and it’s necessary to prepare for them. It could be anything from equipment repairs to sudden opportunities that require additional capital you may not have planned.
Whatever the case is, the first step to prepare for the situation is to be in a solid financial state. In this article, we’ll discuss further how you can build an emergency fund.
Protect Your Business From Unexpected Expenses With These Tips
- Build up an emergency fund.
An emergency fund is usually a few months of expenses in the bank for your business. It’s like a rainy day fund which you set aside for when emergency expenses occur. These include:
- Equipment breakdowns
- Utility problems; and
- Unprecedented business growth
Having an emergency fund provides a sense of security that you have enough funds to tide you over in lean times. It also means having enough money when the need arises without resorting to other options such as borrowing money with high-interest rates or tapping your personal funds.
- Track your expenses
Make it a habit to account for everything you spend.
Start by listing your fixed expenses: lease, taxes, insurance, and payroll. Then look at your financial history in the past year, along with your bank and credit card statements to identify the irregular expenses you have paid.
Tally up the amount and whatever is above your regular expenses, factor it in when calculating your emergency fund.
- Cut back expenses where possible
Aside from saving money, also prioritise cutting down your expenses. Review your finances—cancel subscriptions you haven’t used in a while (e.g. SaaS tools you no longer need) and shop around for better rates.
It is also where prioritising preventive maintenance and repairs matters. When detected early, you can address issues quickly, for the less amount you would pay for emergency repairs. It shows that while paying for maintenance may seem counterintuitive, it sure can keep your equipment and utilities in good shape, saving you a lot of money and headaches in the long run.
- Plan Ahead
Concerning the above point, it makes sense to plan for the events that are bound to happen in your business. You cannot accurately consider an equipment breakdown as an emergency expense when maintaining it to prevent such serious issues is one of the responsibilities of running a business.
Protecting your business from unexpected expenses mostly boils down to planning for things that could go wrong. Anticipate them and build up a decent emergency fund—you should be fine.
- Build Your Credit Score
Even with an emergency fund, there will come a time when you will have to borrow money to get started.
Having a high credit score can do several things, the most important of which is proving to the bank that your company has good financial records and is trustworthy. The interest rate on your loans could also be lower. Some of the ways to improve your credit score are as follows:
- Pay your bills on time
- Pay off your debt and keep your credit card balances low
- Do not close unused credit cards
- Apply for a new credit account only as needed
Takeaway
Running a business can catch you off-guard when things don’t go as planned. But, don’t let unforeseen expenses get in the way of your success.
Find a financial modelling company that offers consulting services and financial forecasts and projections to help you create a budget that accounts for unexpected expenses. They can also assist you in implementing strategies to reduce your expenses and further fuel your growth.
Get professional advice on unexpected business costs today.
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The Frenzy Behind Online Stock Trading
The Frenzy Behind Online Stock Trading
Markets dealing in shares and stocks are considered as liquid, supporting and driving the viscosity and density probability factors at a given period of time. Therefore, an investor runs the risk of incurring loss in trading if he/she is not updated with the ongoing market dynamics.
Online trading is an exciting new way of trading in the stock markets in India, and the rest of the market in the world for that matter. Online trading exposes the user to numerous options that leads to efficient and effective result of the investor’s trade. This is the way to ensure better market access, high-speed transactions, etc.
There are number of strategies that are meant for online stock trading in India. The main benefit of online trading is easy money. Another attractive points of online trading is that trader can trade in each and every type of security such as IPOs, bonds and mutual funds.
Thanks to online platform, an investor can keep himself/herself informed by way of collecting the required information on all the topics associated with stock analysis and research. Other than that, an investor or trader is also able to get help by seeking expert views that are again based on stock market and the desired shares. Other than that, traders receive real time information for carrying out trades, something which is unavailable while conducting live trade. This information includes market watch on particular stocks, stock graphs and charts, etc. Orders can also be placed via phones even if you are offline.
Indian stock market is considered as one of the biggest stock trading markets in the continent of Asia. With the help of a consistently high GDP as well as a dynamic and buoyant economy, India is continually outgrowing other economies in this region. And with the advent of online stock trading, the trading in Indian market has become all the more convenient.
In India, for carrying out online stock trading or any online investment, you need to open an online trading and demat account. For all those who are not informed about demat account, it refers to dematerialization account. It is meant for holding the securities electronically instead of holding it physically. The functioning of a Demat account resembles that of a bank account. All the buying and selling of shares are also adjusted in this account.
However, in case you wish to carry out online trading of stocks and that too in a cost-effective manner, you are expected to have clean credit track record, a pre-requisite of opening an online trading and demat account. Other than that, it is advisable to rope in a financial adviser while figuring out a trading or investment pattern, something which is important for efficient channelization of your money.…
Characteristics of a Victorious Real Estate Investor
Characteristics of a Victorious Real Estate Investor
To become a successful real estate investor one must have the capability to identify good real estate deals and invest in them. You should also be able to assess the true value of properties based on when you expect to sell. Your purchase must be made at a reasonably low price to allow for a profitable sale at a later date.
Real estate investing is a strange type of profession that has no accepted curriculum of formal training. The only way to learn the art of successful art of investing in real estate answer is for you to find a mentor who can teach you the secret formula. You must become an adept at appraising and finding out the true value of a property as this information is critical to make an informed investment decisions. Realtors, appraisers, and banks determine what a property is worth by studying recent comparable sales in the same neighborhood. You must be able to do the same.
Leveraging is key factor for investors in real estate because the less cash you part with on each transaction, the more properties you can buy with your total available money. If you are long-term investor, leveraging will work in your favor if the markets in which you invest appreciate in the long run and your income from the properties can pay for most of your monthly debt.
Exit strategies are also equally crucial to successful investing. As a real estate investor you must know exactly when to sell the property even as you buy. You must completely study the market and your work out your plan even before you invest. Real estate investors can help you interpret market indicators such as the average length of time houses have been on the market. This information it will help you make better investment decisions.
Successful investors make it a point to review their portfolios at least once a quarter and work aggressively to get rid of the losing properties before they can seriously erode the profits from their winners. Bestow enough attention to protect your properties from creditors, plaintiffs, and the taxman. It is no doubt complicated, and time consuming – but yet every successful investor takes the time to do it, thus assuring that their hard-earned money is not imperiled.
To succeed in real estate investing, you must cultivate the art of moving with people as the business is built around people – sellers, tenants, contractors, agents, financiers etc. Since there is no written code of ethics for investors, it is up to each investor to decide how he will deal with customers, tenants, sellers, workers etc.
Do your market research thoroughly and look at houses that are priced lower than comparable properties in the neighborhood. Purchase the property with the lowest possible cash down-payment and get the seller to carry back a second mortgage or deed of trust for the property. If you can get a low enough price and generous terms you can make almost any property into a successful investment.
Finally, one last important rule for investing in real estate is – do not become sentimental about a property that you are purchasing for investment. Always look at the property from the viewpoint of a critical purchaser and a businesslike investor.…
How Stock Market Trading Happens
How Stock Market Trading Happens
The stock market has puzzled many people over the years with its behavior. Not many so called analysts have been able to make predictions that are always right and that is because price movement of stocks are dependent on a variety of factors like political developments, economic news, company performance of the stock, influence of foreign institutional buying and so on. In short, it is just another market that behaves as per the demand and supply existing at a particular point in time. It can be compared to a big super mall where people are either buying or selling stocks. For every buyer, there is a seller and vice versa.
This transaction of buying and selling of stocks is facilitated by a stock exchange. The New York Stock Exchange is one such example. As compared to earlier times, when you had to be physically present at the exchange to trade stocks, modern trading is done through online trading portals that are owned by brokers and many people have been able to do so from the comfort of their homes.
Let us look at one example of how a stock trade happens.
You first need to open a trading account with a broker and also a deposit amount with which you can trade in a specific quantity of shares depending on the price of the stock you wish to trade in. You then place an order to buy a particular stock at a particular price and the quantity could be say 100. The trading platform will communicate to all networks that somebody wants to buy 100 shares of a particular company and this immediately results in an interested seller of that stock to make available 100 shares at the price you wanted and the transaction is done online. Hundred shares get transferred from the seller’s account to your account.
Several such trades keep happening through the working hours of the stock exchange on a daily basis and the relevant brokerage fee; taxes to the government and so on are all adjusted online in the trade that is executed.
Now the decision of what stock to buy is based on valuation of the stock and that is determined by the profits the company is generating, the future potential of the company or the industry and the time the buyer is willing to remain invested in that stock. Those are aspects that merit discussion separately.…
Property Management Tips For Investment Property Owners
Property Management Tips For Investment Property Owners
Property management knowledge and experience is very important when it comes to managing the properties that are in your portfolio. The care and attention that a property manager takes with an investment property can make a huge difference to the success of an investment property.
If a property manager is careless with the management there are several things that can happen, some of which are listed below:
1. Rents will start to accrue and will be difficult to recover, even to the point where there may have to be legal proceedings
2. Tenants damage the property
3. Maintenance is not kept up to date and over time what would have been ‘repairs’ become ‘replacements’ which is a much more expensive exercise
4. Rents are not achieving full potential because the property is not as attractive and competitive as others on the market due to it looking ‘tired’
5. There is major damage to the property and tenants are not removed promptly
So to ensure that your property will be managed properly here are some tips:
1. Research the area and find out where the good property management teams are. Speak to them and interview them to find out exactly what services they offer and what charges they make.
2. Check that they send you monthly reports on the property and three monthly inspection reports. In this day and age there is no excuse that they cannot take dated photos to send to you.
3. Tell them that you would like to inspect the property with them at least once a year so that you can personally keep updated.
4. Discuss with your property manager your purpose for owning this property as regards cash flow, costs, future goals (rehabbing or freshening up between tenants, etc) so that they know exactly how you want the property managed.
5. If you find that you cannot get the satisfaction you want from a property management team do not hesitate to finish with them. Before you do though, make sure that it has not just been poor communication that has caused the problem and one which can be fixed quite easily.
As a property investor you are in the business of property investing to make money so you do need to take responsibility of the running of it as a business. You need to treat the property manager as an extension of your business and ensure that there is good and frequent communication between both parties. Don’t do as I have heard being done, not make contact then 12 months later wonder why everything is not going as well as it should be. Insist on those reports and make sure that you are reading them and giving them the tick of approval.…
Diverse Types of Investing
Diverse Types of Investing
There are many investment types that you can begin your quest of investing in. Stocks, and bonds are some of the more typical ones that you can invest in. The only thing complicated about them are the sub brackets that fall under these investment types.
The stock market is one of the scariest places for people to invest in because of the high risk involved. There are three types of investors: Conservative, moderate and aggressive. The different types of investments all have their place in each one these investor prototypes.
Most conservative investors invest in Currencies or in options in the stock market. This basically means that conservative investors invest in money market accounts, CDs, and T-bills. These are the safest investments to make over a long period of time with low risk involved.
A more moderate investor invests in bonds and currencies as well. They may invest a portion in the stock market here and there. They may also invest in real estate that have low risk involved in them as well.
Aggressive investors are more involved in the stock market, which have higher risk. They will invest in other investment vehicles such as real estate like apartment buildings, rehab properties, expecting to get a lot of money in return from the rents of the apartments and rehab properties. They may even sell the property all together. The risk is that they may not sell the property as fast as they would like.
Before you try to dive into an investment vehicle, you should do more research on the many types of investing so you can get a good idea of how you fit into the vehicle as well as the risk involved. Pay attention to consistencies, trends and other forms of history that repeat themselves.…
American Debt: How Did It Come To This?
American Debt: How Did It Come To This?
The American debt, namely the total amount of money the federal government owes (including the deficit and the interest on borrowed money) is of circa $13 trillion this year, and is increasing at a fast rate. Out of this huge sum of money, some $8 trillion is owed to bond mutual funds and foreign governments, that is, to those that bought US governmental bonds, and the rest of $5 trillion to government trust funds such as Medicare and social security. But despite the fact the US owe a staggering half of trillion dollars to Japan and another half to the United Kingdom and China, most part of the national debt, namely 78%, is owed to domestic businesses and government entities. Has a whole nation deceived itself? Well, some lost big and some won big, but in the end everyone lost. Paradoxically, this is the truth.
Citizens have been encouraged to live on credit for decades, but that was fine as far as people could finally settle their debt; and they had to, if they wanted to borrow again as they were used to. But this habit became catastrophic with the real estate bubble. In less than a decade (1997-2006), the price of an average house had increased by 124%. Encouraged by these developments, a lot of owners refinanced their houses at lower interest rates, taking out a second mortgage based on the price increase. What they did with the money so easily earned? That’s simple: they spent it; only between 2001 and 2005 the refinancing money spent had doubled. But they have never thought that house prices could go down, credits could be impossible to obtain and mortgages to pay off and, therefore, that their properties would eventually be foreclosed by banks. But that’s exactly what happened.
And this was still only the tip of the iceberg. These prime borrowers had at least something to lose in favor of the crediting banks. But with the sub-prime credits granted to people that presented high risk of default (2004-2006), the banks remained completely exposed. And, as expected, they lost, and lost big. Besides, the bubble was over and house prices went down. Few could afford to buy them even so. So, at best, banks remained with a lot of houses they couldn’t sell. The question is how was such substantial crediting without the right securities possible in the first place? If the borrowers, just normal citizens, without sophisticated financial knowledge were unconsciously getting more and more indebted, what happened with the lenders – major banks – expert in financial intricacies? Why should they doom themselves to bankruptcy, lending unconsciously, at random?
Well, believe or not, exactly the government and the banks encouraged, if not generated the indebtedness, by financial deregulation, changed laws, poor financial enforcement, off-balance financing and elaborate financial creations such as derivatives, CDOs, CDSs, MBSs and other such. When regulators themselves come with tricks for circumventing the laws, there is no surprise that not only the common citizen loses but also those that weakened the laws. In these conditions, the $700 billion amount used by the government to rescue the banks that caused this havoc in the first place does nothing but confirms the self-deception scenario. In this way, all have become deeply indebted: citizens, the banks and the federal government. The paradox has been unraveled.
Possible solutions would be less government and consumer spending, more production and, of course, investment in reliable assets (definitely not houses), which warrant gains. So, if you still have money, buy gold!…
Owning Physical Gold – The Ultimate Safe Haven
Owning Physical Gold – The Ultimate Safe Haven
Paper currencies have come and gone throughout history, only gold has maintained its place on the market and has always been on top. At the same time, gold is the oldest form of money and people have used it in trades, businesses and so on since its special qualities have been discovered. As other currencies, the yellow metal has faced some ups and down, however in comparison with paper currency gold has increased intensively when the inflation took off in the 1970s.
With stock markets at record lows, banks closing and government bailouts on the rise due to the critical times we live in today`s world, people started looking for viable forms of investment. Gold proved to be as both viable and durable investment on the present market. While there are many forms of investment such as shares, virtual metal and so on, buying gold in physical bars or coins is not only safe haven, more, with a wise decision.
The reasons why to own physical gold are numerous, starting with the fact that the yellow metal holds its value for a long time, it`s price generally increases at a greater rate over the long term, while paper money or other types of investment usually don`t. In the last decade, gold has reached a high price for over 1,200 pounds and it will probably stay as this for quite some time compared with the dollar that has brought the world terrible financial crisis.
Another strong reason for which you should consider buying gold is that by owning and keeping it in physical form in your possession, you will still be able to purchase consumables with it in case your economies were to disappear overnight. The precious metal will remain strong in times of recession and as a proof in the past couple of years successful businessmen but also, ordinary citizens, have chosen this form of investment.
Owning physical gold means you have to safely store it in your home, or if you buy a substantial amount is better to keep it in a safe vault in a bank or private gold dealers. As a conclusion, the precious metal is seen as a safe haven because its price tends to rise when equities are falling and as a result your gold holdings should increase in value. Experts affirmed that those who bought gold in 2009 can reach a profit up to 30 percent if they sell it this year. So not only it preserves the wealth but it can also bring you a lot of profit.…
Five Tips For Buying a Rural Property
Five Tips For Buying a Rural Property
If you have decided to buy an investment property in the country then there are a few things you need to be aware of. It is important you understand that life in a rural area is a lot different from suburban or city life, and that although it may look peaceful and quiet, life in the country can be busier than you may expect.
Agricultural industry
When buying a property you need to be aware that agriculture can be a noisy and smelly industry. If you think you will be buying a property away from noise and pollution just because you are in the country then you would be wrong. People working in agriculture use machinery, such as tractors, harvesters and stock trucks, so expect traffic noises. Animals, such as sheep, cattle and chickens, can be quite noisy when there are a lot of them, so look at what type of farm is next door to the property you are interested in. If the sound of roosters crowing at dawn is going to drive you crazy then you might not want to live next door to a chicken farm.
Action
Know what action you can take to improve your property. If you have fallen in love with a property but are turned off by what is over the neighbours fence, then think about what you can do it improve your property. To minimise noise, dust or block out an unsightly neighbouring shed, for example, you can plant windbreaks. A farmer is not usually required to minimise impacts from their agricultural enterprise so be prepared to have paddocks next door turned from lush green grass to a ploughed area, for bushland to be felled for more pasture or for windbreaks to be planted that block your view.
Rural roads
Sharing the road in a rural area is different to sharing a road in the suburbs or city. It is common for stock to be moved along the side of a road, or even across it, and it is your responsibility to give way to livestock. Slow down and be prepared to have to wait. Road surfaces can vary in the country too, with unsealed roads being common. Roads are not always in great condition either, even bitumen roads. There are certainly no street lights either, so be careful driving at night and use your high beams.
Pests
As a rural property owner you are responsible for managing pests on your property, which includes both feral animals and weeds. Rabbits destroy crops and spread disease, and foxes kill many lambs and even newborn calves. Weeds are a major problem and noxious weeds in particular need to be removed.
Services
When buying a property keep in mind that you won’t necessarily have access to services, such as gas, electricity or even a road. Properties a long way out from town often don’t receive a postal service, and a school bus may not go past your front gate either. You are likely to have a septic tank instead of being connected to the sewerage system, and you won’t be connected to town water either and will need rain water tanks for drinking and washing.…
Business Gifts and Who to Give Them to
Business Gifts and Who to Give Them to
Every year companies debate whether or not invest in business gifts and if they do, who they should give them to. Budget plays a large part in the decision making process but it is not the only important consideration. Matching the gift and perceived value to each recipient is extremely difficult even if you know your clients well, let alone if you don’t. The value of the investment made in the gift and the potential return is also something that maybe people don’t like to think about but nevertheless is equally as important.
We give gifts to our family and friends for special occasions and over holiday periods because it is customary for us to do so and we enjoy giving. To some extent it is expected of us because of the commercial hype that has developed over so many years. However, our business associates do not expect us to give them gifts and are usually pleasantly surprised if we do. A big problem arises if we have a huge number of business contacts because not very many companies can afford to give to them all. If they know each other, the problem is magnified because people who don’t receive gifts will be envious of those that do and offended because they didn’t receive one.
As John Lennon once said “there are no problems, only solutions” and this is certainly true of an experienced, professional business gifts supplier. You can make a list of names, placing the most important clients at the top of the list, work out the budget that you can allocate and then have a meeting with your supplier. In the armory of business gifts at his disposal he will be able to advise you on how many gifts he can supply for the money available and if he’s good he’ll be able to provide a gift for everybody. He will have access to personalized bags, clothing, caps, leather products; laser engraved metal pen sets, clocks, watches, backpacks, sports bags, crystal, USBs, umbrellas and so many more items.
You may also want to include some valued customers on your business gifts list together with members of your staff for outstanding achievements. However, tread carefully if you want to use them for new business because that can be a minefield of etiquette. If you are bidding on a contract, giving the decision maker a gift will be seen as a bribe. It would probably never cross your mind to bribe someone but no matter how good your intentions are – don’t do it.
Taking business gifts to a first meeting in China, Japan or Spain will make you very popular but it will be frowned upon in the United States and the UK so if you have international business interests some cultural education will benefit you if you are contemplating first contact business gifts.Every year companies debate whether or not invest in business gifts and if they do, who should they give them to? Budget plays a large part in the decision making process but it is not the only important consideration. Matching the gift and perceived value to each recipient is extremely difficult even if you know your clients well, let alone if you don’t. The value of the investment made in the gift and the potential return is also something that maybe people don’t like to think about but nevertheless is equally as important.…