Many people love the idea of being a boss and being in charge of many people, however, it is not that fun to own a company and manage people. There are many things I wish I knew before starting a company and I only got to know after starting a company.
The cost of starting a company is high, you could double or triple the cost you predicted after doing your best research. So many people do their research based on the basic information given to them on internet or even if they find exact cost, there is always something extra comes up. You will be able to reduce the cost in your second project or when you expand your business, that#s because you will have proper contacts and better resources to reduce your cost. The second biggest cost is trusting others with the cost. Do it your self, other do not care if the cost is high or low.
Documentation takes really long, when someone tells you all the required documents, it is still not the end of it. Getting all the documents done is costly, therefore, try to take the delayed time in to consideration before starting your business. You will definitely tell your self that there is no end of the process, it feels like there is always something knew comes up.
Hiring and managing the employees is one of the hardest part of starting a company, I always have the mentality of every employee should be able to bring in monetary value to the company, because every employee has a high cost. When you hire a staff, how are they going to earn their salary and also earn extra for the company, and also ask them how long will it take for them to cover their salary. These questions are so important for hiring an employees for your company. Few things about cost in hiring an employees: The cost of legal contract, the cost of registering them to health insurance, national insurance, and contribution towards the pension fund. The cost of paying a lawyer to prepare the contract and making your employee a legal employee of your company. The cost firing the employee also needs to be considered because most likely you will fire employees withing 3 to 6 months of your operation of your company. If your employees do not know how to communicate with customers, then I suggest that you fire them. Why do I say this in a rude way? That is because you don't want and employee that does not have the same goal as you. The good and loyal employees with the same goal as you, will figure out the best ways to increase the growth of the company. This employee will contribute to your business, the employee that contributes to your business is the employee that things for their future. How to identify the employee during a hiring process? Ask them for their 2 weeks activity when they start working for your company, ask them how are they going to contribute for your company and how long will it take, ask them where do they seem them self in 5 years. It is so hard to find the right employee, and if you do find the right one, my advise is do not let them go, because one person can make bigger difference compared to 100 useless employees that will talk and not achieve anything. They will not achieve anything because they are not the type of people that will do what ever it takes to achieve the goals. I love employees that does not wait for the order but instead they take matters to their own hands. I love employees that saves for the company, I love employees with smart actions, but these employees are one in a thousand.
Customers are the most important people of your company, the are the people that brings money to your business, I would suggest that you focus on your loyal customers before the new customers. The loyal customers are the best, and they are the hope for the growth of your company. The customers and employees are the most important thing to understand before you start a company. The employees will not care about your customers, and customers will not care about your company. What is the best way to increase customers? It depends on your business, but the best way is to focus on your employees, because employees are the people that has to communicate with your customers. Customers do not care about you or your business, that is because they have more important things to focus on other than your business. They also feel that they have right to intervene in your business.
Basic thing you need to understand the mentality of customers, the customers do not care and they do not think about you, your product and your business. They will be your customer based on their needs and convenience. Make sure you understand the difference between ''doing a public favor or the needs of the majority of the people''. If you consider in doing a business that only few people are interested then you will be doing a favor to a public. The customers don't care about the effort you have to put to open that shop or offer certain products, they don't care about your risk. But, if you do close your business due to lack of customers, the customers will understand only when you close your business on how convenient it was for them when you were operating your business. But the few customers that had the demands cannot also support you forever, therefore, do a business that majority of the people needs.
You don’t tell them enough information about the return on investment
The approach of telling the investors on how many percents return they will get is not enough to convince to invest in your company or in your project. The investors have many questions that they would like to know before they can invest in your company. The investors like investing in the company that they know how and when they will get their return on investment. Give in details of how the investors will get paid from their investment such as, is it monthly, yearly or when the company is sold.
You don’t tell the investors about their exit strategy
Some of the investors are interested in investing in startups which can have huge value after several years. Explaining about the product is not enough, therefore, you need to explain about their exit plan, so that the investors will make a clear decision in investing. Explain in detail about the exit plan such as when and how. The investors want to know if the company will be sold in 5 years or if it will be IPO in 5 years. Therefore, you should tell them how many percentages of ownership they will have in the company. If you are looking for investors for your small business the exit strategy can be returning their investment with interest after a given year.
You don’t tell the investors about the value of the product
Your product might be really good and interesting, but the investors would like to know the value of your product in 5 years time. Telling how great your product is not enough to convince the investors, therefore, explain how important it is to the public. The investors want to know if your company will have a high value when the company is sold. Therefore, it is important to make a good projection of your product such as how many people will use it and how you will create public awareness of your product.
You don’t tell the step by step formation of your company
The investors wants to know if you are capable of forming the company, therefore, it is important to tell them about your plan in forming the company.
You don’t have a good team
If you don’t have a good team or if you don’t tell your investors how great your team is then they might not have faith in you delivering your business plan. The investors are usually highly interested in a company that has an experienced team. Therefore, it is vital to pick your team carefully.
Your cost is too high
The investors want to know the cost of your project because they want to know if you will get enough investors and they also want to know if you will exhaust the investment. If your cost is too high then the investors will want detail of the cost, if you don’t provide enough details then they might not want to invest because it shows that you are a lack of information about your business.
Many time I am asked if it is possible to earn $1000 from $100 investment in just a year, and I always tell them yes it is possible. At this article I will explain the one possible way to earn $1000 from just $100 investment.
The online store is among the best ways to turn $100 in $1000, sometimes the investment can be as little as $50. While I was doing my Bachelor Degree I invested only $50 and I earned over $1000 in just 6 months time by developing an online store. I spent $10 for the domain and $30 for hosting, it was cheaper back in 2012 when I started my online store. The marketing was free because I used Facebook to market my website and I received so many sellers. I also printed flyers for my website and distributed at my university, I used simple printing which cost less than $2 for 100 flyers. The business was simple, whoever wanted to sell things at my website they had to pay me only 30 cents per product per month. I also attracted buyers by offering free to sell second-hand books, which attracted so many visitors that was looking for second-hand books for their study. In the first month, I attracted over 100 sellers which I almost made my break-even. I know $30 a month was not enough money to earn but it was something. within 6 months I earn just about $500. There was a lot of work to do in running online store all by yourself but it was worth the hard work.
Study Abroad Website
The study abroad website was the best website I have created while I was studying. I started this website at the same time as when I started my online store but this website made more money than an online store. The online store was active for only 6 months since it required too much time and effort I had to shut it down. However, the study abroad was required less effort but helped me to earn more money. The domain cost $10 per year, and I used the same hosting as an online store. This website did not make money for about 6 months because I had to spend so much time and effort at the beginning for Search Engine Optimization (SEO). I have published so many articles with really good content, where I was ranked in the first page of google when prospective students were searched about the education in Malaysia, UK, and Canada. The website was getting up 1000 unique visitors from google and I did not use social media to market my website, but the social media was good for SEO. I was also writing so many articles about the best online store for students which helped me to get sponsors from online stores. I was also writing so many good articles about the universities which also helped me to get some sponsor from the university. The nice articles helped me to get so much sponsor money from so many different sources. By the end of the year I earn just over $1000 from these two websites, however, I earned over $5000 from study abroad in 2 years time.
In conclusion, you should not ignore your skills and knowledge, because if your skills and knowledge might be required by other which they are willing to pay for it. Don't look at things in most complicated ways but instead look at things in simple and easy ways.
At a young age, some people gets pushed to do sport and spend most of their times to prepare for the competitions and eventually achieve their dreams. In some of the sports athlete practice up to 6 hours daily which it takes hard work and courage to maintain the focus throughout the years. As being former tennis player I went through a lot during the times when I gave all my time to achieve to be a top professional tennis player. Drinking 5 raw eggs was the first thing to do when I started the day at 6:30 and skipping 1000 skips and then only have breakfast. The pressure, never giving up and going after my dreams were among the values that I gained while I was a tennis player.
In average, the tennis players play 20 tournaments a year, every match they play is under pressure. It is easy to tell the tennis players not to worry and just enjoy it but it is completely different when you are on the tennis court competing against a player that is fighting as hard as you do. The tennis players travel to all around the world to play tournaments some weeks in Japan and another week in South Africa. The cost of playing tournament can be very expensive with the flight tickets and accommodation for yourself and for the coach. Every match played in the tournament is under pressure, there are so many people that depend on your performance. The muscles get tight and hands start to shake, only thing comes to your mind is “need to focus”. The average tennis match is 1 hour and 30 minutes and it can get up to 3 to 5 hours regardless if it is in summer or winter. Handling pressure since the age of 8 is one of the nature of tennis players. I remember the times when it gets to 5/5 in the third set tiebreak after playing for 3 hours in summer, handling the pressure during these times are experiences which are rear to find in other places.
Never give up
I saw so many people giving up at workplaces and in business due to pressure. I saw people quitting because they cannot handle pressure at their job. Imagine if Andy Murray quite after every match he lost in tennis, he would never be Olympic Gold medalist in Tennis or Wimbledon Champion. In tennis or any types of sports quitting is just not an option. It is the worst feeling losing first round in the tournament after flying for over 10 hours to another country and trained for 5 hours of tennis and 3 hours of fitness every day. Regardless of losing in the first round or in finals, we try even hard to be ready for the next tournament.
Going after your dreams
It is easy to dream but it is hard to achieve the dreams, there are so many sacrifices that need to be done to achieve your dreams. I gave up so many years of my life for tennis, but it was worth every hour that I gave up for tennis. When I used to play tennis I would learn from every match, there was a time when I lost a match because I wasn’t fit enough. I would try to sprint on every lap when our fitness coach used to make us run 6 laps around the athletic tracks on every Monday. Regardless of the pain, we would do what every it takes to achieve our goals, these are the values that is required in life to be better athlete to get to your dreams. We were taught to set short term goals which would help us to get to the long term goals. These things are being taught at corporations and organizations to their employees to achieve the short term goals in order to achieve the long-term goals.
A futures contract is an agreement to trade certain underlying asset such as commodities. There are certain essential elements of the futures contract for it to be legal. It is important to understand these elements of the futures contract.
Everyone likes to own a company but not many people are willing to take the risk and make that first step to startup a company. The key to startup a company is knowledge the more you know the more desire you will have to startup a company. It is important to have enough information to have a successful business. You cannot simply have a dream of owning a startup and start a company because you will fail, you need to know the recipe to run a company with a specific business. The business idea alone is not enough because you need to have the set of skills to put the company together and run it.
You cannot do business unless if you register for a company in the country where you would like to conduct your business. It is essential to learn the procedures of registering a company. You also need to keep in mind that every country has different rule and regulation. You can also find agencies that provide services in registering a company for you.
Having an office or an address for your business
Once you learn the procedures of registering a company it is essential to find an office. You also will need to find an office before you can register for a company because you will need to use an address to register your company. If you would like to conduct your business without an office, then you can register with a virtual office to register your company. There are many companies that offer virtual offices and the cost of renting virtual office is not costly, it can cost between $500 to $1500 per year.
Finding an accountant
One of the essentials of starting a company is finding a good accountant, if you already have an accounting degree or experience then it shouldn’t be a problem. You also would like to keep in mind that you don’t have to get full-time accountant but instead, you can keep all you receipt and give them to the accounting agencies that prepares your annual statement. You can also purchase accounting software and use it yourself, you can find videos on YouTube that teach you how to use the accounting software. This step is an essential step for a starting up a company because many people worry about the accounting difficulties that they might face. In the long run, it is highly advised to have a full-time accountant.
Developing a website for your business
Depending on the business you would like to conduct but the website for your business is highly advised. For example, if you would like to open up a restaurant then website is highly advised because you should use the website and social network to increase awareness. The website is the face of your company, therefore, it is highly advised to have a website. The website of your company does not have to be fancy but it should be informative and interesting. Visitors like using websites that are user-friendly. It is also important to do Search Engine Optimization (SEO) for your website so that you can drive traffic from google and bing search.
Finding good employee
It is essential to have good employees for your company, the employees can add great value to your company. Employees come before customers because if you have good employees that know all the essential steps to treat customers well then these employees will keep your customers which will add huge value to your company.
Funding your company
I left this to the last because I did not want you to think about funding, in the end, most of the people do not even bother learning because they don’t have money to finance their company. Funding a company is an essential part of starting a company but if you do not have money to finance your company that does not mean you should not learn. There are many ways to fund a company few of the ways to finance your company are: Taking a loan, borrowing from friend and family, having a partner and having a customer before you start your company. There are several businesses that can be started which you can get money from customers in advance which will help you to start your company.
Everyone has a unique relationship with money. As the saying goes, ’money makes the world go around’. Three-quarters of Americans say money is a source of stress in their lives. Not having enough of it can be a major stressor. Having it and not knowing how to use it to make it last is also stressing. The financial disorder can be explained as patterns that are self-destructive and self-limiting on money related issues. In this article, we will cover three types of financial disorder that many people face in their daily life.
This is a condition where the sufferer believes that everything revolves around money and can be solved by getting as much of it as possible. This can be seen in behavior such as workaholism, where one will work more and more in the belief that money will flow in as long one is working for it. Some will be tempted to take shortcuts to making lots of money. This could lead to pathological gambling where one is always looking to hit the jackpot.
On the other hand, there are overspenders who believe spending money pulls them to make more so that they can spend it. This destructive cycle traps them as strongly as a drug addiction. Money worshiping is one of the types of financial disorder which many of us might have.
Those suffering from this condition believe that everything will be OK financially as long as they are not spending any money or spend as little as possible. This underspending can be seen in an obsession with bargains and discounts. Sufferers of this condition will also be misers. Hoarding is also a tendency of people suffering this kind of financial disorder. This kind of disorder can lead to denial where one belief ignoring expenditures will lead to better financial stability. Refusal to look at bills, bank statements and another evidence of expenditures is a good sign of this disorder. Money avoidance is one of the types of financial disorder which might not be big of a deal but it makes a huge difference in our life. The outflow of money is not checked and controlled, therefore when you need money it will not be there without realizing.
Financial relation disorder
This financial disorder is seen in people who believe that they should not discuss their money issues with other people even close ones like spouses. When they report on money matters, they lie and give incorrect information. Extreme behavior from this disorder could be seen in spending large amounts and keeping it from a spouse, or taking out a loan without reporting to the spouse. The financial relational disorder can also be seen in people who give away money even when they cannot afford to. For example, a parent supporting an adult who cannot get finances straight. This is also referred to as financial enabling. One feels guilt at being financially successful when others especially close relatives are worse off financially.
Being a good entrepreneur takes skill, good timing and often luck. Many people get into business and find it hard becoming successful, or take years after many tries. You could be trying your hand at business with no success. May be it is time you looked at what is keeping you from success.
It is surprising how many people get into business without giving it much thought. Following the herd on a successful a trend is tempting and many entrepreneurs go along without doing enough research. Going headlong into a business without a business plan is the source of failure for many entrepreneurs. You must do enough research into the product, the market and how competitive the product will be once on the market.
Going along without a business plan is compounded by making rushed decisions. Careful thought is required for issues such as financials, human resources and so on. Entrepreneurs make decisions on issues they are not competent in. As an entrepreneur starting out, you will be tempted to be the accountant, marketer and director all in one. This leads to wrong decision making on issues because you are ill informed.
You don’t put a good team together
You will have to take on help when running a business. Your success will very much depend on who you choose for your team. Your choice should ideally be based on merit and competency. Executing your business plan successfully will depend on how well the team understands it and their capacity to put ideas into action.
You have a great idea and no capital but no one is willing to pump money into the idea. Why are venture capitalists not buying into the idea?
Your idea has no value
Your idea is too costly
Many people would like to eat chicken fed exclusively on shrimps from the Mariana trench. It sounds good but what is the cost? A good idea could be too costly to implement such that it is not financially viable. When it gets to the market it could be too expensive to attract a market, or be too noncompetitive to survive in the market.
Always look at similar or almost similar products in the market when designing it. Assess the competition and try looking at what value your idea could add on top of what is on offer. If you have a new product, look for ways to cut down on costs such that the final price is not too high as to be nonviable.
You have a bad team
Your idea is only viable only if your team is competent. Developing an idea into a great product requires a good team, knowledgeable on the market trends, and industry dynamics. Venture capitalists could be shying away from your idea because they don’t have faith in your team to deliver a great product. Your team could be lacking in skills to make the product viable on the market.
Picking the right team to develop your idea involves looking at their technical skills and their understanding of the market the product is meant for. The team must also buy completely into your idea. Potential investors can read the team’s confidence in your product by how well they can explain the concept. Ensure every team member gets the concept and can convincingly explain it. Always engage professionals in areas that you are not competent.
The Leverage ratio is the way to indicate the risk factor of banks, if the leverage ratio is too high then the risk of the bank is high. There are certain percentage of the fall in earnings the banks can handle without distressing the health of the bank. The leverage ratio is asset to equity. After obtaining the leverage ratio then we can find by how much the fall in the earning banks can handle.
Leverage = Asset / Equity
Risk = 1 / Leverage Ratio
Comparing the leverage ratio of 3 Banks
BANK A 2015
Total Asset: 500,000
Total Liabilities: 350,000
Total Equity: 55,000
The Leverage Ratio: 500,000/55,000=9.91
Risk factor in falling of earnings: (1/9.91)x100=11%
The Leverage ratio of Bank A is 9.91 and if Bank A has more than 11% fall in the earnings then the bank will be at risk. Bank A can bare up to 11% fall in the earnings.
BANK B 2015
Total Asset: 400,000
Total Liabilities: 300,000
Total Equity: 35,000
The Leverage Ratio: 400,000/35,000=11.43
Risk factor in falling of earnings: (1/11.43)x100=8.75%
The Leverage ratio of Bank B is 11.43 and if the earnings falls by more than 8.75% then the bank will be at risk. The high the risk factors in falling of earnings then better it is because that is the percentage in fall the banks can bare without going into financial distress.
BANK C 2015
Total Asset: 350,000
Total Liabilities: 300,500
Total Equity: 50,000
The Leverage Ratio: 350,000/50,000=7
Risk factor in falling of earnings: (1/7)x100=14.3%
The Leverage ratio of Bank C is 7 and if the earnings of Bank C falls by more than 14.3% then the bank will be at risk.
When we compare all three Banks the Bank C has the lowest leverage ratio which means the Bank C has the lowest risk of financial distress.