Category Archives: Money

Pros and cons of a joint venture

 

Sometimes two heads are better than one. Collaborating with other businesses could make your business grow faster and expand your knowledge and resources. Joint ventures help the business owners grow in the areas where they lack expertise and skills. And both companies will be able to share financial burdens. If the two companies work together well it could be a win-win situation where both companies gain.

Here’s what you need to know about starting a joint venture.

New sets of skills and resources

A joint venture has many advantages and one of them is that your business will be able to learn and gain a new set of skills and resources by partnering with another business. And you won’t have to put down an investment to acquire these skills. Your business might be lacking on skills and by the end of the joint venture, your might gain new knowledge which helps your business to be more fruitful. For example, a wedding events company can collaborate with a highly skilled photographer. They both benefit from each other because they offer different traits to the partnership.

Limits risk

When a business decides to take on a new project it will always be a risk. The project can either be successful or fail. When a business joins with another business for a certain project, the risk is shared between the two parties. This limits the liabilities of both parties involved in the business venture. For example, Agriculture is best suited to a joint venture because the equipment, land and the supplies are extremely expensive. And it can be difficult to get agricultural finance. If farmers collaborate with other farmers, then their expenses will be shared. Farmers could share their equipment and be able to cut down on costs.

New markets

You’ll be exposed to a new demographic When your business partners up with others, it will automatically be exposed to a whole new set of customers. The goal of a business is always to grow, evolve and gain new market share. Partnering up with other people can help your business expand because you’ll gain access to their customers whom you wouldn’t have normally been able to reach.  For example, in the 90s Nike partnered with Michael Jordan a famous basketball player and made millions. Avid fans of Michael Jordan began to buy the Iconic Jordan sneaker and Nike sales went through the roof because of the joint venture with Michael Jordan. Acquiring a partner in the business realm can help you reach higher targets and give exposure to your product. Just make sure the person you’re partnering with has a clean reputation because they will represent your company. Whatever they do will have an impact on your business. You should avoid doing business with a partner you don’t trust.

Versatility

A joint venture is flexible and versatile because you’ll be able to establish the timeframe in which you want the venture to last. It can be a short-term agreement or it can be long-term. The venture can be finished once the goal has been reached.  

Cons

Different managing styles

Your business might have a certain culture and way of managing things which clash with the other party. If your styles clash then your joint venture might not work out and could fail.

Shared risks

A partnership will always be a risk. Some partnerships soar and do well, while others bust and fail. There are many reasons why joint ventures fail and one of them may be that one party contributes more to the venture whether its skills or resources. This could cause disagreements and the joint venture to fail. There should always be an equal balance of contributions or the party contributing more might feel cheated.

Written agreements

Misunderstanding and miscommunication can break down trust and cause conflict. Make sure you don’t just end with an oral agreements but everything should be written down. Taking a person’s word and leaving it at that could cause conflict at a later stage. Make sure all the responsibilities of each party are outlined and everything is in writing. This will also solve any costly misunderstanding which might occur down the line and break down the partnership.

A business should always be looking for ways to do things which can make them be more efficient and effective. Joint ventures provide the perfect platform to gain skills, knowledge and expertise which your business may lack. If you want to start a business venture, you need to find other people who want to reach a similar goal to yours. You need to make sure they are trustworthy,reliable and they are financially secure. Importantly, you must ensure they have a good reputation and image.

 

 

Should you really be an entrepreneur

Many people jump on the entrepreneurship bandwagon because they think they’ll be instant millionaires and get cushy working hours. But if you become an entrepreneur for the wrong reasons, you’re bound to fail. Starting your own business is hard work and requires guts and making sacrifices. If you’re not willing to understand the markets, have the courage to execute ideas and take risks, you could lose a lot of money as well as your business.

Here are a few ways to help you decide if entrepreneurship is for you.

Talk is cheap

Actions speak louder than words. If you’re a person who’s always focused on “someday” and can’t take initiative, entrepreneurship might not be for you. Entrepreneurs are go-getters who are always doing. They are determined to see their dreams come true.

When the going gets tough

Muhammed Ali, the champion boxer, was quoted as saying, “I hated every minute of training, but I said don’t quit. Suffer now and live the rest of your life as a champion.” And that’s how entrepreneurs should approach every difficulty they come across. If you quit easily, then you’ll fail as an entrepreneur. Because in business it’s not a matter of if the obstacles will come but when they come. Will you be able to take the heat?

Fearless

Starting a business requires a person who can take initiative and is courageous. You’re going to face a lot of situations which require you to take a leap of faith. And if you’re not brave enough, you’ll miss out on many business opportunities.

Overnight success

Many people think they’ll start raking in the millions in the first year. But the climb to success isn’t easy and will require a lot of work. As an entrepreneur, you may not see the fruits of your labour until a later stage. Entrepreneurs have to know, in order to get a breakthrough in their business, they need to be persistent and motivated.

Lonely at the top

When you’re the CEO of a business, you’re the one in charge You’re the one who has the final say and the one who is the most invested in your business. So you may find it lonely because no one in the company truly understands the pressures you face. There are few people to share in your failures and to motivate you to get up when you’re down. Being your own boss and working for someone else is very different, as an entrepreneur your business is constantly on your mind.

Focus

You might think your idea is unique, mind-blowing and everyone will be queueing to get their hands on it. But not everyone will buy into it. However, you shouldn’t let this deter you. Colonel Sanders who started Kentucky Fried Chicken was rejected 1009 times before he found someone who believed in his recipe.  In the beginning, some people may not be on board to help you fulfill your vision. And that’s why you should be determined and focused.

Preparation

Luck is when opportunity meets preparation. You have to be ready at all times and have your ducks in a row, otherwise, you could lose out on great business deals. If you aren’t prepared to spend hours studying your industry and looking for other ways to serve your customers, then being an entrepreneur might not be for you.

Capital

Whether you need funds to finance your mining equipment or invest in new property for your business, you need to find clever ways to raise money. You might have to get a business partner or explore crowd-funding. Whatever route you choose to take, it’ll take a lot of hustling to get your capital. And the question is: are you up for it?

Time

Many people have a preconception that they’ll spend their days clocking off at noon to play golf because they have flexible working hours. But the truth is, being an entrepreneur means you’ll have to work harder than anyone in your office. In fact, you’ll find yourself wearing many hats in order to keep your business thriving. You’ll have to eat and sleep your business and often spend the weekend catching up on work. You may also have to sacrifice time with your friends and family during the initial stages of building your empire.

Listen

If you can’t listen to what others have to say, your business could fail. As a business owner, you’ll come across many unsatisfied customers. And if you want your business to prosper, you’ll have to listen to what they have to say in order to satisfy their needs successfully.

Being an entrepreneur is about more than becoming your own “boss”, it’s about loving what you do and providing a product or service which will benefit your customers.

 

How to market your car for a private sale

It may be about time to sell your car. That TV advert with the sporty new number could have caught your eye, but you’re wondering if you can fit two kids into a two-door sporty number. When you get rid of your old car, you can either trade it in or sell it privately, with the latter netting you more money for the new purchase.

Private car sales can be a nerve-wracking experience. You need to make sure everything is sorted out mechanically, that the car looks great, and it’s clean inside. Otherwise, the buyer is going to try hustle you to bring down the price and you’re not going to get as much money.

Question is, where do you even advertise your car for sale? How do you even get started in private car sales?

Determine what you want for it

The first thing you’ll need to do is figure out just how much your car is worth, how much you still owe on it, and how much you want to make off of the sale. You can go about this by checking a car value calculator (most finance websites have one) and comparing the price of your car to similar models on the internet and in classifieds.

Be aware of how much other people are charging for their cars, what condition they’re in, and more importantly what the mileage is. Of course, you don’t want to undercharge for your classic Chevrolet Impala. Though, why are you even getting rid of it in the first place?

A sign on the car window

The first way to advertise your car is a classic: print out a sign and put it on a rear side window. This is a must if you’re driving through different areas and you’re often in traffic. It’s free exposure for your sale while you go about your daily business or errands.

The sign should have a few key details, such as the make, model, and year, how much you want for the car, and your contact details. If you don’t want someone contacting you at inappropriate hours, then state you only want to chat on WhatsApp or over email.

Auto fairs

The second way to sell your car privately is through weekly or monthly auto fairs. These are gatherings of sellers that drop their car off in a parking lot for prospective buyers to look at. This isn’t free, however, but should cost you no more than the price of a hamburger to have copious amounts of people gawk at your car.

Auto fairs often happen on a Sunday, which means you can drop off the car and go out for the day. Just remember to insure your car as you won’t be present when people are looking at it.

Classifieds websites

Finally, the last way to advertise your car is for sale is through a classifieds website or newspaper. There’s a chance you may have to pay a small fee, but this option is an absolute must. Classifieds don’t usually just advertise cars, but a range of other items and services, which means they draw many eyes.

Classifieds are also easier to list all of the specifications of the car, if it has a service history, your contact details, and anything else you want the buyer to know before hand. You’ll also be able to upload a picture of it. A few examples of classifieds are Gumtree, OLX, and Surf4Cars.

Be safe

When going through the motion of private car sales, always make sure you take safety precautions. You’ll be meeting with strangers who want to purchase a high-value item. To be on the safer side, meet the buyer in a high-traffic area where there are lots of people, take someone else along, and get all of the buyer’s particulars beforehand. That’s not to say anything negative will happen, but it’s best to be safe than sorry.

Things to have ready

Your car is going to need to look its best in order to get the price you want for it, though the buyer may still haggle for it. There are a few things to take note of before meeting prospective buyers:

  • Make sure the car has had a wash and all of the scratches and marks have been buffed out.
  • Clean the inside of the car, removing any sand from your shoes or old takeaway wrappers.
  • The car licence should be up to date.
  • If the car is insured, clearly display the sticker you received from the insurance company.
  • Have the service history book with you.

You should be able to sell your car in no time because cars are generally fast sellers. Be sure to be honest and accurate with information about your car to avoid any unpleasant situations. Good luck with the sale.

The financial goals your business should have

Every business should have financial goals. After all, without them, how will you know where your business is headed? Just like every person should have goals, financial and otherwise, your business should too. And financial goals in particular all have one outcome in mind: financial success. And of course you want that for your business so while these are usually personal goals consider their adaptations for business.

Spend what you have and not more. This is the number one lesson in personal finances. Don’t borrow money to pay your bills, not in your own life and not in business. All this does is result in you always being behind on your bills and never being able to get ahead. Your time will be spent trying to find funding. When that doesn’t work you may have to research how to apply for a personal loan online so you can fund things for a while. There’s far better ways you should be spending your time. You should only borrow money for your business for the biggest expenses – like a bond to house your offices or a loan to move your business forward with clear outcomes and payment terms defined.

Keep your expenses low. When it comes to your personal finances, this speaks to living in a small home and driving an affordable car. In business, this is relevant in many different ways. There’s really no need to have your office in the fanciest part of town. Simplifying simple aspects of the way you do business can have a major impact on your bottom line. And the good news is there’ll be almost no detriment to you or your staff.

Avoid unnecessary expenses. Yes, you want to provide lunch to your workers every day. But you don’t need to buy expensive takeaways daily. Those kinds of costs add up quickly and can lead to you having to retrench staff. And they’d much rather keep their jobs than have burgers or pizza every day.

Increase your business’ net worth. In personal finance, this one is simple. Pay off all your debts and have money saved so you won’t have to work again. Your business works in the same way. Pay off your debts and loans. Turn a profit monthly so you won’t have to worry about covering your expenses. Have money left over at the end of the month so you can pay yourself a salary, share profits with staff and reinvest what’s left over into the business.

Now that you’ve set goals for your business, how about giving your business finances a makeover? Sometimes you feel a little tired and in need of a break, a refresher and new start. This can happen to your business too. If your business is fairly old and has been around for a little while, it could be running automatically. And that’s when you know it might be time to give your finances a makeover. These tips might help to bring some much needed enthusiasm into the finances of your business.

Separate personal from business. This step shouldn’t need to be mentioned. There should be absolutely no overlap between your finances and that of your business. Yes, it’s easy to just reach for the nearest credit card when you’re at the grocery store. But that should never be done. A business bank account is totally essential for responsible management of your businesses finances.

Create a budget for your business. A budget is essential for you to manage your own personal finances. Your business is the same. The reason they’re so ubiquitous is that they work. Make sure to look at your budget constantly and make adjustments. It’s important that you ensure your spending is in line with your budget.

Automate your business expenses. Make sure that all recurring expenses are automated. This could be your rent, salaries, utilities and so much more. This will make your life just that little bit easier every month. As a business owner, you have a lot of balls in the air that you need to juggle. You’ll want to make sure everything possible is automated so they can happen without you even thinking about them.

Pay off debt. Carrying debt is never a good thing, not for you and not for your business. Of course, sometimes it’s necessary. Sometimes you might even need it to grow your business. Make sure you make an effort every month to pay off your debt as quickly as possible so that you avoid paying too much interest.

Keep a close eye on your bank statement. If you don’t keep a close eye on your bank statements, you may miss something important. A missed payment, a scam, a double debit – all of these are possible. The only you’ll know is by spotting it yourself. A good idea is to use your bank statements to compare against your income statement and balance sheet. This’ll enable you to see how your business is progressing and to find any potential problems.

By following these steps, your business finances will soon be refreshed and it’ll be ready to grow. It’s important that you take some time to think about your business and its goals.

What 2016 tells us about financing a business

If we’ve learned anything from 2016, it’s that there’s plenty business can and must do to help protect themselves from events they could not have foreseen. To that end, it’s worth thinking about what we can do, as business people, to help keep our businesses afloat while the world goes on. Businesses won’t stay up because we want them to, but through hard work. We need to be able to handle what occurs and look out for dangers that might threaten their continued existence. Just as we care for any loved one, we must be mindful of what could pose a threat to businesses – 2016 shows us that many of the biggest dangers could come out of left field. To that end, let’s look at ways to protect our businesses from any possible dangers.

Look for bargains

We make our own success, but it also involves knowing where to find opportunities for that success to blossom. One clear way to make success into a reality rather than a dream is to find the best deals and bargains. For example, here is a detailed way one American finance writer managed to get an expensive electric car reduced in price. Instead of spending $35,000 on a brand-new electric car, he got it for under $14,000. Businesses must look at their financing options in terms of the best way to make the most out of a little – or, perhaps, how to get exorbitant prices reduced.

Beware “gurus”

Nobody can predict the future, yet many make their money off selling their beliefs to businesses desperate for a path. These finance gurus tend to offer vague reasons for their predictions, forcing businesses down paths they would otherwise have never gone. Consider some of the worst financial predictions in history, by some of the smartest people in the world. For example, in 2010, entrepreneur Richard Branson warned that “the next five years will see us face another crunch – the oil crunch,” predicting a severe supply shortage. Of course, six years later, the price of oil is actually lower than it was then. Businesses must on the evidence they have, that will benefit themselves and shareholders, not the words of those who claim to have knowledge they could not possibly have. The smartest people in the world did not think Donald Trump would get elected or that Britain would leave the European Union – yet both of these large events occurred and have dramatically changed the landscape. How many businesses were prepared when these events occurred? How many were protected from the financial fallout? For example, did these companies have protection for their immigrant employees? Did they have proper health coverage (the repeal in America of the Affordable Care Act has left millions without healthcare, meaning they might not be able to work – a reduction in people able to suddenly work will have a massive impact on businesses and therefore the economy).

Be creative

Business people must be more creative than ever, as they go forward. It’s using plant and machinery finance in clever ways to create more jobs, services and so on. It’s creating new advertising campaigns, drawing in younger people, getting active on social media. Creativity means standing out from others, an expression of individuality that draws people in so they want to work with us in various capacities. 2016 showed that creativity is key, especially in a world that is increasingly competitive.

Proper hiring and proper management

Our business is only as good as your least talented staff member. Hiring the best people must be at the top of our list of priorities. Businesses are made of teams, so if one person messes up, it falls sideways and upward. That is, it affects everyone, not just the work of the person who made a mistake. Competency must be paid for and rewarded, which means it is on us to treat our staff properly, doing what we can to retain them for as long as possible.

The longer someone works for us the better for everyone, since this establishes a long-standing dynamic that gives a measure of stability to the constant shifting market. For example, we could listen to various studies that indicate working from home has enormous benefits. Not only do people then feel more inclined to work for us, but their work improves, too. If our concern is that people need rigour and micromanagement in order to complete their work, the failure is ours not theirs – we should not be hiring people who can’t work when left by themselves. Otherwise we’re being teachers and watch dogs, not managers focused on production, ideas and so on. Implementing new strategies for the benefit of staff will go a long way to making a business better than it ever could be.

People are always looking for ways to stay employed after all and no one likes the sense of fear, when leaving. There’s no guarantee any job is forever and the lack of job security is one reason people tend to stay in position longer than before – after all, even advanced degrees are not guarantee we’ll be employed. Yet that shouldn’t stop us as business people putting effort into retaining the staff we do have.