About Us|Contact Us|Register|Login

[google-translator]
Currently Browsing: Entrepreneurship

4 Questions to Ask When Choosing A Financial Advisor

4 Questions to Ask When Choosing A Financial Advisor
4 Questions to Ask When Choosing A Financial Advisor Research indicates that many people are intimidated by money and are, therefore, not so great at managing their personal finances. That’s because most people lack personal finance knowledge, according to sources. As a result, only 40% of Americans would be able to cover a $1,000 unexpected expense, Bankrate reveals. That means they’re only one emergency away from bankruptcy. About the Author: Michael Deane has been working in marketing for almost a decade and has worked with a huge range of clients, which has made him knowledgeable on many different subjects. He has recently rediscovered a passion for writing and hopes to make it a daily habit. You can read more of Michael’s work at Qeedle. Not knowing the basics about money management can cost you a lot (much more than what you would pay for the services of a financial expert). If you are one of those confused individuals, turning to a financial advisor seems like a logical choice. But how to choose one? Here are some questions to help you choose the right financial advisor for you.  1. How Will You Help Me Reach My Financial Goals? Let’s start with the basics. You would like to start saving for your retirement or you’re interested in becoming an investor but have no clue how to begin. The first thing you should ask your potential financial advisors is, therefore, this: how will you help me achieve that? In order to answer, the potential financial advisor will have to ask you several questions first. Don’t worry, that’s what they do. In order to help you achieve your financial goals, the advisor must know what your goals are, whether you’re looking for long-term or short-term wealth growth, if you are thinking about early, what is your current financial situation, how much you earn, etc. After receiving this information, the advisor will then recommend the best path for you to follow in order to achieve your goals. Keep in mind that the questions above are crucial for you to know whether to hire said financial advisor. They should not simply give you generic advice before hearing the details about your financial situation. 2. What Qualifications/Credentials Do You Have? Don’t forget to ask the financial advisor you’re talking to about their credentials and qualifications. Why should you hire them? Why is this important? Because there are countless financial advisors out there  and unfortunately, not all of them are equally good at what they do. You want someone you can trust with your finances. As you yourself don’t know much about personal finances, it would be easy for someone to misguide you when it comes to money management. Try to find a way to check their credentials and ask about their previous clients. Perhaps there’s someone you know among them so you can check this information. Speaking of that, if you don’t want to risk it, you should ask a friend or family member to recommend a financial advisor that has helped them before. 3. How Much Do You Charge and How Are You Paid? You have the right to know what this service will cost you so make sure that you don’t forget this question. You should know how much they charge and how they are paid too. Are they paid by commission or is there a flat fee? Some financial advisors charge a percentage for the assets that they manage while others charge an hourly fee. Knowing exactly how much the service will cost you will help you determine which financial advisor to hire. If you can’t afford an expensive advisor, perhaps you should...
read more

An Introduction to Contracts With Customers

An Introduction to Contracts With Customers
Do you remember the first sale that you ever booked or made on your own? It was probably pretty exciting — that feeling of elation and top-of-the-mountain. You suddenly realize that you might understand how this whole business thing works and you might be able to do this. But of course there are practicalities to consider when you make a sale. It can be tempting to recognize revenue right away, but there’s always a risk. What if the sale cancels, for example? What if it costs more to create the product or service than you’ve booked? It just can be a difficult process to learn the ins and outs of recognizing revenue. Standards to Recognize Revenue Fortunately there are standards to use that others have figured out. These standards are a great way for companies to make sure that people understand what they are doing is on the up and up. Non-accountants must be aware of the concept of recognizing revenue from contracts with customers. Because payments are often not a straightforward affair, accountants have to allocate revenue using specific standards set by national and international accounting boards. While this information doesn’t seem important for non-accountants to understand, it is. Knowing when revenue can be recognized in your company’s financials affects everyone, from the salesperson’s commission to the marketing budget next quarter. What are those standards and what are the takeaways from them? This graphic explains it.   To understand and accomplish the new revenue recognition standards, businesses should complete the following five steps:  1. Identify the contract with your customers Clearly identify the goods or services provided and describe each party’s right to them   2. Identify your performance obligations Specify exactly what you owe your customers and explain what defines “good performance.”   3. Determine the price of your products or services When doing so, don’t forget to consider promotions and other discounts.   4. Allocate a transaction price to the obligations specified in the contract Align the price of your services with your compnay’s performance obligations   5. Recognize revenue as performance obligations are satisfied   Sales people also must understand the difference between booking and revenue. A booking is when the customer makes a commitment via a contract to buy your services or product. Revenue is when the revenue “counts” on the books – When accounting can account for the revenue as being...
read more

What is Equity and Why is it Important to Your Business

What is Equity and Why is it Important to Your Business
What is Equity and Why is it Important to Your Business?   So, you’ve finally started your own business. You are officially an entrepreneur. While you might feel a fleeting sense of accomplishment, it may not last forever. For many new business owners, the thrill of starting a business wears off quickly and is replaced, at least in part, by worry. Will your business be profitable? Have you taken every legal step possible to make it a legitimate endeavor? Did you borrow too much money to start your business? How long will it take to be profitable? While there are many notions to understand as a business owner, equity is a key concept and you should have a firm knowledge base of how it works. It is essentially what will drive your business and its profitability.   What is Equity? Equity is essentially the value of any asset, in this case your business, minus any liabilities on that asset. A liability may be a loan or debt that is owed against the business. Here is an example: If you bought your business’s physical building for $400,000 and the mortgage balance is $200,000, your equity is $200,000.   There is also the concept of owner’s equity. This is essentially the total amount of equity you, as the owner, have in your company. Let’s look at this in another example. If your company has $200,000 in total assets but also carries $50,000 in total debt, your total equity in the business is $150,000. A simpler way to think of owner’s equity is that it is the amount of money that would be left over if you sold all of your business assets and then paid off all of your business debts. The lower your debts, the likelier you are to have positive equity in your business and the higher the probability you would make a profit should you decide to sell it.   Negative Equity Negative equity, as its name suggests, is not a good thing for any business owner. It applies to the concept of when your ownership interest in your business is equal to less than your liabilities and debts. So, for example, if you purchased your business’s building for $300,000 and took out a loan for $250,000 to pay for it but the value drops to $200,000, you now have negative equity. That is because the value of the building is now less than the balance owed on it. You want to avoid negative equity as much as possible. You would not be able to sell your business for a profit if you had negative equity.   Types of Equity You can have both tangible and intangible assets in your business. Tangible assets are those that you can physical touch. If you run a business that keeps an inventory of product, that inventory is a tangible asset. An intangible asset cannot be touched but may even be more valuable than a tangible one. An intangible asset might be the reputation of your business. This can obviously bring you more customers. Another intangible asset might be brand identity. Everyone knows, for example, that golden arches represent McDonald’s. The more recognizable your brand, the better. If customers know you, they may use you for your services or goods.   Importance of Equity Equity is of the utmost importance when it comes to your business. As your owner’s equity increases as time goes on, you can potentially sell your business and turn a profit. So, if you want to eventually make a profitable business, you need to be consistently building equity in it. This means the value of your business should...
read more

Your Essential Guide to Starting a Small Business

Your Essential Guide to Starting a Small Business
Here’s to New Beginnings: Your Essential Guide to Starting a Small Business   When you have a great business idea and strive to achieve financial independence, you might be thinking about launching a small business. Every huge corporation started with a small business, so why not? While you can definitely achieve success in the business world, keeping your small business successful for at least 2 to 5 years is a huge work. This game is worth the candle, though. So, if you’re trying to start a small business, here’s your handy guide to help you out:   Start your journey with research Perhaps, you’ve already come up with a unique – or any – business idea, but is it going to bring you success? Does your business idea have many competitors? Before you take any step, do your own research. Consider running your idea through a simple validation process that will help you to figure out the future of that idea. First of all, your business idea should offer something – be it a service or a product – that the modern market needs these days.   There are many ways to find out if a business idea will be successful, such as focus groups, deep research, and in most cases, trial and error. But before you go through trial and error ask yourself:   Does the market need your product/service? Who are the people who will want to use your product/service? What are the companies that offer similar or the same product/service? Will you be able to compete with them? It’s important to ask confidently without any fear or disappointment.   Create a business plan Any business idea requires a powerful business plan, which will become your guide during the process of establishment and business growth. There are many types of business plans, so choose the one that will suit your idea.   If you’re looking for financial support from a financial institution or an investor, creating a basic business plan is essential. This business plan is usually thorough and long, and contains a set of sections that banks and investors check out when they’re validating a business idea. In case, you’re not looking for any financial support and you’re going to invest in your startup yourself, it may be enough to create a simple and short business plan just to give you the initial steps you should take. You can also come up with a working business plan on a piece of paper and change it as you start working on it.   Consider your finances Generally, a startup doesn’t need too many investments, yet you’ll need some money to cover a number of expenses during the first months or even a year before your business will earn a profit. Calculate the one-time startup expenses like property leases, permits and licenses, legal fees, equipment, branding, insurance, inventory, market research, opening events, trademarking, etc. Then, calculate how much money you will need to keep your startup running for a year (your own paycheck, employee paychecks, utilities, rent, advertising, marketing, travel expenses, supplies, etc.)   As soon as you find out an approximate amount of money, think about the ways to find them. You can either save money or borrow from family or friends. Many new entrepreneurs also apply for an SBA loan. Filling out an SBA personal financial statement may be tricky, but here’s a guide to help you out.   Select a business structure Whether it is a limited liability company (LLC), a partnership, a sole proprietorship, or even a corporation, your next step is to select a business structure. Your business structure will affect a lot...
read more

How do I Become an Independent Contractor

How do I Become an Independent Contractor
Rolling Up Your Sleeves: 8 Steps to Registering as an Independent Contractor Are you ready to be your own boss?  There are many advantages to becoming an independent contractor, some of which we’ll cover today. But it’s also a big responsibility – one that you and you alone must handle. Here are some general steps you can take to make your dreams of striking out on your own as an independent contractor a reality.   Learn what an independent contractor is.  First, learn more about what being an independent contractor means. To be an independent contractor, you must have multiple clients (companies) annually. You own your business at least in part, work with your own materials, tools, and expertise, and each job you take on is considered ‘temporary’, as you will leave when your task is complete.  Pick your business name.  Now, pick a name for your business. Make it something other than just your first and last name, as you can get some good marketing in with a clever or memorable name.  Get licensed.  Next, head down to your local city or county clerk’s office and figure out whether or not you’ll require a license to operate where you live. This is especially important if you work in any type of labor/contractor field. Often, you are required to be licensed in your trade as well.  Get insured.  Whatever you do, don’t skip this step! Your career as an independent contractor could be over as soon as it begins if you get entangled in a lawsuit with a client. Check out various professional liability insurance companies to find a policy that suits your industry and individual needs.  Take care of the accounting end of things.  Decide whether or not you’ll hire an accountant. In many cases, this isn’t necessary; many independent contractors get by fine on their own with accounting software.  Make estimated tax payments.  This can be a little tricky, but do your best to come up with a ballpark figure on what you’ll make in a year. Now, you must make four estimated tax payments throughout the year. Trust us, you do not want to end up owing all at once, or end up attracting the attention of the IRS in any way.  Stay motivated.  We all lose steam, and we all find ourselves stuck in a rut from time to time. But as an independent contractor, you need to maintain the will to work and consistently formulate ways to draw in new clients. Create a routine and schedule for yourself, even when work is thin.  Enjoy the benefits.  While it can have its tough moments, being an independent contractor is incredibly freeing. You make your own hours, you dictate what you’ll be paid, and most of all, it’s your chance to do what you love for a living. Appreciate it!   Finding the right work-life balance can be difficult, but when you’re an independent contractor, you make the rules. Start off on the right foot by taking care of licensing, insurance, and accounting, and from there, the sky’s the limit....
read more

« Previous Entries