Jump-Starting Your Personal Finance - Achieving Higher Rates of Return

For many people, it is usually after years of not paying much attention to how they handle money, or after taking bad advice from others they've trusted (including professionals), that they finally realize: "Hey, this is my money and no one really cares more about it than I do. And it will not multiply unless I do something about it". At this point, the path you take can have long-term effects. Let me bring a few important points to your attention to help you on your journey.

Higher Rates of Return

When you finally come to the realization that you need to take a more active role in handling you personal finance there is a natural tendency to look to the stock market. That's usually because stock in a company is one of the easiest securities to acquire. There is also a sense of excitement or prestige with being in the stock market. However, lets put the emotions aside and look at what the real issues are.

One thing you must consider, especially when starting out is the return on investment. The stock market historically gives 7-10% annually. This is not a bad return if you are looking to park a huge amount of cash (say a few hundred thousand and up). But if you are starting out with not much excess cash, you need to get higher rates of return. If you have $5000 and you invest that at a rate of 10% a year, in 5 years you will have about $8000. That is not fast enough if you really want to take control of your personal finances. You will need to learn how to get higher rates of return than that. Remember the higher your rate the less time it takes for your money to multiply.

Assessing Your Options

The question then becomes how can you achieve higher rates of return. Many, at this point tend to gravitate towards using aggressive stock strategies or short-term trading to get higher rates of return. This could take years and many dollars (both in the cost of educating yourself and bad trades) to learn how to do and the probability of success is not very high. But if you are just starting out you don't have that kind of money to loose. Your best alternative for higher rates of return is to start a business that meets certain criteria.

The kind of business you want to start is one with low startup cost and high profit potential. Yes, it does take more effort to manage than a passive instrument such as stocks. But this is where you have a higher probability of getting returns that are in the 100% per year range, and even higher if you play your cards right. And these returns can be much more consistent than with stocks. Here are some other points to consider about starting your business for higher rates of return:

1. No longer is the option of starting your business limited to huge upfront investments (such as buying a franchise). Today it is possible to start businesses with very little money and have high profit margins.

2. The time requirement need not be prohibitive. Many successful businesses are started part-time buy full time employees. Also, depending on the kind of business you start, the internet can help to make it easier to manage.

3. You have more control of your investment. Once you place your money into a stock you have no control over what the price of that stock will be. With your own business, you control it. And there are many resources to help business owners.

4. The long-term prospects of starting your own business are good. You may not hit a home run on your first try (although that has been done before, and is far more likely than making a million on the first stock you pick) but if you keep at it you will improve and so will your personal finances.

Remember to approach your business like an investment. Learn how much is required to start, the expected rate of return, when you expect to make your money back etc. Even if you do decide to take a more active path in the stock market (i.e., trading stocks), take the time to learn how it is done before risking your hard earned money.

To your success.

Rodger Campbell is an entrepreneur and writes on various topics including personal finance and investing. For more insights similar to the article you just read, go to PersonalFinanceBuzz.com [http://www.personalfinancebuzz.com]

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

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Jump-Starting Your Personal Finance - Achieving Higher Rates of Return
by Rodger Campbell

How the GFC pushed businesses to the wall

Chalpat Sonti
October 22, 2010

Just how badly, or well, businesses survived the global financial crisis and other economic turmoil of the past two years is evident from new official figures.

Australian Bureau of Statistics data shows in the two years from June 2007 - encompassing the boom and subsequent bust - more than half a million Australian businesses shut up shop.

Nationwide,there was a 73.6 per cent survival rate in the two years, with the number of businesses falling from 2.07 million to 1.52 million.

In Western Australia, about 57,000 businesses, including 10,100 new businesses, were forced to the wall.

That is an attrition rate of 28.3 per cent of all new businesses in the period, but the figures also tell a tale of two distinct years.

In June 2007, there were 211,000 businesses with an ABN and registered for GST in the state. One year later, just before the economy headed south, that had dropped to about 178,000.

A further year on, the number was about 154,000, an overall survival rate of 73.1 per cent.

The public administration and safety sector was the worst performer, with a survival rate of 65.3 per cent. The mining industry saw a 76.5 per cent survival rate, while health care and social assistance did best, at 81.2 per cent.

The number of small businesses (up to 20 employees) fell 24,931 nationally in the period, with more than 80 per cent of the fall occurring during the worst of the financial crisis, in 2008-09.

Most of the fall was in businesses employing between one and four people.

But federal shadow parliamentary secretary for small business Scott Ryan said the national drop in small business numbers was worrying on other future fronts.

"Small business is the economy's canary, a key leading indicator," Mr Ryan said.

"The (federal) Labor government's stubborn intention to saddle small business with extra costs such as the superannuation levy increase and the paperwork burden of being a 'pay clerk' for (a) flawed parental scheme will only ensure this worrying trend worsens in coming years."

Meanwhile shadow small business minister Bruce Billson has confirmed his intention to introduce a private members bill which would see Centrelink take over the running of the government's proposed parental leave scheme.

As it stands, Centrelink will fulfil that role for the first six months of the scheme, before the responsibility for much of the scheme falls to employers.

They will be required to distribute the payments under the scheme to staff, after being forwarded the money by Centrelink.

"Despite strong objection from every corner of this continent, from Gladstone to Esperance and from every organisation that has any concern whatsoever about the compliance and red tape obligations on businesses large and small, the government seems to steadfastly want to persist in imposing this pay clerk obligation... on employers, despite the fact that it has offered no compelling reason for doing so," Mr Billson told Parliament on Wednesday night.

He will need the support of independents or the Greens to make the changes to the scheme, due to start at the beginning of next year.

It will see eligible parents receive the minimum wage ($569.90 a week) for 18 weeks.


http://www.smh.com.au/small-business/how-the-gfc-pushed-businesses-to-the-wall-20101022-16wrx.html

Compete with the big fish: insider secrets for upstarts and underdogs

DAVID WILSON
June 29, 2010 - 1:31PM



Even if you operate on the back of a broadband connection, you can still take on the big fish.
Statistics are a stark reminder of just how hard it is to keep a business afloat.

Forty-two per cent fail in the first four years, according to the Australian Bureau of Statistics. So, for a small business, competing with the big fish may seem like mission impossible.

But underdog status has its virtues. For one thing, fair go-fixated Aussies love underdogs. For another, in accordance with Hollywood scripts, upstarts do over-deliver - look no farther than the feats of New Zealand's world cup "All Whites" and Ghana's "Black Stars".

If you think that the two teams just got lucky, take a look at a selection of nitty-gritty tips on how to raise your game. Even if you run your business from a box room on the back of a broadband connection, with rigour and guile you could still make a splash, and become a "challenger brand".

So, read on, have a go. And never forget how lucky you are to be free from all those big company expenses: comfy office chairs, bonuses, pensions, plus - worst of all - salaries for staff who refuse to retire but effectively quit long ago.

How to punch above your weight: six secrets


1. Focus on focus

According to the director of new ventures incubator Pollenizer, Mick Liubinskas, to compete with big business you must tackle one area: the threat of dilution. In his view, the secret of building a business with heft is focus. A giant rival may beat you on scope, but, if you focus, it cannot match your ability to get things done.

Keep products simple. A lean and focused operation puts you in a position to thrive. According to Liubinskas, a plus of a focused approach is that you become easier to buy.

2. Come clean

Irrespective of any hopes you harbour about being bought out, resist the temptation to exaggerate your size. Be honest, says strategist Barry Maher, because Milly's Carpet Cleaning can be just as effective as a conglomerate claiming to be "agile, personal, friendly, service-oriented": classic small business traits. According to Maher, you can tackle whatever job comes up if you have a network of associates ready to act fast and flexibly address clients' needs.

Lower overheads help keep prices down.

3. Get a go-to guy

Forget about trying to generate mass publicity the way giants do.

Instead, Maher suggests, think local. Enlist the face of your firm to act as the neighbourhood go-to guy or gal for the press. Build local prominence on search engines and in social media.

4. Practise rapid reaction

However prominent you get, you must act fast. According to business coach Robert Gerrish, the ability to get on the case without bureaucratic obstruction is a key edge. Use it, Gerrish urges. Follow through. Do not let emails fester, as corporations do. "We can be responsive and we can be personal and jump on things that we feel are priorities," he says.

5. Express and experiment

Image now is about much more than clothes, Gerrish says, adding that your website must express your identity. Go for depth and integrity.

In the 'about us' section, where many businesses plonk stock shots of a spectrum of smiling models, describe your people and history. Be a "real" company instead of a big one, and innovate. Try new tools.

Gerrish highlights the presentational impact that an iPad can make.

6. Log off

Reduce your reliance on the internet. Instead of playing five or six rounds of email tennis, pick up the phone, Gerrish says. Suggest meeting for coffee, he adds, stressing the need to be touchy-feely, which banks have grasped. After focusing on online branding, banks are opening more strip shop branches, it seems. The reason: customers want old-school conversations - a good yak.


Source: theage.com.au

Not suitable for work: why businesses fail

Not suitable for work: why businesses fail
DAVID WILSON
May 13, 2010

Many small business owners struggle finding the right staff, says start-up strategist Jack Garson.

Everyone bungles sometimes. If you are lucky, you only make a few trivial mistakes that can easily be fixed, enabling you to regroup fast.

If not, especially in a volatile post-downturn economy, your small business might wind up in the crowded enterprise graveyard. The number that fail is pegged at between 50 and 80 per cent: proof how easy it is to lose direction, if any existed in the first place.

Often, entrepreneurs launch start-ups on a gut instinct basis, without gauging the market. Only after investing, do they realise the gravity of the mistake. Then, if the venture limps on, there are plenty more to make.

Learn about the worst and how to correct them. A cohort of experts sheds some light.

Six critical small business blunders and how to fix them

1. Blind hiring

Misfire: Assuming they are smart enough to delegate in the first place, many small business owners have trouble hiring the right person for the right role, says start-up strategist Jack Garson. Over-confident about their interviewing skills, they are disappointed by the result.

Fix: First, establish what traits beyond experience, training, and enthusiasm the role demands. Also grasp how the applicant will perform in the position - if you like with the help the Predictive Index (www.predictiveresults.com), which Garson claims raises the successful hiring ratio from 33 per cent to over 90 per cent: "a critical improvement for any company - small or large".

2. Fuzzy logic

Misfire: A fuzzy partnership can be disastrous, according to legal analyst Kim Wright (www.cuttingedgelaw.com). Wright has witnessed many entrepreneurs choose partners circumstantially then fail to hammer out an agreement. Both sides invest heavily. Then, pushed by pressure, they focus purely on work. When an issue emerges, stress and resentment kick in: "Both names are on the website and they can't sit in a room together," Wright says.

Fix: Knuckle down - nut out a set of agreements that factors in how conflicts will be resolved.

3. Slack attack

Misfire: The worst mistake is to get comfortable and coast along on cruise control, failing to challenge or continuously analyse each department, says business coach Chris Chapman.

Fix: Recruit web-based tools - for instance social networking platforms like LinkedIn. Free or cheap, they are easy to use with strong return on investment. No MBA or IT department needed.

4. Me me me

Misfire: "By far, the biggest small business mistake I see is that too frequently owners focus on what they do, what they want to do, why they're so great at what they do," says consultant Barry Maher (www.barrymaher.com).

Fix: "The way to fix this is every bit as obvious as the problem," Maher says. Businesses must become "customer-centric", focusing on the customer. "It's not about you. It's about them."

5. Marketing phobia

Misfire: Marketing is the Achilles heel of small businesses, according to business launch expert Karin Abarbanel (www.birthingtheelephant.com). Based on her interviews with entrepreneurs across a range of businesses, Abarbanel concludes that the worst mistake small business owners make is undervaluing marketing. "They take a 'build it and they will come' attitude that can seriously hamper their chances of success."

Fix: The thrust is to redefine marketing. Think of it as sharing your passion rather than selling.

6. Feast or famine

Misfire: Failure to "manage the pipeline" is the cardinal sin, according to project management expert Martin VanDerSchouw - a member of the US President's Business Advisory Council. "Many small business leaders get so wrapped up in trying to keep the business afloat today, they fail to think about tomorrow. In a tight economy, these pressures get even greater."

Fix: Look ahead. Spend an hour a day managing the business three to six months down the track.

Source: theage.com.au

Failure: The Secret to Success

Business failures could be avoided

Business failures could be avoided

Hundreds of small businesses failures in the first quarter could have been avoided if owners had not ignored early warning signs and used a '33 week window' to save their venture according to research.

By Roland Gribben Last Updated: 9:37PM BST 06 Apr 2009


An estimated 880 small companies, accounting for one in six of insolvencies in the period, closed their doors because they had not taken remedial action early enough or failed to carry out any forecasting, the report adds.

Business adviser Tenon Recovery, which used its own client base for the research, estimates that a company has 33 weeks to discover whether turnaround initiatives could work after determining that future prospects are bleak. (i.e. half a year)

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The remedies include

1. establishing key business indicators,
2. forecasting cash needs on a weekly basis,
3. outsourcing specialist jobs like bookkeeping,
4. reviewing and swapping suppliers, and
5. continuous spending reviews.

Carl Jackson, head of Tenon Recovery, said many enrepreneurs "have little or no experience of operating in a recession and... are not used to having to keep such a close eye on their business".


http://www.telegraph.co.uk/finance/yourbusiness/5116161/Business-failures-could-be-avoided.html