Long Term Financial Planning

A probably angry Lee Iacocca was indicating that finance is something that has to be pre-planned, planned, re-planned and even post-planned. Financial planning in itself does not involve just setting budgets, wage rates or deadlines. It is all about getting to know realistic work schedule, the manner in which they can be executed, back up plans that can be used and the least cost with the help of which the entire project can be executed. So basically, financial planning and growth forecasting, both involve, the answers to the 4 important questions, why, when, where and how (answers have to be cost oriented).

Steps in Long Term Financial Planning

Step 1: Let us take the example of a coffee shop, whereas a financial planner, one has to find legitimate answers to 4 questions, namely:

Why should we be producing a specific item on the menu card? (consider cost of production and sales price)
When should we produce such an item and for what time duration? (bear in mind seasonal costs, inflation of raw material prices)
Where should we produce the item, right in the shop or some production center? (consider transport cost, nature of goods and selling cost)
How should one produce the item, manually or mechanically? (consider equipment and personnel cost)

Step 2: The second step is to assess your business environment. In this step, surveying the competitor's performance, pricing and distribution is an absolute necessity. In such a scenario, you may also prepare a cost sheet of the financial features of production, namely, the money that you would have to invest as a manufacturing cost, its sales cost, and the profit that it would yield. Logically speaking, the sale price should be more than the cost price and the return over asset ratio/return over investment ratio should be healthy. While finalizing these three figures, you will need to take into consideration 3 important aspects.

Average spending capacity of your customers.
Your competitor's quality, quantity and price.
Popularity of the product, potential market, customer retaining capacity of the product, etc.

Though the trend of such products is more experimental in nature, they might become full-time, public favorite products, hence it is also important to make a financial provision to recover losses, that arise in the experimental period, until the product establishes itself in the market.

Step 3: The third and fourth step are more analytical in nature and from the finance point of view, they are also quite expansive. The idea that you need to implement in the third step is allocation of resources in such a manner that you tend to make a genuine profit in sales, during the long run. In this step, you will be using and analyzing cash flow statements on almost a daily basis. The key is to have uniform cash outflows for consecutive days/months/years. Cash outflow is basically all expenses and losses. Losses are quite uncontrollable but expenses are definitely controllable. Hence search for raw material sources, manpower and production processes that will help you to maintain a uniform and low per unit cost for the item/product. For example have regular suppliers, who will supply at an agreed and uniform cost. This uniformity will eventually come in handy to curb and control unexpected losses, and will also help you to keep a good hold over the market.

The second part of the third step is making monetary provisions. This is absolutely essential due to the fact that no business is risk-free. Such provisions include advance to the raw material supplier, insurance, provisions for bad debts, extra services, etc.

Step 4: I would like to call this step as retain, sustain and entertain. This step is quite an advanced one, and basically includes many different aspects, that aim at retaining the customers. The first important function of this step is to generate regular data and cash flow statements. With the help of these statements you will realize whether that very item on the menu is proving to be profitable or not. At the same time, you also need to maintain a statement that records cash inflows and outflows over a longer period of time (in months or a quarter). Thus, you will realize what is profitable for your business, and what your customers want.

To sum up the whole theory, it can be said that long term finance planning is a 3 dimensional graph, with customer, product and market being the dimensions. The essence of cost and time are added to every dimension. After all, the key to successful long term financial planning is to facilitate all three dimensions logically, bearing in mind the essence of time and money.
By Scholasticus K

Are You Taking The Right Approach To Marketing?

I always find it interesting that many small business owners don't appear to believe that marketing is a priority within the business environment. There seems to be an appreciation of the importance of various other tasks, but there's often a limited approach to the world of marketing.

What this often means is that this subject only really becomes more of a priority once there is a direct problem being faced. Typically, we might see this as being represented by a lack of customers, sales and income. In such situations, there is the sudden need to work out what's going wrong.

How does this work out? The problem with such an approach is that marketing tends to work best when it is planned and is part of an ongoing process. Indeed, it's something that I would suggest needs to be at the very heart of any business. I can certainly see, however, that it may sometimes take a back seat.

The issue here may be that there are plenty of other issues that may appear to be more of a priority. As an example, you may find that you spend a lot of time stepping in to deal with emergencies. Although you may have a number of employees, there's a fair chance that you see your own role as involving some degree of direct activity.

If staff members are attempting to deal with an unhappy customer, for example, then there may be a perception that having the boss available to get involved might ease the situation. This may be true, but you do need to think about the overall balance of the situation. The truth is that getting involved with such tasks means that you won't be carrying out other activities.

It's frequently the case that marketing is classed as one of those other activities and gets left out. What this can mean is that the marketing performance of the business can tend to suffer, having an impact on overall income levels. You may already be aware that this is happening and you can be sure that such a scenario means that you will be losing business to rivals.

If you believe that you have a problem, then there's a fair chance that there is something wrong with your existing marketing strategy. It may be the case that, in theory, you have a sound strategy in place. The problem may be with the manner in which that strategy is actually being implemented. It's hard to identify the problem without sitting down to investigate it further.

Do you need to have a written marketing plan? Although you may not see this as being critical, I certainly find that it can be useful. The danger is that such a plan may be discarded in a drawer or cupboard. It really is vital that this should not happen.

Once you have written a plan, documenting a comprehensive strategy, do make sure that you refer back to it at regularly intervals. You'll want to ensure that you always stay on the right path.

With printing Basingstoke experts you can sort out your marketing, as explained in more articles by Simon Barnett. This article may be used by any website publisher, though this resource box must always be included in full.

Article Source: http://EzineArticles.com/?expert=Simon_Barnett

How Social Media Engagement Enhances the Overall Customer Experience

We can look at social media first by focusing on traditional methods of communication. Traditional media including radio, television and magazines implemented one-way, static messages ideal for viewing and not responding. Traditional advertising methods required the business to get space in newspapers, magazines or create a television commercial. These were expensive and their impact could not be easily measured.

Web and mobile technology has made it easy for anyone to create online content and distribute it to audiences online for free. This reduces the cost of advertisement as you, as a company, do not have to part with large sums of money to have your ads published. What's more, distribution is almost instant.

Social media comes in many forms: reference sites (Wikipedia), blogs, micro blogs (twitter), social networks (Facebook), discussion forums, social bookmarking and voting sites (Digg), virtual worlds (Second life) and media sharing sites (YouTube), which are vital in enhancing the customer experience. These are visited by millions of people around the world every day and your business is sure to reach many people in a short time. As we speak, it is very probable that your customers and competitors are already using social media.

The first strategy to focus on is monitoring. Customers and competitors are out there on the web talking about your business or products. Giving a response or taking part in the conversation will build a sense of trust and confidence they have in you. Before you respond to any questions or provide information, you need to know what they are talking about, where it is being said, and who is talking about it. Tools abound on the web which search for your name, business name or product. Set up an account on your RSS feeder reader and monitor the feeds daily. Such tools include Technorati search, Google news search and Social Mention just to mention a few. Through this, you will be able to get complaints about your products, get suggestions on how to improve and what they love about your products. You can also find out what people say about your competitor products. This will put you ahead of competition, while providing customers with what they want.

Once you have discovered the information, you will need to respond. The response must be well timed and planned. Responses will show the potential customers that you are concerned and you can listen. This goes a long way to make them build trust in you.

In summary, posting information through social media portrays the human side of your business. It also allows for two way conversations between you and the customer thus encouraging interactivity, connection and feedback from potential customers. The use of social networking sites enables customers to connect directly with the people in your business making them feel recognized, respected and welcomed. After all, isn't that how we want to feel?

Article Source: http://EzineArticles.com/?expert=R._J._Foster

Worker's Compensation Decreasing Rates: Is this Good for Employers?

Worker's Compensation Increases:I wrote this article about how to reduce your workers' comp insurance costs on my company's blog last week based on the report that workers' comp rates were set to increase at least 7% based on new legislation and company projections.

Employers will have less choices for workers' compensation 

Since then, there have been some more news on workers' comp where State Fund, CA's largest insurance company for workers' comp, has said that they will lower rates by 7%.  This sounds like good news to most business owners on the surface, but insurers lower rates are motivated by many factors.  See Insurance Journal's article: Calif. State Fund Board: Drop Rates 7%

As the CA workers' comp market begins to tighten, the State Fund is putting itself in the position to gain more market share in a shrinking market.  When an insurance market tightens it means that consumers will face higher rates, less discounts, tougher underwriting, and less choices of companies.  These market conditions are good for companies such as State Fund because they can entertain many risks that other private insurers will not be able to contemplate.

Lowering rates may force other private companies out of the workers' comp market because they will choose not to compete where they can't make a profit.  This is bad for the business owner because it will mean higher overall costs.   

The State Fund decreased rates will start January 1, but not all class codes renewals and will most likely not be in affect till second quarter of 2013.

'via Blog this'

Get Business Insurance Quotes Online

Getting business insurance quotes online is a fairly easy process. However, many people do not know how much or what type of coverage they need. Take a look at the suggestions below, many of these are required to ensure that you can run your company without the fear of excessive liability. Remember to include all of them in your application before requesting the final price point.

Property insurance is probably the most important type of coverage needed. In the event that your property is damaged, it ensures that you will be compensated accordingly. Get protection against fire, flood, vandalism and any other type of damage that may possibly affect your building or property.

Workers compensation coverage is also very important for you and your employees. This ensures that if they are injuries on the job, your plan will payout a specific amount to the injured employee. Not having this type of coverage can leave you open to liability and you can be sued for damages. To avoid a devastating effect on your finances and business, make sure that this type of coverage is at the top of your list.

Make sure to include general liability coverage. This protects you from liability in the even something happens to a customer or to one of your employees while inside of your establishment. Some people prefer this plan to the workers compensation plan because it also covers patrons. However, consult with your provider to see which one is better for you.

In the case where you have company vehicles, you need comprehensive vehicular coverage. This means you, the individual, will have some protection against personal financial loss in the event of an accident. This type of coverage protects you, your employees, other passengers, property and anyone else involved in a collision with your vehicle.

You can also request health insurance for yourself and your workers. While this may eventually become a deductible from their salaries, it is a big incentive to many employees. It could also help you with getting quality workers who perform at your desired standards every time.

By requesting all the types of coverage outlined above, your are on the right track to getting detailed business insurance quotes online. Search for websites that can provide all the aforementioned at a reasonable price. Remember, if you are not sure which ones you need, consult with the provider before making any final arrangements.

OzInsure is a leading insurance company in Australia providing cheap contents insurance, If you are looking for the best insurance company in Australia then you should look at: www.ozinsure.com.au

Basic Information On Health Insurance Comparison

When one is offered health coverage at their place of employment there are many variables to consider. There are generally two main options and possibly one other that one can consider. Health insurance comparison is something one should think carefully about when making a final decision.

The two main types of coverage are generally an HMO or a PPO. In some cases some firms do offer an EPO. An HMO is generally less expensive than a PPO. An HMO can sometimes be limiting in some services and in most cases will need referrals from one's primary doctor to see a specialist.

A PPO can sometimes have a high deductible before the coverage will kick in. This type of insurance has the freedom to select an doctor or specialist within their network without first getting a referral from their primary doctor. If one does decide to go out of their network the co-pays and services received will be slightly higher.

If an employer does offer an EPO this kind of coverage would be the combination of an HMO and PPO. One does not have to schedule an appointment with his primary doctor to get a referral and his co-pays and services received are covered without any additional costs like a PPO. The prices that he will pay will likely be the pricing structure of an HMO with the privileges of an PPO.

Selecting the right kind of coverage will vary from individual to individual will differ as each person has a different degree of issues. For the individual that might have chronic illness like diabetes or asthma might want to consider a EPO or PPO. These types of chronic issues need specialized care and a direct link to the specialist of one's choice.

All three types of health coverage will have a co-pay of some sort and the amounts will differ depending on what the employer's type of coverage they have selected for their employees. Most office's will want the co-pay to be paid up front before services can be administered. Most accept major credit cards, debit cards and personal checks while other want cash or a check. Each office will have different policies so one should always double-check before arriving at one's appointment.

Health insurance comparison information should always be looked through completely before one makes a decision. Asking the necessary questions that one might have is always the best policy when in doubt. This is especially important if one had family members attached to their coverage.

Article Source: Anissa_Williams