How poor business decisions affect credit
Posted by admin in personal finances, pricing policy, revenue, shareholders, shares on May 25, 2010
The demise of this company was probably due not to any single factor or even to poor business decisions, but to a lack of focus on vision. At the very least its vision became blurred. Scrambling with temporary solutions failed to address the company’s fundamental issue. As its market changed, it needed to clarify and expand its vision rather than busy itself with diversions.
As the vision defines the ethereal qualities of the organization, the mission statement defines the task functions. It states how the vision will be accomplished. Generally the mission statement defines the area of the organization’s expertise and targets a specific industry or population. For example, the Minnesota Council for Preventive Medicine, a nonprofit organization of physicians, has the following mission statement:
- To create a network of physicians interested in preventive medicine
- To offer expertise in preventive medicine to interested individuals, organizations, learning institutions, and media
- To influence public policy toward the prevention of physical and mental illness and injury
- To support and promote specific initiatives that seek to prevent illness and injury
How to assess the payday loan time gap
Posted by admin in loans guide, making money, merger, money guide, money issues on April 26, 2010
To assess the gap between where the organization wants to be and what it currently can produce, I use the organizational process model shown in Figure 21. This tool helps me view the organization at the macro level and allows me to see at a glance what the organization is accomplishing from a task perspective. It helps indicate whether the work being done is consistent with the organization’s vision and mission.
Moreover, the model identifies any gaps between present processes and future plans. A credit card company I worked with had its genesis in the postwar boom of the 1950s and 1960s, enabling millions of consumers to buy electrical appliances. Although this company had been very successful for decades, competition for market share of appliances increased as the market became saturated. In addition, the spread of other credit resources began to squeeze this company’s profits. Soon the company was expanding into other kinds of businesses including dealer financing, retail space design, inventory financing, and even the financing of capital improvements for dealers. Each area now competed for the resources of the original credit card business, and the company found itself spread too thin. Divisions competed against each other for personnel and budget. And as the top leadership increasingly abandoned initiatives that didn’t produce short-term profits, the whole company’s morale spiraled downward.
Multiple loans as integrated units
Posted by admin in credit score, economy, finances, financial guide, get out of debt on March 24, 2010
In the early 1900s, American engineer and efficiency expert Frederick W. Taylor experimented with methods of improving work processes, including the use of quantitative measurement, to increase production. The goal was to make these processes more efficient by simplifying the work, thereby reducing labor costs. The presumption was that since the task was simpler, employers could use cheaper, less educated, less skilled workers.
What resulted in many organizations was a workforce that functioned not as integrated units benefiting the whole but as separate units focused on their own existence. The engineers ignored what they couldn’t measure. They could measure the material realm: product quality, levels of service, production and sales activity, and even profit.What they couldn’t measure was the ethereal realm: the vision, values, ethics, and culture. In this case, engineering didn’t guarantee anything but successful engineering. What Taylor did, in effect, was cut workers off from the ethereal qualities of their work by focusing their contribution on the task. This explains why assembly-line workers frequently describe their work as mindless and soulless. Today’s organizations are going to have to unlearn some of Taylor’s lessons since the new economy will have little to do with putting widgets together. Technology is reducing the role of manual labor by automating much of it with robotics. To accomplish the organization’s vision, employees operating in the new economy will need a holistic understanding of the business in partnership with other stakeholders.
Common pitfalls of payday loan relief
Posted by admin in money management, money tips, payday loans, personal finances, pricing policy on March 17, 2010
Certain business owners will not receive full advantage from taper relief due to lack of planning and proper advice. Some of the more common
pitfalls are as follows:
Failing to qualify as a trading company. This can arise because the company owns too high a proportion of its total assets in investments not related to its trading activities, or has minority investments in other companies.
Unwittingly restarting the taper relief clock. This can arise, for example, where shares are transferred to business associates shortly before the sale of the business to reflect previously agreed shareholding that have not been formally documented, resulting in the taper relief being recalculated from the date of transfer and a resultant loss of the tax benefit for the transferees. Or, if an owner gives away shares or other assets (by putting them into a trust for his children, for example) the clock starts ticking again from the date of the gift.
Where the shares sold are those of a subsidiary owned by a holding company, the holding company’s trading company status (and its eligibility to business asset taper relief) can be lost if there are other subsidiaries in the group that are not trading companies.
Where business assets attract both non-business and business taper relief it will take ten years of the qualifying holding period (under current taxation rules) to achieve an effective tax rate of 10%, and not two years as for business asset taper relief.
The important terms of debt relief
Posted by admin in investment opportunities, investments, loans, loans guide, making money on March 3, 2010
The IR loves technical terms and the important ones to understand in taper relief are as follows:
‘Qualifying holding period’. The percentage of gain chargeable depends on ‘the number of whole years’ in the qualifying holding period, which is simply the relevant period that the asset was owned by the seller. (Note that where an asset is acquired through an option, the qualifying holding period is deemed to be from the exercise of the option and not from the grant or acquisition of the option.)
‘Business asset’. Any asset may be a business asset if it is used for the purposes of trade, profession or vocation or employment and if certain conditions are met. The holding of shares is a business asset where the company concerned is a qualifying company.
‘Qualifying company’. A qualifying company is a trading company, or the subsidiary or the holding company of a trading company, where the relevant individual can exercise at least 25% of the voting rights in that company; or if it is a trading company and the individual owns at least 5% of the shares in the company and is working fulltime in the company. Difficulties can arise where the holding company has more than one subsidiary, some of which are not trading companies.
Trade’ and ‘trading company’. Trade is deemed to be anything that is considered by the IR as trade for the purpose of income tax, and a trading company is a company wholly engaged in trade. (Note that there can be practical difficulties in this definition for some private business owners.)
Estimates and analysis of loans
Posted by admin in bonds, business, business competition, business objectives, business tips on February 25, 2010
People from departments, branches, or any other unit can combine their estimates and analyze their group rating. Some may see themselves as being close to the future orientation end of the spectrum; others may see themselves at the opposite end. Assessing each department using a graph like the one in Exercise 11 should help identify prospective areas where readiness for partnering activities is evident—and indicate where more developmental activities are needed before the decision to create a partnership is made.
Articulating a vision that is consistent with the leadership’s actions and cultural readiness can motivate everyone to participate in its implementation. Goals such as sales targets, revenue growth, and market penetration are strategic directions that organizations should address in their mission statements. But without a vision to channel the ethereal energies of each participant, such goals alone are not compelling enough to break through to the creative zone.
Gathering your resources to fight debt issues
Posted by admin in credit score, economy, finances, financial guide, get out of debt on February 17, 2010
Reliefs come in various forms. Some defer charges, whilst others reduce the amount of tax before taper relief is applied. Some are allowed automatically, whilst others have to be claimed before the IR will allow them. The more important reliefs as far as business owners are concerned are as follows:
Rollover relief. (also sometimes called holdover relief) Rollover relief allows gains on disposal of business assets (excluding shares) to be deferred if you purchase replacement business assets with the proceeds. ‘Share for share’ exchanges can be eligible for holdover relief, which results in the CGT being deferred until the second parcel of shares is sold.
Retirement relief. This relief was phased out in April 2003.
Special investments. If you dispose of shares in a business in which you were either receiving the Enterprise Investment Scheme income tax relief, or which is a nominated Venture Capital Trust, your gains are exempt if you meet certain qualifying conditions.
Business transfer relief. Where you transfer a business you own to a company you own in exchange for shares, your gains are deferred until you sell the shares.
Gifts hold over relief. This relief allows gains to be deferred when certain assets are given away or sold at less than arm’s length value. An example of this would be a sale to a family member at less than fair market value.
How can you deduce a loan from your taxes
Posted by admin in bonds, business, business competition, business objectives, business tips on February 3, 2010
The costs of acquisition, enhancement and disposal of an asset can be deducted from the gain. Also, the cost of defending your right to ownership of the asset can be deducted, whilst the normal cost of repairs and maintenance and interest payments cannot. Special rules apply to the costs of ‘wasting assets’ (which are defined as assets which had a predictable life of less than 50 years when acquired).
Acquisition costs are defined as being costs wholly and exclusively incurred in acquiring the asset. Where the asset is business goodwill, any capital costs expressly incurred wholly and exclusively in creating the asset can be deducted. Enhancement costs are those costs wholly and exclusively incurred to enhance the asset as long as the costs are still reflected in the nature of the asset at the date of sale.
Incidental costs include costs of transfer or conveyance; and fees, commissions and remuneration for professional advice.
Controlling credit costs
Posted by admin in bonds, CEO, financial guide, loans, money issues, revenue, shares on October 26, 2009
Focus on major items of expenditure. Costs should be categorised as major or peripheral items. Undue emphasis is often given to the 80% of activities accounting for 20% of costs, rather than focusing on the priorities:
The activities generating the majority of costs. Reduce costs through cost awareness. While focusing on major items of expenditure, it may also be possible to reduce the overall level of cost of peripheral items. Costs can be reduced over the medium to long term by influencing people’s attitudes towards cost and wastage. In particular, examine managers’ attitudes to cost control and reduction and the effects of expenses on cash flow and profitability.
Maintain a balance between costs and quality. Commercial management and cost control mean getting the best value possible. This requires a balance between price paid and quality received.
Break-even credit analysis (cost-volume-profit or CPV analysis)
Posted by admin in bonds, business, cash reserves, CEO, finances, financial guide, making money, merger, pricing policy, revenue on October 23, 2009
Knowing when a project or new business will break even is important in any decision to invest money, time and resources in it. Break-even point is when sales cover costs, where neither a profit nor a loss results. It is calculated by dividing the costs of the project by the gross profit at specific dates, making an allowance for overhead costs. Break-even analysis is used to decide whether to continue development of a product, alter the price, or provide or adjust a discount, or whether to change suppliers in order to reduce costs. It also helps with managing the sales mix, cost structure and production capacity, as well as forecasting and budgeting.
For break-even analysis to be reliable, the sales price per unit should be constant, as should the sales mix, and stock levels should not vary significantly.