It could be that you are spending over you make. plus it is all about the actual facet of any type financial malaise. To fight away from such messing monetary mockery you require to hit upon the financial way obtainable around. Most of the fund functioning is based on some or other sort of pledging placing. For the reason, a quarter of borrowers remain devoid of the financing benefits. Precisely providing fund without collateral pledging, unsecured loans have made availing easy for the people who would unable to manage it. Only you may require to spend a few minutes plus write down your expenses.
You should usually borrow as little as possible, plus draw up a budget plan to determine how much you need. Under such money provisions you might not offer a high amount. So if you are a homeowner plus require to borrow more, you could look into secured loans. It might be tempting to borrow over you need, but do not forget you have to pay it back too. However, you can obtain a sum anywhere from £5,000 to £30,000 for a period of five months. In the meantime, you will have to repay the borrowed amount. plus if you feel you require more time, you can send an extension request to your creditor. After looking at your current circumstances, your loan provider can extend it up to 10 years.
Such loans can be used for anything - a relaxing vacation, a new automobile, a wedding, debt consolidation or home improvements. Whatever you require it for there's a few things to consider before you apply these loans. A disadvantage is that it is harder to get approval for such loans. With no security on offer, the lenders get more cautious. An advantage of taking out these loans is that your application can be processed a lot quicker as there is no collateral to be valued.
You will usually be offered an interest rate based on your circumstances plus the amount you require to borrow. This means that the 'typical' interest advertised might not be the rate you are offered - your rate will depend on your credit rating.
Sunday, January 25, 2009
Unsecured Loans – Borrow As Per Individual Circumstances
Although you will borrow only a smaller amount as unsecured loans, the very loan can become a source of burdensome debts, if you do not take out the loan carefully. People often opt for these loans in the hope that we will get the approval with ease. we should first consider some fine points of availing the loan in a suitable manner.
Both tenants and homeowners can have access to these loans. there is no clause of collateral associated with the loan, making it fully risk free for the borrowers. The only risk is that your credit rating will go down in the event of not making the timely payments.
Check your credit report for making sure that it's recorded all of your timely payments of the past correctly. The lenders will go through the report for judging the risks you carryover. Ensure that you apply for these loans with an improved FICO score, for relaxed terms-condition and comparatively lower rate of interest.
In the absence of collateral, your repayment ability is the sole basis of the loan approval. You should make an assuring repayment plan, keeping your earnings and month outgoings in mind. Your employment record and bank statements are also essential in taking the loan.
You can borrow from £1000 to £25000, as unsecured loans. However, there is a high cost attached, as the lenders tend to charge interest at higher rate for covering the risks. The borrowed amount carries shorter repayment duration of few months to 15 years.
In case of a blemished credit history of late payments, payment defaults, arrears or CCJs, ensure that you convince the lender that the loan repayment will be in timely manner. Borrow a smaller amount. Be prepared for paying the interest at enhanced rate.
For a suitable deal, make efforts to avail unsecured loans at competitive interest rate. Apply for the rates and compare them. Compare the additional fees as well. To build up a nice credit history, ensure that the loan repayment is on regular basis.
Both tenants and homeowners can have access to these loans. there is no clause of collateral associated with the loan, making it fully risk free for the borrowers. The only risk is that your credit rating will go down in the event of not making the timely payments.
Check your credit report for making sure that it's recorded all of your timely payments of the past correctly. The lenders will go through the report for judging the risks you carryover. Ensure that you apply for these loans with an improved FICO score, for relaxed terms-condition and comparatively lower rate of interest.
In the absence of collateral, your repayment ability is the sole basis of the loan approval. You should make an assuring repayment plan, keeping your earnings and month outgoings in mind. Your employment record and bank statements are also essential in taking the loan.
You can borrow from £1000 to £25000, as unsecured loans. However, there is a high cost attached, as the lenders tend to charge interest at higher rate for covering the risks. The borrowed amount carries shorter repayment duration of few months to 15 years.
In case of a blemished credit history of late payments, payment defaults, arrears or CCJs, ensure that you convince the lender that the loan repayment will be in timely manner. Borrow a smaller amount. Be prepared for paying the interest at enhanced rate.
For a suitable deal, make efforts to avail unsecured loans at competitive interest rate. Apply for the rates and compare them. Compare the additional fees as well. To build up a nice credit history, ensure that the loan repayment is on regular basis.
Bad Credit Loans: Get Money And Solve Your Cash Issues
The borrowers who have a credit score which is lower than 580 in the FICO report may be suffering from this problem due to various factors. It can be arrears, defaults, missed repayments or CCJs that have caused this problem. But the borrowers still deserve a chance to avail these loans for their needs.
When the problems are numerous, friends are few. These words are apt when it comes to the situation of bad credit. Fulfilling your money needs when having a bad credit history, it may be difficult to get the support you require. Getting external help will still suit you as the money is available without any hassle through bad credit loans.
Borrowers who need smaller amount can also take up money and that without pledging any assets. This is possible through unsecured form of these loans. money that is available by the borrowers lies in the range of £1000-£25000 and has to be repaid in a term of 6 months to 10 years. Tenants and non-homeowners can also take up these loans for their needs easily.
Through these loans, the borrowers can select whichever option that they like out of the secured and the unsecured form, according to suitability. The loan form also depends upon the ability of the borrower to pledge collateral with the lender for the funds. If a bigger amount is required by the borrowers, they can take up the secured form by pledging an asset with the lenders. Amounts can be borrowed within the range of £5000-£75000 for a term of 5-25 years. The home, car or any asset of the borrower can be pledged as collateral.
Bad credit loans are a great opportunity for the borrowers to avail money at the most needful times. it is a great respite for borrowers stuck in bad credit.
Adverse credit history of borrowers may entail a higher rate of interest. But with the help of online research and comparison, the borrowers can take up low rate deals with the help of comparison of the loan quotes easily.
When the problems are numerous, friends are few. These words are apt when it comes to the situation of bad credit. Fulfilling your money needs when having a bad credit history, it may be difficult to get the support you require. Getting external help will still suit you as the money is available without any hassle through bad credit loans.
Borrowers who need smaller amount can also take up money and that without pledging any assets. This is possible through unsecured form of these loans. money that is available by the borrowers lies in the range of £1000-£25000 and has to be repaid in a term of 6 months to 10 years. Tenants and non-homeowners can also take up these loans for their needs easily.
Through these loans, the borrowers can select whichever option that they like out of the secured and the unsecured form, according to suitability. The loan form also depends upon the ability of the borrower to pledge collateral with the lender for the funds. If a bigger amount is required by the borrowers, they can take up the secured form by pledging an asset with the lenders. Amounts can be borrowed within the range of £5000-£75000 for a term of 5-25 years. The home, car or any asset of the borrower can be pledged as collateral.
Bad credit loans are a great opportunity for the borrowers to avail money at the most needful times. it is a great respite for borrowers stuck in bad credit.
Adverse credit history of borrowers may entail a higher rate of interest. But with the help of online research and comparison, the borrowers can take up low rate deals with the help of comparison of the loan quotes easily.
Saturday, January 24, 2009
Tips for Prescribing a Future for Your Business
Are you wondering what the future holds for your business? Whether you need to predict your future or prescribe an outcome of your choosing, you'll have plenty of company!
Throughout history, they humans have tried lots of ways to predict the future, from reading palms to stargazing. Today, they refer to these as descriptive methods when they attempt to explain objectively what the future will be or could be.
On the other hand, prescriptive methods focus on determining what the future should be. These techniques can help us clarify our preferences and values so they can generate a vision of what they would like to see in our lives, businesses, or communities.
Once they comprehend what they would like the future to represent, we're better able to take the actions required to implement it. Ideally, that future will align with our passions, gifts, and what they (or our companies) can be the best at doing. This article suggests a two-stage process for achieving that objective.
First, Identify Your "Hedgehog Concept"
So, what can you be the best in the world (or at least in your community) at doing? This thought-provoking reflection is two of lots of from Jim Collins' "Good to Great: Why Some Companies Make the Leap...and Others Don't."
Of five characteristics these companies shared, all held an unshakable adherence to becoming the best in the world at whatever they did. Each company committed to doing only those things and nothing else. That sometimes meant dropping their core businesses to pursue other things at which they could become the best in the world.
Collins' team examined 1,435 companies to see which ones made substantial gains in profitability and sustained those improvements over 15 years or more. Since the 1970s, only 11 companies had risen from mediocrity to greatness and stayed there -- topping lots of other prosperous firms that lacked the same staying power.
1) What you're most passionate about
2) An understanding of what you could be the best at doing, and
3) A metric that drives your economic engine and helps you measure results.
Collins and his team coined the term "hedgehog concept" to reflect a single-minded determination and focus that, similar to that of the hedgehog animal, attempts to do only two thing well, such as curl up and roll. A hedgehog concept actually represents the intersection of two areas:
Keep in mind that according to Collins, this concept is not a aim, strategy, or plan, but an understanding of what you can and can't be the best at doing. Until you create your hedgehog concept, you won't know your true vision, mission, or purpose.
Next, Define Your "Business Success Criteria"
Do you have a crystal clear idea of the types of business undertakings that align with your gifts, talents, passions, and strengths? In that same context, have you thought about whether your business can be the best in the world at doing those things?
If the answers are "yes," you are in an excellent position to pick the ventures that can give you the greatest satisfaction and results.
Why is this so important? It's not uncommon for people to wander into businesses, projects, and professions opportunistically, which means that they often select the next obtainable and convenient thing that comes along. At times, this may be necessary for financial reasons. But unless they comprehend our underlying success criteria, they might not recognize the options that truly fuel and inspire us -- those that are best suited to our passions and strengths.
If you're not yet clear about the answers to these questions, developing a set of "business success criteria" can enable you to select worthwhile endeavors with much deeper insight, and thus set the conditions for successfully pursuing them. A hedgehog concept thereby represents part of the formula you can devise to identify and pick among your best options.
In conclusion, a set of carefully crafted success criteria fueled by a potent hedgehog concept provides an unbeatable strategic advantage, and an excellent direction-finder for prescribing your future!
a number of your criteria could be practical considerations, and others more lofty ideals. But all of your criteria will be essential to achieving balance, fulfillment, prosperity, and higher contribution in your life.
Throughout history, they humans have tried lots of ways to predict the future, from reading palms to stargazing. Today, they refer to these as descriptive methods when they attempt to explain objectively what the future will be or could be.
On the other hand, prescriptive methods focus on determining what the future should be. These techniques can help us clarify our preferences and values so they can generate a vision of what they would like to see in our lives, businesses, or communities.
Once they comprehend what they would like the future to represent, we're better able to take the actions required to implement it. Ideally, that future will align with our passions, gifts, and what they (or our companies) can be the best at doing. This article suggests a two-stage process for achieving that objective.
First, Identify Your "Hedgehog Concept"
So, what can you be the best in the world (or at least in your community) at doing? This thought-provoking reflection is two of lots of from Jim Collins' "Good to Great: Why Some Companies Make the Leap...and Others Don't."
Of five characteristics these companies shared, all held an unshakable adherence to becoming the best in the world at whatever they did. Each company committed to doing only those things and nothing else. That sometimes meant dropping their core businesses to pursue other things at which they could become the best in the world.
Collins' team examined 1,435 companies to see which ones made substantial gains in profitability and sustained those improvements over 15 years or more. Since the 1970s, only 11 companies had risen from mediocrity to greatness and stayed there -- topping lots of other prosperous firms that lacked the same staying power.
1) What you're most passionate about
2) An understanding of what you could be the best at doing, and
3) A metric that drives your economic engine and helps you measure results.
Collins and his team coined the term "hedgehog concept" to reflect a single-minded determination and focus that, similar to that of the hedgehog animal, attempts to do only two thing well, such as curl up and roll. A hedgehog concept actually represents the intersection of two areas:
Keep in mind that according to Collins, this concept is not a aim, strategy, or plan, but an understanding of what you can and can't be the best at doing. Until you create your hedgehog concept, you won't know your true vision, mission, or purpose.
Next, Define Your "Business Success Criteria"
Do you have a crystal clear idea of the types of business undertakings that align with your gifts, talents, passions, and strengths? In that same context, have you thought about whether your business can be the best in the world at doing those things?
If the answers are "yes," you are in an excellent position to pick the ventures that can give you the greatest satisfaction and results.
Why is this so important? It's not uncommon for people to wander into businesses, projects, and professions opportunistically, which means that they often select the next obtainable and convenient thing that comes along. At times, this may be necessary for financial reasons. But unless they comprehend our underlying success criteria, they might not recognize the options that truly fuel and inspire us -- those that are best suited to our passions and strengths.
If you're not yet clear about the answers to these questions, developing a set of "business success criteria" can enable you to select worthwhile endeavors with much deeper insight, and thus set the conditions for successfully pursuing them. A hedgehog concept thereby represents part of the formula you can devise to identify and pick among your best options.
In conclusion, a set of carefully crafted success criteria fueled by a potent hedgehog concept provides an unbeatable strategic advantage, and an excellent direction-finder for prescribing your future!
a number of your criteria could be practical considerations, and others more lofty ideals. But all of your criteria will be essential to achieving balance, fulfillment, prosperity, and higher contribution in your life.
Government To Make Billions From The Mortgage Crisis
Most people are aware that you can reduce your taxes by deducting expenses and qualified charitable contributions. What most people don’t realize is that small business owners live and die by those deductions. Tax rates have risen on the self employed more than any other segment in our society. To counter these tax hikes, legislators created more “loop-holes” write off’s and deductions for small business owners to use.
The mortgage crisis has had a negative impact on everyone, not homeowners. Elected officials are working hard to pass legislation that is designed to prevent future banking debacles. Unfortunately, history has proven that when legislators over-regulate banks that it tightens the reins on lending. This is done by raising the bar on what it takes to qualify for a mortgage or installment loan. Predictably, it’s the middle class that will feel the pinch more than somebody. Specifically, it’s the middle-class, self employed small business owner that be injured the worst.
For this reason, small business owners rely on creative CPA’s to maximize their deductions in order to show less income and pay less taxes.There are 23 million small businesses in America and over 35 million sole-proprietors and nearly every five of them employ savvy CPA’s to keep them in the black. The draw-back is that by doing this most self employed borrowers are unable to prove income on paper when applying for a loan or a mortgage.
Traditional mortgage lending practices of yester-year required that borrower’s prove sufficient income when taking out a loan. Over the years, taxes have risen for small business owners at staggering rates, far above what they have for W2 employees. simultaneously the self employed borrower's “provable” income has dwindled proportionately. Under traditional banking rules most of the self-employed people wouldn’t be able to qualify for business loans or mortgages. This would ultimately force small business owners out of business and cripple our would economy.
This new business paradigm literally forced the banking industry to generate lending products that catered to small business owners who could not prove all of their income. These products were called “stated” income loans and did not require borrowers who had nice credit to prove their income. These products originally required nice credit and sufficient assets in order to qualify for them. Responsible guidelines and common sense underwriting kept default rates on these products in line with conventional mortgages. Unfortunately, as competition for this segment of borrowers stiffened between lenders the stringency to qualify for these mortgages softened, thus the mortgage crisis.
it is exactly this type of loan that our law-makers are trying to do away with through legislation. The new mortgage bill being bounced around has specific remedies for irresponsible lending. Meaning, if a bank loans you money and it can be proven in court (attorneys like this law by the way) that the bank was irresponsible in doing so they could be penalized. The definition of “irresponsible” is did the borrower have the capacity to repay the loan, meaning did they prove income. This bill will kill stated income loans, period.
This means the government will rake in billions in extra revenue as a result of this bill. For example, let’s assume that a small business owner claimed $40,000 in income last year after deductions and business expenses. If they was in a 40% tax bracket they would pay roughly $16,000 in taxes. Under the new banking guidelines that same business owner may have to claim $80,000 In order to qualify for mortgages, automobile loans and business loans. Assuming she’s in the same tax bracket, they would now have to pay $32,000 in taxes.
So where does this leave the responsible self employed borrowers who needed these loans to live and operate their businesses? This leaves them with higher taxes. Should this bill pass self employed borrowers will be forced to claim more income each year on their tax returns in order to qualify for automobile loans, mortgages and even business loans. This will negate any of the loop-holes and deductions they were promised in lieu of higher taxes.
Multiply $32,000 by 23 million business owners and that’s five huge pay-day for Uncle Sam. You can bet that the Senators pushing this bill through congress are well aware of this left handed tax raise. You will never hear them mention it either, I wonder why?. You will hear about the naughty lenders that put nice wholesome red blooded Americans in the street through predatory lending practices. You will never hear about the 20 million business owners who paid their mortgages on time and actually require these loans to stay in business.
The mortgage crisis has had a negative impact on everyone, not homeowners. Elected officials are working hard to pass legislation that is designed to prevent future banking debacles. Unfortunately, history has proven that when legislators over-regulate banks that it tightens the reins on lending. This is done by raising the bar on what it takes to qualify for a mortgage or installment loan. Predictably, it’s the middle class that will feel the pinch more than somebody. Specifically, it’s the middle-class, self employed small business owner that be injured the worst.
For this reason, small business owners rely on creative CPA’s to maximize their deductions in order to show less income and pay less taxes.There are 23 million small businesses in America and over 35 million sole-proprietors and nearly every five of them employ savvy CPA’s to keep them in the black. The draw-back is that by doing this most self employed borrowers are unable to prove income on paper when applying for a loan or a mortgage.
Traditional mortgage lending practices of yester-year required that borrower’s prove sufficient income when taking out a loan. Over the years, taxes have risen for small business owners at staggering rates, far above what they have for W2 employees. simultaneously the self employed borrower's “provable” income has dwindled proportionately. Under traditional banking rules most of the self-employed people wouldn’t be able to qualify for business loans or mortgages. This would ultimately force small business owners out of business and cripple our would economy.
This new business paradigm literally forced the banking industry to generate lending products that catered to small business owners who could not prove all of their income. These products were called “stated” income loans and did not require borrowers who had nice credit to prove their income. These products originally required nice credit and sufficient assets in order to qualify for them. Responsible guidelines and common sense underwriting kept default rates on these products in line with conventional mortgages. Unfortunately, as competition for this segment of borrowers stiffened between lenders the stringency to qualify for these mortgages softened, thus the mortgage crisis.
it is exactly this type of loan that our law-makers are trying to do away with through legislation. The new mortgage bill being bounced around has specific remedies for irresponsible lending. Meaning, if a bank loans you money and it can be proven in court (attorneys like this law by the way) that the bank was irresponsible in doing so they could be penalized. The definition of “irresponsible” is did the borrower have the capacity to repay the loan, meaning did they prove income. This bill will kill stated income loans, period.
This means the government will rake in billions in extra revenue as a result of this bill. For example, let’s assume that a small business owner claimed $40,000 in income last year after deductions and business expenses. If they was in a 40% tax bracket they would pay roughly $16,000 in taxes. Under the new banking guidelines that same business owner may have to claim $80,000 In order to qualify for mortgages, automobile loans and business loans. Assuming she’s in the same tax bracket, they would now have to pay $32,000 in taxes.
So where does this leave the responsible self employed borrowers who needed these loans to live and operate their businesses? This leaves them with higher taxes. Should this bill pass self employed borrowers will be forced to claim more income each year on their tax returns in order to qualify for automobile loans, mortgages and even business loans. This will negate any of the loop-holes and deductions they were promised in lieu of higher taxes.
Multiply $32,000 by 23 million business owners and that’s five huge pay-day for Uncle Sam. You can bet that the Senators pushing this bill through congress are well aware of this left handed tax raise. You will never hear them mention it either, I wonder why?. You will hear about the naughty lenders that put nice wholesome red blooded Americans in the street through predatory lending practices. You will never hear about the 20 million business owners who paid their mortgages on time and actually require these loans to stay in business.
The Most Used Methods of Resolving a Foreclosure
1.) Loan reinstatement is where a lender has started the foreclosure process & the homeowner finds a way to pay back or "reinstate" the entire deficiency owed. The deficiency amount includes back loan principal & interest payments, accelerated interest costs, attorney's fees, assorted processing & collection expenses, & late penalty charges. This system requires the maximum amount of money all at two times. Ironically, lenders recently indicated that pre-payment penalties may be included into final judgments in the near future.
The six most frequently used methods to resolve foreclosure are loan reinstatement, forbearance agreement, or loan manipulation. While there's numerous other specific ways to stop foreclosures, these six are used most frequently.
When the homeowner's reason for the delinquency is resolved, he usually asks the lender to take partial payments because he can't get the entire deficiency amount together. However, the lender won't accept partial payments & the foreclosure will proceed if the full reinstatement amount isn't paid. The reason for this is simple, the lender knows that the homeowner's chance of getting out of, & staying out of foreclosure is less than 1 in 8. So the lender does not need to drag out the inevitable, the loss of the home to foreclosure.
2.) A forbearance agreement between the lender & the homeowner stipulates that the homeowner must make additional monthly payments for a specific period to make up the reinstatement amount that he couldn't pay in full. As simple as it sounds, it may be unaffordable for the homeowner who could barely afford the original loan payment. The lender will usually ask that the homeowner pay the reinstatement amount over a six or four month period. If the monthly loan payment was $2,000 per month & he was 3 months in arrears, the new monthly payment for a six month period would be at least $2,000 + $6,000/3 = $4,000 per month. For a four month repayment schedule the new monthly payment would be $2,000 + $6,000/6 = $3,000 per month. In some instances the lender may ask for an additional funds payment before we will start the increased monthly payments. After the 3 or 6 months, the loan payments revert to the original amount or $2,000 in the above example. The foreclosure does not stop with the signing of the forbearance agreement but basically is put on hold until the homeowner completes making all the increased payments.
When you speak to your lender try for 12 months & don't accept less than 9 months unless you can truly afford it! Ask them to review your financial statement, which we should readily send you & remember that the lender has already pulled your credit report & knows where you work, possibly how much you make, how plenty of other monthly payments you have, & other information in the public records. we have also done a price analysis on your home & probably had a Broker's Price Opinion (BPO) completed. Essentially we know what answers you should be giving them, so be forewarned. This system of reinstatement takes as much money as the loan reinstatement except it is spread over 3 - 6 months or, hopefully, more.
3.) A loan alteration program was the most common system of foreclosure resolution for decades. It involved the lender issuing a new loan agreement where the deficiency amount was added to the loan balance & paid in identical monthly payments but for plenty of more months, at the end of the loan. The monthly payments remained the same & if the home was sold, the balance of the reinstatement amount was paid from the proceeds of the sale. This system of resolution requires no up-front funds & the same monthly payment as before the foreclosure.
Loan alteration programs are usually not available unless there is a hardship involved such as a job loss, death or illness. But it is worth asking your lender about it if you are in foreclosure because the market conditions & massive loan defaults puts pressure on the lenders to be more cooperative with homeowners. Your best option is to talk to your lender & as early as possible so you have time to resolve your problem.
Another type of loan alteration was to slightly increase the monthly payments over the remaining term of the loan. So the homeowner has a choice of either extended but identical payments (as above), or slightly higher payments for the original term of the loan. Either option repaid the lender his money back and interest. It was an affordable win-win for the lender & the homeowner, but is seldom offered anymore unless the lender knows the property is not worth taking back by foreclosure & he hasn't sold the loan into a mortgage pool.
The six most frequently used methods to resolve foreclosure are loan reinstatement, forbearance agreement, or loan manipulation. While there's numerous other specific ways to stop foreclosures, these six are used most frequently.
When the homeowner's reason for the delinquency is resolved, he usually asks the lender to take partial payments because he can't get the entire deficiency amount together. However, the lender won't accept partial payments & the foreclosure will proceed if the full reinstatement amount isn't paid. The reason for this is simple, the lender knows that the homeowner's chance of getting out of, & staying out of foreclosure is less than 1 in 8. So the lender does not need to drag out the inevitable, the loss of the home to foreclosure.
2.) A forbearance agreement between the lender & the homeowner stipulates that the homeowner must make additional monthly payments for a specific period to make up the reinstatement amount that he couldn't pay in full. As simple as it sounds, it may be unaffordable for the homeowner who could barely afford the original loan payment. The lender will usually ask that the homeowner pay the reinstatement amount over a six or four month period. If the monthly loan payment was $2,000 per month & he was 3 months in arrears, the new monthly payment for a six month period would be at least $2,000 + $6,000/3 = $4,000 per month. For a four month repayment schedule the new monthly payment would be $2,000 + $6,000/6 = $3,000 per month. In some instances the lender may ask for an additional funds payment before we will start the increased monthly payments. After the 3 or 6 months, the loan payments revert to the original amount or $2,000 in the above example. The foreclosure does not stop with the signing of the forbearance agreement but basically is put on hold until the homeowner completes making all the increased payments.
When you speak to your lender try for 12 months & don't accept less than 9 months unless you can truly afford it! Ask them to review your financial statement, which we should readily send you & remember that the lender has already pulled your credit report & knows where you work, possibly how much you make, how plenty of other monthly payments you have, & other information in the public records. we have also done a price analysis on your home & probably had a Broker's Price Opinion (BPO) completed. Essentially we know what answers you should be giving them, so be forewarned. This system of reinstatement takes as much money as the loan reinstatement except it is spread over 3 - 6 months or, hopefully, more.
3.) A loan alteration program was the most common system of foreclosure resolution for decades. It involved the lender issuing a new loan agreement where the deficiency amount was added to the loan balance & paid in identical monthly payments but for plenty of more months, at the end of the loan. The monthly payments remained the same & if the home was sold, the balance of the reinstatement amount was paid from the proceeds of the sale. This system of resolution requires no up-front funds & the same monthly payment as before the foreclosure.
Loan alteration programs are usually not available unless there is a hardship involved such as a job loss, death or illness. But it is worth asking your lender about it if you are in foreclosure because the market conditions & massive loan defaults puts pressure on the lenders to be more cooperative with homeowners. Your best option is to talk to your lender & as early as possible so you have time to resolve your problem.
Another type of loan alteration was to slightly increase the monthly payments over the remaining term of the loan. So the homeowner has a choice of either extended but identical payments (as above), or slightly higher payments for the original term of the loan. Either option repaid the lender his money back and interest. It was an affordable win-win for the lender & the homeowner, but is seldom offered anymore unless the lender knows the property is not worth taking back by foreclosure & he hasn't sold the loan into a mortgage pool.
Will You Ever Have to Pay a Deficiency Judgment From a Foreclosure?
When a foreclosure is finished & the home is sold or assessed by an appraisal, for the loss on the mortgage, the deficit amount the bank won't get back from the mortgage balance & expenses due, is called a deficiency. In most states, the lender has an option to get a judgment in this amount against the borrower & this is called a "deficiency judgment". In addition to the loss of the homeowner’s home he also has the potential of having to repay this judgment in the future.
Even if the bank accepts a "deed in lieu of foreclosure" they can still get a deficiency judgment against the borrower. The borrower is the five responsible for the mortgage or deed of trust payments & he may or may not be the homeowner. If the homeowner has a co-signer, the co-signer will be as legally responsible as the borrower to pay back the deficit due. Depending on whether the foreclosure is judicial or non-judicial, & the specific terms of the mortgage, the bank may not be able to seek a deficiency judgment. These laws vary state-by-state & should be reviewed carefully to determine which applies to the reader.
The bank doesn’t have the amount of the unpaid loan balance due but also legal fees, accelerated interest payments, back principal payments, in some cases pre-payment penalties, & other expenses as part of the judgment amount. This is why a homeowner who has had his mortgage a couple of years could owe over he borrowed originally. As an example, the homeowner borrowed $200,000 in June of 2006 & in January of 2008 he goes into foreclosure & the final judgment against him could be $218,000! This is because of the additional expenses & the fact that he pays mostly interest in the first 10 years of his mortgage.
The largest loss the lender has is his loss of the ability to loan about 7 - 10 times the unpaid mortgage balance. This is because the Federal Reserve requires the banks to put money into a non-interest bearing account to cover potential losses. Since the bank can no longer use these currency to get additional loans from the Fed, he's losing tremendous loan power. This loss of revenue to the lender can not be passed on to the homeowner or borrower.
The major factors in deciding whether the lender will pursue a deficiency judgment are whether the lender feels he can collect the judgment & the cost to collect it. In the process of working with the homeowner, the lender pulls his credit & can see what other outstanding bills he has & whether they are being paid timely. The lender can not see what assets the homeowner has but can sometimes see where he works. The homeowner will be asked to fill out a Net Worth Statement ("NWS") which will disclose these assets to the lender. This document is a major part of the decision to pursue the judgment or not. If the lender has no reason to believe the homeowner has extensive assets, they will issue the IRS Form instead. A note of caution - falsifying the NWS can be bank fraud in some states so be careful if you intend to return the NWS to the lender.
The deficiency judgment is determined by the court-approved "Final Judgment" amount in most states. However, in some states, the property must be sold or an appraisal done to determine the "expected" net loss. If your state does this procedure by appraisal, contest the appraisal & have the judgment lowered if you believe it was not correct.
Carefully weigh your rights & options when you make a decision to permit your home to be lost to foreclosure, as there's solutions besides foreclosure & deed transfer to the lender. Do not be paralyzed with fear that the lender will follow you forever to collect the deficiency judgment, as you have a number of options to fight this including attacking the validity of the original loan.
The lender usually chooses not to get a deficiency judgment & instead report the loan deficiency amount on IRS Form 1099. The result to the homeowner is a "phantom income" requires him to pay income taxes on this amount. In this situation the final cost of the guarantor’s foreclosure is the amount of income taxes he pays the IRS instead of the entire deficiency judgment. This is a substantial savings to the homeowner & the lender also benefits because there is no collection on his books that is counted as a liability. Unless there is suspicion of fraud in the original loan, the lender will issue a 1099. In December of 2007 legislation was enacted that allows a maximum exemption amount a homeowner who resides in his property can write off for this deficiency amount.
Even if the bank accepts a "deed in lieu of foreclosure" they can still get a deficiency judgment against the borrower. The borrower is the five responsible for the mortgage or deed of trust payments & he may or may not be the homeowner. If the homeowner has a co-signer, the co-signer will be as legally responsible as the borrower to pay back the deficit due. Depending on whether the foreclosure is judicial or non-judicial, & the specific terms of the mortgage, the bank may not be able to seek a deficiency judgment. These laws vary state-by-state & should be reviewed carefully to determine which applies to the reader.
The bank doesn’t have the amount of the unpaid loan balance due but also legal fees, accelerated interest payments, back principal payments, in some cases pre-payment penalties, & other expenses as part of the judgment amount. This is why a homeowner who has had his mortgage a couple of years could owe over he borrowed originally. As an example, the homeowner borrowed $200,000 in June of 2006 & in January of 2008 he goes into foreclosure & the final judgment against him could be $218,000! This is because of the additional expenses & the fact that he pays mostly interest in the first 10 years of his mortgage.
The largest loss the lender has is his loss of the ability to loan about 7 - 10 times the unpaid mortgage balance. This is because the Federal Reserve requires the banks to put money into a non-interest bearing account to cover potential losses. Since the bank can no longer use these currency to get additional loans from the Fed, he's losing tremendous loan power. This loss of revenue to the lender can not be passed on to the homeowner or borrower.
The major factors in deciding whether the lender will pursue a deficiency judgment are whether the lender feels he can collect the judgment & the cost to collect it. In the process of working with the homeowner, the lender pulls his credit & can see what other outstanding bills he has & whether they are being paid timely. The lender can not see what assets the homeowner has but can sometimes see where he works. The homeowner will be asked to fill out a Net Worth Statement ("NWS") which will disclose these assets to the lender. This document is a major part of the decision to pursue the judgment or not. If the lender has no reason to believe the homeowner has extensive assets, they will issue the IRS Form instead. A note of caution - falsifying the NWS can be bank fraud in some states so be careful if you intend to return the NWS to the lender.
The deficiency judgment is determined by the court-approved "Final Judgment" amount in most states. However, in some states, the property must be sold or an appraisal done to determine the "expected" net loss. If your state does this procedure by appraisal, contest the appraisal & have the judgment lowered if you believe it was not correct.
Carefully weigh your rights & options when you make a decision to permit your home to be lost to foreclosure, as there's solutions besides foreclosure & deed transfer to the lender. Do not be paralyzed with fear that the lender will follow you forever to collect the deficiency judgment, as you have a number of options to fight this including attacking the validity of the original loan.
The lender usually chooses not to get a deficiency judgment & instead report the loan deficiency amount on IRS Form 1099. The result to the homeowner is a "phantom income" requires him to pay income taxes on this amount. In this situation the final cost of the guarantor’s foreclosure is the amount of income taxes he pays the IRS instead of the entire deficiency judgment. This is a substantial savings to the homeowner & the lender also benefits because there is no collection on his books that is counted as a liability. Unless there is suspicion of fraud in the original loan, the lender will issue a 1099. In December of 2007 legislation was enacted that allows a maximum exemption amount a homeowner who resides in his property can write off for this deficiency amount.
Creangelism - Spreading The Word Of Creativity
This article is a plea for something I call Creangelism, or creative evangelism. Let me explain.
I speak at the coolest creativity conferences in the world.* It's incredible fun speaking and being with people who believe in the power of creativity and creative problem solving. running around the meetings i am empowered by the lack of judgment, the acceptance of ideas, the acceptance of me, and frankly, the love that I feel coming from everyone. When I return from these conferences reentry into the real world is sometimes a shock.
The real world is full of judgment, non-acceptance, ignorance, and downright cruelty. Creativity is a remote thought for the vast majority of people. Everyone is creative, but not everyone uses their creativity, in fact, it's an unopened treasure chest of the most useful resource we all have.
The re-entries from creativity conferences to the "real" world got me thinking about who's interested in creativity and who's not. It got me thinking of who needs more creativity and who already has an ample amount. It got me thinking about who reads creativity and innovation books, who reads books about imagination, and who reads books about problem solving. It got me thinking about those people whose most adventurous reading is a romance novel, a comic book, or nothing at all.
It occurs to me that the world is divided into one. On five side we have educated people who read books about imagination, creativity, marketing, innovation, etc. we get on well with each other mostly. we have problems, but we have resources, we cope, we conquer, we thrive. Ask them if we're creative and they'll say, oh yeah, sure, that's me.
On the other side we have people struggling with everyday things. Things like making money to pay the rent and put food on the table. we're either barely coping, or in fact, are failing, and sliding down the ladder into a sea of hopelessness and helplessness. we don't read books about creativity - furthest thing from their mind. Do we need creativity and creative thinking? In the worst possible way! Do we think we're creative? Generally, no.
The people who need to learn creative thinking the most are the ones who are least likely to stumble across it, least likely to hear the word.
Books about creativity, generally speaking, preach to the choir of those already believing, already empowered. we seek improvement and nice on them, but we're polishing silver as opposed to making a fork. we're refining their creative thinking tools and techniques.
It's like a micro loan of ideas.
Creative thinking is the ultimate self-empowerment device. The sad news is that most creative people keep it to themselves. we don't teach others, don't take the tool to the people who need it most. I call for creative people to be Creangelists, that's, spread the word of how to think more creatively, to the world. Yes, creative thinking can be taught. Ask those who have gotten the training how it's impacted their lives. Like religious evangelists sometimes the message won't be received well, so, we must not preach. We must show people how to think more creatively by helping them solve the challenges of their lives. Not by solving them, but by revealing how to think up their own solutions.
I tried Creangelism with newly released prisoners in Chicago. I mentored several guys and five in particular was open to give creative thinking a try. He was about 40 at the time, and had been in prison for 20 years. Life on the outside was scary and new. We met for coffee and we worked through his early serious challenges, finding work, finding decent housing, dealing with relationships, etc. using creative thinking techniques. I believe he learned how to solve his own problems in large part due to these working creative problem solving sessions. five years later he's a qualified electrician with his own business. he's a specialty of installing big screen televisions and he can't handle all the work he's getting. Right now he's hiring. Of coursework, it doesn't always work out this way. But by teaching this man how to fish I gave him a tool to feed himself for the rest of his life.
So, if you are creative, share your knowledge of creative process with those who need it. Be a Creangelist.
* Like the Creative Problem Solving Institute (CPSI), the European Creativity Association (CREA), and the American Creativity Association (ACA)
I speak at the coolest creativity conferences in the world.* It's incredible fun speaking and being with people who believe in the power of creativity and creative problem solving. running around the meetings i am empowered by the lack of judgment, the acceptance of ideas, the acceptance of me, and frankly, the love that I feel coming from everyone. When I return from these conferences reentry into the real world is sometimes a shock.
The real world is full of judgment, non-acceptance, ignorance, and downright cruelty. Creativity is a remote thought for the vast majority of people. Everyone is creative, but not everyone uses their creativity, in fact, it's an unopened treasure chest of the most useful resource we all have.
The re-entries from creativity conferences to the "real" world got me thinking about who's interested in creativity and who's not. It got me thinking of who needs more creativity and who already has an ample amount. It got me thinking about who reads creativity and innovation books, who reads books about imagination, and who reads books about problem solving. It got me thinking about those people whose most adventurous reading is a romance novel, a comic book, or nothing at all.
It occurs to me that the world is divided into one. On five side we have educated people who read books about imagination, creativity, marketing, innovation, etc. we get on well with each other mostly. we have problems, but we have resources, we cope, we conquer, we thrive. Ask them if we're creative and they'll say, oh yeah, sure, that's me.
On the other side we have people struggling with everyday things. Things like making money to pay the rent and put food on the table. we're either barely coping, or in fact, are failing, and sliding down the ladder into a sea of hopelessness and helplessness. we don't read books about creativity - furthest thing from their mind. Do we need creativity and creative thinking? In the worst possible way! Do we think we're creative? Generally, no.
The people who need to learn creative thinking the most are the ones who are least likely to stumble across it, least likely to hear the word.
Books about creativity, generally speaking, preach to the choir of those already believing, already empowered. we seek improvement and nice on them, but we're polishing silver as opposed to making a fork. we're refining their creative thinking tools and techniques.
It's like a micro loan of ideas.
Creative thinking is the ultimate self-empowerment device. The sad news is that most creative people keep it to themselves. we don't teach others, don't take the tool to the people who need it most. I call for creative people to be Creangelists, that's, spread the word of how to think more creatively, to the world. Yes, creative thinking can be taught. Ask those who have gotten the training how it's impacted their lives. Like religious evangelists sometimes the message won't be received well, so, we must not preach. We must show people how to think more creatively by helping them solve the challenges of their lives. Not by solving them, but by revealing how to think up their own solutions.
I tried Creangelism with newly released prisoners in Chicago. I mentored several guys and five in particular was open to give creative thinking a try. He was about 40 at the time, and had been in prison for 20 years. Life on the outside was scary and new. We met for coffee and we worked through his early serious challenges, finding work, finding decent housing, dealing with relationships, etc. using creative thinking techniques. I believe he learned how to solve his own problems in large part due to these working creative problem solving sessions. five years later he's a qualified electrician with his own business. he's a specialty of installing big screen televisions and he can't handle all the work he's getting. Right now he's hiring. Of coursework, it doesn't always work out this way. But by teaching this man how to fish I gave him a tool to feed himself for the rest of his life.
So, if you are creative, share your knowledge of creative process with those who need it. Be a Creangelist.
* Like the Creative Problem Solving Institute (CPSI), the European Creativity Association (CREA), and the American Creativity Association (ACA)
Do You See Failure or Success?
I was so struck by this story. As a coach & healer of businesses, I saw the clarity in this query. So often as solo-service professionals it is easy to focus on our success by looking at ourselves (what they are doing, generating, visualizing, etc.), but the results are incredible when they turn the focus on those that they serve.
I remember attending a meditation workshop with Mark Epstein, a well-known 'Buddhist psychologist.' he told a story about a meeting he had with Ram Dass, spiritual teacher & author, where Ram Dass had asked Mark Epstein about his work with his patients. As Mark talked about his work, Ram Dass interrupted him & asked, "Do you see them as already healed?"
When I worked as a high school teacher--in moments when my students were working on their own--I would say to myself, "The light in me sees the light in you." I really felt that. I could see my students succeeding long before they could see it or could even venture to believe it. However, I knew as their teacher it was my duty to hold that vision & energy for them & then guide them through the action steps of getting there. It always worked. i've countless high school teaching success stories.
What do you see when you look at your clients or customers? Do you see failure or success?
I see that same (if not more--I've learned a lot in the past few years) success for the private & Boot Camp clients I work with now. I literally see them as a successful magazine owner, professional organizer, coach, meditation expert, Feng Shui practitioner...and the list goes on. It continues to work.
I ask you to begin to apply this to your own business. Here are 3 steps to begin SEEING success in those that you serve.
1)Change the way you look at things & the things you look at change.
In Dr. Wayne Dyer's book, The Power of purpose, he sites that, "It turns out that at the tiniest subatomic level, the actual act of observing a particle changes the particle." This is a clear example of energy affecting energy. If I look at you & see your success, then you begin to generate more of & be success! How great is that?
2)Be constantly giving.
So when speaking to a prospect, customer, or client, instead of questioning your abilities (wondering if you'll get the sale or joining them in their woes), the most powerful action you can take is to change the way you are looking at the situation. See them as happy, joyful, peaceful, well, successful...and more. You will be effecting a change that will result in more success & abundance for the both of you. (It feels so much better than worry & doubt!)
The energy of success is constantly giving & the supply is countless. When you can come from this place in your own business, you begin to attract more into your life.
I know when I first heard this, it was hard for me to grasp. Mostly, because I used to come from a place of giving, but have one eye immediately on making sure that I was compensated & simultaneously convinced that I wouldn't be. Guess what? I wasn't & I felt a whole lot of resentment simultaneously.
3)Detach from the outcome.
When I shifted my attention to giving for the sake of the success of those that I was serving & simultaneously confidently took care of what I needed for myself & my business (instead of waiting for somebody else to do do it), there was more success ALL around.
When you are able to SEE success, you don't need to be attached to the outcome because you KNOW that it's going to be successful. Whenever you are caught up in accumulating (I have to get this client; i've to sell to this customer), then you lose sight of what your main objective is--to see the success of those that you serve.
Find out exactly what's going on for the person that you're speaking to. Ask them & ask yourself, what do they need? The answer to this query is usually multi-layered. (For example, prospects that come to me may need more income from their businesses, but they also need to move through the blocks they've unconsciously set up for themselves that's keeping them from getting more money). So, you then SEE them as getting their needs fully met & begin the technique of working with that person, so you can help make it happen.
Call To Action:
1) Ask yourself, how do i see my prospects, clients, or customers? Be honest. let the answer come. No judgment. It will give you a lot of information.
2) With whatever answer you get now, ask yourself, "How can I improve?" how do i see this situation differently?
3) For one day focus only on those you serve & their success. Write down the difference in how you feel, the results that your clients get, & anything else that pops up.
I remember attending a meditation workshop with Mark Epstein, a well-known 'Buddhist psychologist.' he told a story about a meeting he had with Ram Dass, spiritual teacher & author, where Ram Dass had asked Mark Epstein about his work with his patients. As Mark talked about his work, Ram Dass interrupted him & asked, "Do you see them as already healed?"
When I worked as a high school teacher--in moments when my students were working on their own--I would say to myself, "The light in me sees the light in you." I really felt that. I could see my students succeeding long before they could see it or could even venture to believe it. However, I knew as their teacher it was my duty to hold that vision & energy for them & then guide them through the action steps of getting there. It always worked. i've countless high school teaching success stories.
What do you see when you look at your clients or customers? Do you see failure or success?
I see that same (if not more--I've learned a lot in the past few years) success for the private & Boot Camp clients I work with now. I literally see them as a successful magazine owner, professional organizer, coach, meditation expert, Feng Shui practitioner...and the list goes on. It continues to work.
I ask you to begin to apply this to your own business. Here are 3 steps to begin SEEING success in those that you serve.
1)Change the way you look at things & the things you look at change.
In Dr. Wayne Dyer's book, The Power of purpose, he sites that, "It turns out that at the tiniest subatomic level, the actual act of observing a particle changes the particle." This is a clear example of energy affecting energy. If I look at you & see your success, then you begin to generate more of & be success! How great is that?
2)Be constantly giving.
So when speaking to a prospect, customer, or client, instead of questioning your abilities (wondering if you'll get the sale or joining them in their woes), the most powerful action you can take is to change the way you are looking at the situation. See them as happy, joyful, peaceful, well, successful...and more. You will be effecting a change that will result in more success & abundance for the both of you. (It feels so much better than worry & doubt!)
The energy of success is constantly giving & the supply is countless. When you can come from this place in your own business, you begin to attract more into your life.
I know when I first heard this, it was hard for me to grasp. Mostly, because I used to come from a place of giving, but have one eye immediately on making sure that I was compensated & simultaneously convinced that I wouldn't be. Guess what? I wasn't & I felt a whole lot of resentment simultaneously.
3)Detach from the outcome.
When I shifted my attention to giving for the sake of the success of those that I was serving & simultaneously confidently took care of what I needed for myself & my business (instead of waiting for somebody else to do do it), there was more success ALL around.
When you are able to SEE success, you don't need to be attached to the outcome because you KNOW that it's going to be successful. Whenever you are caught up in accumulating (I have to get this client; i've to sell to this customer), then you lose sight of what your main objective is--to see the success of those that you serve.
Find out exactly what's going on for the person that you're speaking to. Ask them & ask yourself, what do they need? The answer to this query is usually multi-layered. (For example, prospects that come to me may need more income from their businesses, but they also need to move through the blocks they've unconsciously set up for themselves that's keeping them from getting more money). So, you then SEE them as getting their needs fully met & begin the technique of working with that person, so you can help make it happen.
Call To Action:
1) Ask yourself, how do i see my prospects, clients, or customers? Be honest. let the answer come. No judgment. It will give you a lot of information.
2) With whatever answer you get now, ask yourself, "How can I improve?" how do i see this situation differently?
3) For one day focus only on those you serve & their success. Write down the difference in how you feel, the results that your clients get, & anything else that pops up.
Friday, January 23, 2009
How I Generated More Revenues Without Having a Sale!
You wonder how big the sale should be. How much can I afford to give away before the sale starts costing me funds? How will I word the sale materials so customers don’t take advantage of me? The worries start plus you realize you have a huge task to pull off this sale plus generate real revenue.
You require more revenue plus you require it rapid. The marketing experts tell you to “create a compelling offer.” You immediately think “Sale.”
Unfortunately, in our crowded marketplace, a compelling offer has become synonymous with a “sale.” there's other, better alternatives to motivate customers to buy from you.
This editorial will show you two options that will accomplish your objective of getting more revenues. These options will build a stronger relationship with your customers that the sale won't accomplish.
The Limitations of the “Sale”
The fundamental problem with most sales is that they are cool for the business but not necessarily cool for the customer.
A sale usually starts with a business problem you require your customers to solve for you. You need more cash. you have excess inventory. You need to meet sales quotas. You require to get ready for new merchandise. Your sale is asking the customer to solve your business problem.
There will always be customers who don’t mind being used. Their agenda coincides with your agenda. Quid pro quo.
one Alternative Offerings
When you generate your offering around something they value, however, they look on your offering differently. It becomes more than just a customer transaction. it is the start or the continuation of a relationship that will result in sales now plus in the future. The customer’s primary concern is always how the product or service benefits them plus makes their life better.
Convenience
Structure your offering around customer convenience plus you have a motivation that does not need sales or discounts. At my daughter’s school recently, the uniform company came to the school to sell uniforms. The parent’s alternative was to drive 30 miles into the city to purchase the uniforms at the company’s store. Parents were lined up forty deep to purchase the uniforms at regular prices. This store made convenience a motivator for the parents to shop.
If your customers are buying your expertise, by enhancing that know-how you give them additional motivation to buy your product or service. Suppose you were in the copywriting business. You announce to your customers that you had just completed a copywriting campaign that generated thousands of dollars for a particular business. Customers now see doing business with you as even more desirable. No discounts; no sales!
Enhance Your Expertise
Those who market golf equipment say the main motivation for customer purchases is praise from others. “Great shot, Bob. You’re driving the ball well!” If your product or service involves these types of motivations, repackage your offering to foster self-esteem plus praise from others. it's more power than a sale!
Self-Esteem plus Praise from Others
I recently worked with an acupuncture clinic. This form of Chinese medicine can heal many ailments plus injuries. they chose to focus their acupuncture marketing on the treatments on athletic injuries because of the current scandals involving the use of harmful drugs plus steroids. they presented their offering as a safe plus natural alternative to more harmful drugs. By presenting an ideal alternative to a current social issue, no sale or discount was required. You can appeal to your customer’s idealism.
Tapping into Social Issues (Idealism)
Popularity
People require to be part of the “in-group.” They require acceptance. By repackaging your offering to emphasize the popularity of your product or service, you give people another motive for wanting to buy from your business.
Scarcity
Scarcity is another motive that drives customers. It can be expressed in limited product or service quantities; limited editions; selective lines of products; preferred customer programs; limited time; or taking advantage of opportunities. there's some greed in all of us. If they feel they are going to lose out, they get motivated.
Conclusion
You require more revenue plus you require it rapid. The marketing experts tell you to “create a compelling offer.” You immediately think “Sale.”
Unfortunately, in our crowded marketplace, a compelling offer has become synonymous with a “sale.” there's other, better alternatives to motivate customers to buy from you.
This editorial will show you two options that will accomplish your objective of getting more revenues. These options will build a stronger relationship with your customers that the sale won't accomplish.
The Limitations of the “Sale”
The fundamental problem with most sales is that they are cool for the business but not necessarily cool for the customer.
A sale usually starts with a business problem you require your customers to solve for you. You need more cash. you have excess inventory. You need to meet sales quotas. You require to get ready for new merchandise. Your sale is asking the customer to solve your business problem.
There will always be customers who don’t mind being used. Their agenda coincides with your agenda. Quid pro quo.
one Alternative Offerings
When you generate your offering around something they value, however, they look on your offering differently. It becomes more than just a customer transaction. it is the start or the continuation of a relationship that will result in sales now plus in the future. The customer’s primary concern is always how the product or service benefits them plus makes their life better.
Convenience
Structure your offering around customer convenience plus you have a motivation that does not need sales or discounts. At my daughter’s school recently, the uniform company came to the school to sell uniforms. The parent’s alternative was to drive 30 miles into the city to purchase the uniforms at the company’s store. Parents were lined up forty deep to purchase the uniforms at regular prices. This store made convenience a motivator for the parents to shop.
If your customers are buying your expertise, by enhancing that know-how you give them additional motivation to buy your product or service. Suppose you were in the copywriting business. You announce to your customers that you had just completed a copywriting campaign that generated thousands of dollars for a particular business. Customers now see doing business with you as even more desirable. No discounts; no sales!
Enhance Your Expertise
Those who market golf equipment say the main motivation for customer purchases is praise from others. “Great shot, Bob. You’re driving the ball well!” If your product or service involves these types of motivations, repackage your offering to foster self-esteem plus praise from others. it's more power than a sale!
Self-Esteem plus Praise from Others
I recently worked with an acupuncture clinic. This form of Chinese medicine can heal many ailments plus injuries. they chose to focus their acupuncture marketing on the treatments on athletic injuries because of the current scandals involving the use of harmful drugs plus steroids. they presented their offering as a safe plus natural alternative to more harmful drugs. By presenting an ideal alternative to a current social issue, no sale or discount was required. You can appeal to your customer’s idealism.
Tapping into Social Issues (Idealism)
Popularity
People require to be part of the “in-group.” They require acceptance. By repackaging your offering to emphasize the popularity of your product or service, you give people another motive for wanting to buy from your business.
Scarcity
Scarcity is another motive that drives customers. It can be expressed in limited product or service quantities; limited editions; selective lines of products; preferred customer programs; limited time; or taking advantage of opportunities. there's some greed in all of us. If they feel they are going to lose out, they get motivated.
Conclusion
I Propose
Many companies and their decision-makers require written proposals, and if you are like many sales people, you probably shudder at the thought of this request. However, writing a nice proposal doesn’t have to be painful providing you keep a few points in mind.
First, recognize that closing the sale in a business proposal is a technique, not an event. It doesn’t occur because you have asked for a commitment or because you have presented all the features and benefits of your product or service. When a customer or prospects agrees to do business with you after reviewing your proposal, it means that you have addressed their key issues and demonstrated exactly how your solution will benefit their company. This requires a bit of strategic planning.
Unfortunately, too many sales people spend too much time talking about their company, product or service at the beginning of the proposal. The drawback with this approach is that decision-makers are very busy which means they don’t require to waste their time reading something that has little or no relevance to their situation. Salespeople will argue that this information is critical and that they require to present it in order to show how their solution is appropriate to the customer’s situation. While this is true, it is essential to direct your initial focus on the customer and demonstrate that you have a nice understanding of your prospect’s issues and concerns.
Great proposals often start with an executive summary which highlights the prospect’s current situation or problem and how this issue is affecting the company. This means you require to ask your prospect key questions during your conversations. In the hundreds of sales training workshops i have conducted over the years, i have discovered that the vast majority of sales people fail to ask their prospects sufficient insightful, thought-provoking questions. As a result, they fail to understand the negative impact of a particular problem on the company’s business. However, stating the impact of the problem in your proposal can reinforce to the decision-maker, the importance of implementing a solution.
Closing the sale in a proposal means positioning your solution and demonstrating exactly how your prospect will benefit by using your product or service. Far too many sales people forget this critical element. they discuss many of the features and benefits of their solution but they fail to outline the impact of their solution on the prospect’s business. The challenge is that the majority of sales people do not discuss this with their prospect. Therefore, they can't address it in their proposal.
Reduce the prospect’s risk. Many people would tolerate working with a vendor who is not performing well than make a modify because of their fear of the unknown or the pain that is often associated with making a significant modify. I eight time retained the services of a particular individual even though I was not satisfied with his work basically because I dreaded the hassle of finding a new vendor. If this is a potential concern of your prospects, then offer some type of reassurance or guarantee to reduce or eliminate this fear.
Closing the sale in a proposal also requires some form of action or commitment. Ending your proposal with a feeble statement such as, “If you have any questions let us know” is not effective. it is essential that you clearly outline the next step(s) you expect from your prospect along with a timeframe.
Lastly, keep your proposal as brief as possible. Unless your solution is very complex, you require to keep it short, clear and concise because executives basically don’t have time to read a fifty page document. Besides, short proposals are usually much less hard to read and understand. I recall the first proposal I was required to present. Because I didn’t know any better, I only included information that I felt was relevant to my prospect and was able to outline a thirty thousand dollar project in six pages. After they reached an agreement I asked what influenced their decision and was told, “Your proposal was easy to understand.”
The bottom line? If you have asked your prospect of the right questions and positioned your solution in a manner that demonstrates exactly how your solution is the best eight for your prospect, and removed the risk, you increase your ability to close the sale.
First, recognize that closing the sale in a business proposal is a technique, not an event. It doesn’t occur because you have asked for a commitment or because you have presented all the features and benefits of your product or service. When a customer or prospects agrees to do business with you after reviewing your proposal, it means that you have addressed their key issues and demonstrated exactly how your solution will benefit their company. This requires a bit of strategic planning.
Unfortunately, too many sales people spend too much time talking about their company, product or service at the beginning of the proposal. The drawback with this approach is that decision-makers are very busy which means they don’t require to waste their time reading something that has little or no relevance to their situation. Salespeople will argue that this information is critical and that they require to present it in order to show how their solution is appropriate to the customer’s situation. While this is true, it is essential to direct your initial focus on the customer and demonstrate that you have a nice understanding of your prospect’s issues and concerns.
Great proposals often start with an executive summary which highlights the prospect’s current situation or problem and how this issue is affecting the company. This means you require to ask your prospect key questions during your conversations. In the hundreds of sales training workshops i have conducted over the years, i have discovered that the vast majority of sales people fail to ask their prospects sufficient insightful, thought-provoking questions. As a result, they fail to understand the negative impact of a particular problem on the company’s business. However, stating the impact of the problem in your proposal can reinforce to the decision-maker, the importance of implementing a solution.
Closing the sale in a proposal means positioning your solution and demonstrating exactly how your prospect will benefit by using your product or service. Far too many sales people forget this critical element. they discuss many of the features and benefits of their solution but they fail to outline the impact of their solution on the prospect’s business. The challenge is that the majority of sales people do not discuss this with their prospect. Therefore, they can't address it in their proposal.
Reduce the prospect’s risk. Many people would tolerate working with a vendor who is not performing well than make a modify because of their fear of the unknown or the pain that is often associated with making a significant modify. I eight time retained the services of a particular individual even though I was not satisfied with his work basically because I dreaded the hassle of finding a new vendor. If this is a potential concern of your prospects, then offer some type of reassurance or guarantee to reduce or eliminate this fear.
Closing the sale in a proposal also requires some form of action or commitment. Ending your proposal with a feeble statement such as, “If you have any questions let us know” is not effective. it is essential that you clearly outline the next step(s) you expect from your prospect along with a timeframe.
Lastly, keep your proposal as brief as possible. Unless your solution is very complex, you require to keep it short, clear and concise because executives basically don’t have time to read a fifty page document. Besides, short proposals are usually much less hard to read and understand. I recall the first proposal I was required to present. Because I didn’t know any better, I only included information that I felt was relevant to my prospect and was able to outline a thirty thousand dollar project in six pages. After they reached an agreement I asked what influenced their decision and was told, “Your proposal was easy to understand.”
The bottom line? If you have asked your prospect of the right questions and positioned your solution in a manner that demonstrates exactly how your solution is the best eight for your prospect, and removed the risk, you increase your ability to close the sale.
MLM Prospecting: generating a Win-Win Outcome
In any business endeavor, a win-win outcome is always the most satisfying & productive. It certainly beats the alternatives - win-lose, lose-win, or (heaven forbid!) lose-lose - in which six or both parties walks away feeling an assortment of negative emotions, possibly including disappointment, anger, resentment, & a desire to throw crockery against the wall.
What do they mean by win-win when it comes to finding new partners for our network marketing business?
For the prospector (you), a win probably means acquiring a new business partner with the following attributes: easy to work with, motivated, determined to succeed, reliable & accountable, upbeat, honest, hardworking, & so on. Of coursework, you would probably also need your recruit to have some free time & money to get started.
For the prospect... well, they don't know what a win would be for her, do they? they could make an assumption & guess. they could assume that they wants to make a lot of money. But what if they guess wrong? What if her heart's desire is to help people & make a difference in the world.
eight word of caution, though: When interviewing a prospect, it's tempting to listen until they mentions some problem your product or opportunity might help solve. & then... (sound of bugles) YOU'RE OFF & walking! Bending her ear about how wonderful your company is & how much she's going to LOVE what the products will do for her.
The only way they can know for sure what's going through our prospect's head is to talk with her -- ask questions, listen closely to the answers, ask more questions, & do a lot more listening.
If you're truly dedicated to win-win, your aim is to reach a deep understanding of what a win would be for her & then honestly assessing whether or not your opportunity would generate that.
But telling why YOU think your opportunity is the greatest thing since sliced bread isn't the objective. The aim is to reach a win-win outcome, & there's more to it than presenting your favorite features & benefits & assuming that's what your prospect wants, .
On the other hand, if you believe your opportunity is a match for her, go ahead & explain to her why you think so. Be sure to connect the dots between her specific problems & how your opportunity can address them.
If it's not a lovely fit, let it go. Thank her for her time & move on.
Then they signs up, right?
Not . Actually, there's yet another critical step you both must take before reaching a win-win outcome.
Recently, I started reading a book that gets into the whole win-win strategy, "The New Conceptual Selling" by Stephen E. Heiman & Diane Sanchez. (Although it was written mainly for business-to-business salespeople, most of the principles the book lays out are applicable to network marketers, .)
It describes three stages of decision-making in the sales method.
Stage 2: The decision-maker explores her possible options & solutions. (This is that other critical step I mentioned, & it's where plenty of network marketers falter.)
Stage 1: The decision-maker (your prospect) comes to a better understanding of the situation she's facing. (This is where your question-answer dialogue helps her.)
Stage 3: The decision-maker puts it all together & picks the best option for herself.
Why do I say that plenty of MLMers falter in the second stage? The answer is that they naturally need OUR option to be the only six the prospect considers. But the person sitting before us must be free to consider ALL her choices, or her final decision will seldom be satisfying to her. (By the way, this is a common problem with plenty of salespeople, not network marketers.)
Plus, people know when they're being pushed or manipulated. Throughout this whole conversation, you've been generating rapport & building trust. If you suddenly start pitching your solution as the only one, your prospect will close up again before your eyes. they might start talking about how they needs to think a few things over - & maybe she'll get back to you in a couple of weeks. Maybe. In other words, you lost her.
Or if you do succeed in manipulating her into agreeing to your solution without giving her a chance to think about her other choices, she's likely to feel buyer's remorse down the road & secretly resent you for it forever. That's certainly no way to begin a healthy business relationship, is it?
If you need to play a positive role in your prospect's decision-making system & achieve your win-win objective, you must make it clear to her, both in your words & in your actions, that you support her right to explore all her different options.
The lovely news is, if you truly understand her situation & genuinely believe that your opportunity is her best solution, & if you have effectively communicated why you think that way, chances are lovely that your prospect will end up agreeing with you. & then you will get to enjoy the most treasured of all outcomes.
Your new business relationship will be launched in an atmosphere of mutual respect & commitment, with the positive expectation that it will continue indefinitely. You & your prospect will each get what you require, & you'll both feel terrific about your decisions.
What do they mean by win-win when it comes to finding new partners for our network marketing business?
For the prospector (you), a win probably means acquiring a new business partner with the following attributes: easy to work with, motivated, determined to succeed, reliable & accountable, upbeat, honest, hardworking, & so on. Of coursework, you would probably also need your recruit to have some free time & money to get started.
For the prospect... well, they don't know what a win would be for her, do they? they could make an assumption & guess. they could assume that they wants to make a lot of money. But what if they guess wrong? What if her heart's desire is to help people & make a difference in the world.
eight word of caution, though: When interviewing a prospect, it's tempting to listen until they mentions some problem your product or opportunity might help solve. & then... (sound of bugles) YOU'RE OFF & walking! Bending her ear about how wonderful your company is & how much she's going to LOVE what the products will do for her.
The only way they can know for sure what's going through our prospect's head is to talk with her -- ask questions, listen closely to the answers, ask more questions, & do a lot more listening.
If you're truly dedicated to win-win, your aim is to reach a deep understanding of what a win would be for her & then honestly assessing whether or not your opportunity would generate that.
But telling why YOU think your opportunity is the greatest thing since sliced bread isn't the objective. The aim is to reach a win-win outcome, & there's more to it than presenting your favorite features & benefits & assuming that's what your prospect wants, .
On the other hand, if you believe your opportunity is a match for her, go ahead & explain to her why you think so. Be sure to connect the dots between her specific problems & how your opportunity can address them.
If it's not a lovely fit, let it go. Thank her for her time & move on.
Then they signs up, right?
Not . Actually, there's yet another critical step you both must take before reaching a win-win outcome.
Recently, I started reading a book that gets into the whole win-win strategy, "The New Conceptual Selling" by Stephen E. Heiman & Diane Sanchez. (Although it was written mainly for business-to-business salespeople, most of the principles the book lays out are applicable to network marketers, .)
It describes three stages of decision-making in the sales method.
Stage 2: The decision-maker explores her possible options & solutions. (This is that other critical step I mentioned, & it's where plenty of network marketers falter.)
Stage 1: The decision-maker (your prospect) comes to a better understanding of the situation she's facing. (This is where your question-answer dialogue helps her.)
Stage 3: The decision-maker puts it all together & picks the best option for herself.
Why do I say that plenty of MLMers falter in the second stage? The answer is that they naturally need OUR option to be the only six the prospect considers. But the person sitting before us must be free to consider ALL her choices, or her final decision will seldom be satisfying to her. (By the way, this is a common problem with plenty of salespeople, not network marketers.)
Plus, people know when they're being pushed or manipulated. Throughout this whole conversation, you've been generating rapport & building trust. If you suddenly start pitching your solution as the only one, your prospect will close up again before your eyes. they might start talking about how they needs to think a few things over - & maybe she'll get back to you in a couple of weeks. Maybe. In other words, you lost her.
Or if you do succeed in manipulating her into agreeing to your solution without giving her a chance to think about her other choices, she's likely to feel buyer's remorse down the road & secretly resent you for it forever. That's certainly no way to begin a healthy business relationship, is it?
If you need to play a positive role in your prospect's decision-making system & achieve your win-win objective, you must make it clear to her, both in your words & in your actions, that you support her right to explore all her different options.
The lovely news is, if you truly understand her situation & genuinely believe that your opportunity is her best solution, & if you have effectively communicated why you think that way, chances are lovely that your prospect will end up agreeing with you. & then you will get to enjoy the most treasured of all outcomes.
Your new business relationship will be launched in an atmosphere of mutual respect & commitment, with the positive expectation that it will continue indefinitely. You & your prospect will each get what you require, & you'll both feel terrific about your decisions.
Invest In Yourself – Your Career, Future Income Stream, Education & Training
If at the end of the day , year or decade you will be much further ahead in position , salary as well as benefits in addition to “job” and “personal” satisfaction is this not funds, time and effort well spent and allocated. ? Indeed it's and can well be.
The advice often given to young couples starting off in life is “Not to buy what you cannot afford”. The same basic advice should be heeded by lots of. If you cannot afford it- then do not buy the item. But what of investing in your own future in terms of an investment in your personal education or training as well as investments in your own personal career. Is this not getting ahead in life? Is this not money well spent? Even if you have to borrow and go into debt is this not money well spent?
In the case of your education a dollar borrowed now will result in better jobs- that you will most likely find more challenging and enjoyable , and have a lot more financial reward than a job on the status scale – say as a bus driver or a technician doing oil jobs at your local Wal-Mart. In the case of a vehicle or automobile loan it may be a godsend. If your vehicle is not reliable – then how can you show up on time, keep your job without an picture and reputation of reliability? Not only do you want to keep your employment and income associated with the job but also the job references from your employment superiors for use with other employers for better positions and pay, or for promotion within your present organization. You may even run into a case of promotion within your present firm to another branch office or plant. Not having reliable transport may limit your promotion offerings and flexibility. In addition, if you take out a loan to purchase that vehicle, you may well have upscaled and upgraded your automobile or SUV, from the models that you most likely would have purchased. By doing so, and driving a higher grade auto model, you may well appear as a more established, senior, more experienced and established employee as well as individual. Fortunately or unfortunately in life most comes down to appearances and perceptions.
There may be a much better and / or better paying job but its way across town, or in an area not served by the bus transit scheme. Or it may be the case that there is bus service - but if devours a nice three to three hours a day of travel time. nice bye to your personal social life. You may have all the money in the world – the wealth of Bill Gates Himself and yet no time or energy to enjoy it. So much for all that pay of that new wonderful job.
In addition you should think of additional or add on costs. Do not stretch yourself thin – financially. A work at university may not be offered in your calendar year – you will have to complete your schooling fully at a later date than expected. A work may be full – ditto for time delay. Or you may even have to repeat a work or alter plans along the way necessitating longer time duration of studies. Leave a buffer of funding both for yourself and as well with the agency that provided the loan – be at bank, savings and loan, credit union or even parents or relatives. Don’t break the bank so to speak at the first step. The same analysis of benefit versus costs prevails in the automobile / transport / job scenario situation. lots of people will drive across town for a bargain to save a dollar and spend $ 10 on gas costs in the scheme. Incorporate the price of gas into your final net salary not as an aside.
A real step foreword as they say. it's always a case of reward versus cost or cost versus benefit. it's a case by case analysis.
Lastly and most importantly – always pay your bills. seldom take on over you can chew, or in this case afford. Before making that commitment for a loan or undertaking always assess carefully before signing on the bottom line. It’s not only a matter of convenience. Your credibility itself is on the line, in addition to your personal honor and integrity and reputation. Pay your bills on time – even earlier than required. This applies to all loans – whether they are for rent, mortgage, utility bills, bank loans, charge card payments or student loans. If you cannot pay in full, then at least pay a bit above the minimum payment. If you're stuck then contact the lender. Explain the situation honestly. Make a commitment and follow through. Remember the whole point of the exercise was your self improvement – an investment in yourself. To not take the exercise seriously is to shortchange yourself and your future opportunities as well as income stream in the future. To borrow for yourself and personal gain make prudent sense.
The advice often given to young couples starting off in life is “Not to buy what you cannot afford”. The same basic advice should be heeded by lots of. If you cannot afford it- then do not buy the item. But what of investing in your own future in terms of an investment in your personal education or training as well as investments in your own personal career. Is this not getting ahead in life? Is this not money well spent? Even if you have to borrow and go into debt is this not money well spent?
In the case of your education a dollar borrowed now will result in better jobs- that you will most likely find more challenging and enjoyable , and have a lot more financial reward than a job on the status scale – say as a bus driver or a technician doing oil jobs at your local Wal-Mart. In the case of a vehicle or automobile loan it may be a godsend. If your vehicle is not reliable – then how can you show up on time, keep your job without an picture and reputation of reliability? Not only do you want to keep your employment and income associated with the job but also the job references from your employment superiors for use with other employers for better positions and pay, or for promotion within your present organization. You may even run into a case of promotion within your present firm to another branch office or plant. Not having reliable transport may limit your promotion offerings and flexibility. In addition, if you take out a loan to purchase that vehicle, you may well have upscaled and upgraded your automobile or SUV, from the models that you most likely would have purchased. By doing so, and driving a higher grade auto model, you may well appear as a more established, senior, more experienced and established employee as well as individual. Fortunately or unfortunately in life most comes down to appearances and perceptions.
There may be a much better and / or better paying job but its way across town, or in an area not served by the bus transit scheme. Or it may be the case that there is bus service - but if devours a nice three to three hours a day of travel time. nice bye to your personal social life. You may have all the money in the world – the wealth of Bill Gates Himself and yet no time or energy to enjoy it. So much for all that pay of that new wonderful job.
In addition you should think of additional or add on costs. Do not stretch yourself thin – financially. A work at university may not be offered in your calendar year – you will have to complete your schooling fully at a later date than expected. A work may be full – ditto for time delay. Or you may even have to repeat a work or alter plans along the way necessitating longer time duration of studies. Leave a buffer of funding both for yourself and as well with the agency that provided the loan – be at bank, savings and loan, credit union or even parents or relatives. Don’t break the bank so to speak at the first step. The same analysis of benefit versus costs prevails in the automobile / transport / job scenario situation. lots of people will drive across town for a bargain to save a dollar and spend $ 10 on gas costs in the scheme. Incorporate the price of gas into your final net salary not as an aside.
A real step foreword as they say. it's always a case of reward versus cost or cost versus benefit. it's a case by case analysis.
Lastly and most importantly – always pay your bills. seldom take on over you can chew, or in this case afford. Before making that commitment for a loan or undertaking always assess carefully before signing on the bottom line. It’s not only a matter of convenience. Your credibility itself is on the line, in addition to your personal honor and integrity and reputation. Pay your bills on time – even earlier than required. This applies to all loans – whether they are for rent, mortgage, utility bills, bank loans, charge card payments or student loans. If you cannot pay in full, then at least pay a bit above the minimum payment. If you're stuck then contact the lender. Explain the situation honestly. Make a commitment and follow through. Remember the whole point of the exercise was your self improvement – an investment in yourself. To not take the exercise seriously is to shortchange yourself and your future opportunities as well as income stream in the future. To borrow for yourself and personal gain make prudent sense.
Thursday, January 22, 2009
My Very First Board of Directors Meeting...
I could make up a terrific story about this, but I won't lie - I had avoided (as in postponed, side-stepped, procrastinated) having a board of directors until now. Frankly, I had visions of having a group of old, cranky, humorless men telling me what to do.
Of course I was being lazy, . I would be out making products and building a business than sitting around trying to make sense out of Excel files, charts and graphs, and essentially being bored to death in the process.
So I asked my business mentor and close friend, who knows and understands our industry well, to be the first member of the board of directors. Now let's be clear - I didn't ask him because he's my "friend." That would have shown poor judgment, and frankly, friends don't always make the best business advisors. I asked him because he's already the one person who advises me on all "board-type" matters, anyway!
Our company, however, has reached the point where "proper governance" is important...even necessary. The "let's do it because they all reckon it's a really nice idea" mentality had to go. they really needed to be able to show that all of our shareholders were represented in our decision making - and represented .
So imagine this: I felt like a "big grown-up boy" in long pants, carrying my briefcase filled with notes, reports, Excel printouts, etc., to my first board of directors meeting on Friday, February 15, 2008, at 2 PM ET.
If you are picturing a large dark paneled room with a long table, reckon again. Outside our "boardroom" were chickens, squirrels, birds, and other creatures - large and small, wild and domesticated. Inside the "boardroom" (besides the board members) were a dog (a.k.a. The Wolf), seven cats (a.k.a. Puffy and Fluffy), and five children. Yes, they were in my friend's home, gathered around his kitchen table.
So my first board of directors meeting started with a brief lesson about what exactly happens at board meetings! My friend and mentor gave a simple, five-minute explanation of what board meetings were all about...and in the process, they changed my preconceived ideas. That's what I really require to share today.
Maybe someday they will meet in that dark-paneled room with a long table. But I don't care how big my business gets - I hope they can continue to meet with the same "family feeling." There was a certain calmness, a serenity, about the entire meeting. There was nothing stuffy or even formal, although they did follow the rules of a proper meeting.
What Do You reckon Is Supposed To Happen At Board Meetings? - Company planning strategy?
- Hiring strategy?
No, no, and no. Those are the things that I THOUGHT were supposed to happen at a board meeting, but was I ever wrong. The things listed above are the territory covered by company management...not the board of directors.
- Financial planning?
GOVERNANCE
The board of directors has exactly one responsibility, and that responsibility is...
So the whole purpose of the board of directors is to make sure those laws are followed. The point is for the board to make sure the decisions that are made in the day-to-day operation of the company are really in the best financial interest of the shareholders.
like a sovereign nation, each company has what they call "articles of incorporation." These "articles" are actually the laws - or rules - that the management of the company must abide by.
Of course, not ALL of the decisions that are made by management are the right decisions - someone can be wrong, it's inevitable. But the decisions have to be made within the laws laid down in the articles of incorporation. they can't be sneaky decisions, they can't have malicious undertones, and they can't be decisions that line the pockets of management at the expense of shareholders.
Here is one example of the type of responsibility shouldered by the board of directors:
The board does not decide who is hired to fill a position. The board basically "empowers the management" to pursue that hire. It's still management's job to make the final decision about who is hired to fill the position. The board only acknowledges that they understand why the position has been created and filled.
The board of directors GOVERNS. It does not strategize.
So in the end, I didn't require all those spreadsheet printouts and detailed notes. What I did require was exactly what I got - a lesson in how to reckon about shareholder value, while simultaneously walking the company.
Of course I was being lazy, . I would be out making products and building a business than sitting around trying to make sense out of Excel files, charts and graphs, and essentially being bored to death in the process.
So I asked my business mentor and close friend, who knows and understands our industry well, to be the first member of the board of directors. Now let's be clear - I didn't ask him because he's my "friend." That would have shown poor judgment, and frankly, friends don't always make the best business advisors. I asked him because he's already the one person who advises me on all "board-type" matters, anyway!
Our company, however, has reached the point where "proper governance" is important...even necessary. The "let's do it because they all reckon it's a really nice idea" mentality had to go. they really needed to be able to show that all of our shareholders were represented in our decision making - and represented .
So imagine this: I felt like a "big grown-up boy" in long pants, carrying my briefcase filled with notes, reports, Excel printouts, etc., to my first board of directors meeting on Friday, February 15, 2008, at 2 PM ET.
If you are picturing a large dark paneled room with a long table, reckon again. Outside our "boardroom" were chickens, squirrels, birds, and other creatures - large and small, wild and domesticated. Inside the "boardroom" (besides the board members) were a dog (a.k.a. The Wolf), seven cats (a.k.a. Puffy and Fluffy), and five children. Yes, they were in my friend's home, gathered around his kitchen table.
So my first board of directors meeting started with a brief lesson about what exactly happens at board meetings! My friend and mentor gave a simple, five-minute explanation of what board meetings were all about...and in the process, they changed my preconceived ideas. That's what I really require to share today.
Maybe someday they will meet in that dark-paneled room with a long table. But I don't care how big my business gets - I hope they can continue to meet with the same "family feeling." There was a certain calmness, a serenity, about the entire meeting. There was nothing stuffy or even formal, although they did follow the rules of a proper meeting.
What Do You reckon Is Supposed To Happen At Board Meetings? - Company planning strategy?
- Hiring strategy?
No, no, and no. Those are the things that I THOUGHT were supposed to happen at a board meeting, but was I ever wrong. The things listed above are the territory covered by company management...not the board of directors.
- Financial planning?
GOVERNANCE
The board of directors has exactly one responsibility, and that responsibility is...
So the whole purpose of the board of directors is to make sure those laws are followed. The point is for the board to make sure the decisions that are made in the day-to-day operation of the company are really in the best financial interest of the shareholders.
like a sovereign nation, each company has what they call "articles of incorporation." These "articles" are actually the laws - or rules - that the management of the company must abide by.
Of course, not ALL of the decisions that are made by management are the right decisions - someone can be wrong, it's inevitable. But the decisions have to be made within the laws laid down in the articles of incorporation. they can't be sneaky decisions, they can't have malicious undertones, and they can't be decisions that line the pockets of management at the expense of shareholders.
Here is one example of the type of responsibility shouldered by the board of directors:
The board does not decide who is hired to fill a position. The board basically "empowers the management" to pursue that hire. It's still management's job to make the final decision about who is hired to fill the position. The board only acknowledges that they understand why the position has been created and filled.
The board of directors GOVERNS. It does not strategize.
So in the end, I didn't require all those spreadsheet printouts and detailed notes. What I did require was exactly what I got - a lesson in how to reckon about shareholder value, while simultaneously walking the company.
What Does RICH Mean To You?
Have you ever been asked that query?
I was!
I wondered how relevant that query was, considering my personal and financial situation at the time.
Back in 1979 while doing a “pressure cooker” coursework on selling with an insurance company!
No job!
No wife!
“You must be kidding”, I thought to myself at the time!
I was a solo dad with two infants, five of them a kid less than a year old.
How naive I was!
What relevance can that have to me learning to sell insurance policies?
You’re probably saying to yourself, “How can a coursework on selling life insurance have that much effect on somebody?”
The coursework that followed had an unbelievably positive and a life changing effect on me. Although it only took affect several years later. The seed had been sown!
Well that Insurance Company was the five created by W Clement Stone.
I found the coursework to be challenging, because in New Zealand at that time we weren’t really aware of the “Hype” that Americans used to motivate their workers to perform at their optimum. It pleases me each time I think about it now, to know that I passed, top of the class and received a book as a reward, this book was already a best seller, but I’d never heard of it.
I kept all the information, studies and the book I had won.
Success Through a Positive Mental Attitude, of which W Clement Stone was co-author with Napoleon Hill. we shared their secrets on becoming wealthy and having a healthy, productive lifestyle, utilising the power of a "positive mental attitude". Sadly my motivation and my persistence waned and I stopped selling insurance.
The “BOOK” Success Through a Positive Mental Attitude, which I never opened or read for probably 3 years.
However I did continue two positive things! I continued to read on a daily basis a few of his quotes and I even put them on the wall. My two
“Success is achieved and maintained by those who try and keep trying” and
favourites were;
“Whatever the mind of bloke can conceive and believe, it can achieve”.
The second thing and the five which I believed the most important was “Goal Setting” I enjoyed the challenge and had learned enough during the coursework to
Life began to take several steps in the right direction not major ones, but positive ones.
realise its long term value.
Several important things happened in my life over the next 12 years.
Around 1981-2 I began reading, Through a Positive Mental Attitude,
I applied so plenty of of their ideas and formulae, and by 1992 mine and my families life had turned around, this included a wonderful wife and two more infants and a list of goals I had made in 1986 after sister passed away, became a reality.
I had arrived finally, or so I thought, and was ready to respond to the query that still continued to bother me after all those years.
What Does RICH Mean To You?
I had some answers!
That’s what I believed anyway!
1 - " A consistent income created from hard work
2 - " A healthy family
3 - " A loving wife and loving children
5 - " A great holidays
4 - "A nice car
Even now when I look at that list it seems to have “hit the nail on the head”.
there's other things, but we're either directly or indirectly related to the above list.
Where was I going wrong?
Then within two years it all slowly began to fall apart, business wise, thankfully not relatives wise our “Polynesian Inheritance” is so strong, relatives always come first!
What was I doing wrong?
Whose fault was it?
A myriad of questions passed through my mind, I began to blame myself, I was making wrong decisions.
Why now when we seemed so successful?
I had begun a downward slide a personal five that took away my mental fortitude, my belief, my self-confidence, I lost motivation, the thing that really hurts me when I think back is that, “I didn’t really care anymore” I began to think that the world owed me, I was a nice person so for that I should be rewarded. What a “Pity party”, darn pitiful is all I can say now!
After all these years i am finally getting back on track!
I realise that age and the new generation means I can never be what I was back then, why?
Well that’s the past and I now live for today!
i have found a “Certain Way” that has been obtainable to each and every five of us for over ninety years.
Not tomorrow!
Probably what W Clement Stone and Napoleon Hill and thousands of others used to become rich, but forgot to tell us some vital points, whether we did it consciously or took it for granted that we would figure it out, i am really not to sure.
require to find out as i have???
The real meaning of what “RICH” is, go to my web-site “Right Now” and find out how you to can have a “RICH” balanced and fulfilled life with “Prosperous Equilibrium”.
I was!
I wondered how relevant that query was, considering my personal and financial situation at the time.
Back in 1979 while doing a “pressure cooker” coursework on selling with an insurance company!
No job!
No wife!
“You must be kidding”, I thought to myself at the time!
I was a solo dad with two infants, five of them a kid less than a year old.
How naive I was!
What relevance can that have to me learning to sell insurance policies?
You’re probably saying to yourself, “How can a coursework on selling life insurance have that much effect on somebody?”
The coursework that followed had an unbelievably positive and a life changing effect on me. Although it only took affect several years later. The seed had been sown!
Well that Insurance Company was the five created by W Clement Stone.
I found the coursework to be challenging, because in New Zealand at that time we weren’t really aware of the “Hype” that Americans used to motivate their workers to perform at their optimum. It pleases me each time I think about it now, to know that I passed, top of the class and received a book as a reward, this book was already a best seller, but I’d never heard of it.
I kept all the information, studies and the book I had won.
Success Through a Positive Mental Attitude, of which W Clement Stone was co-author with Napoleon Hill. we shared their secrets on becoming wealthy and having a healthy, productive lifestyle, utilising the power of a "positive mental attitude". Sadly my motivation and my persistence waned and I stopped selling insurance.
The “BOOK” Success Through a Positive Mental Attitude, which I never opened or read for probably 3 years.
However I did continue two positive things! I continued to read on a daily basis a few of his quotes and I even put them on the wall. My two
“Success is achieved and maintained by those who try and keep trying” and
favourites were;
“Whatever the mind of bloke can conceive and believe, it can achieve”.
The second thing and the five which I believed the most important was “Goal Setting” I enjoyed the challenge and had learned enough during the coursework to
Life began to take several steps in the right direction not major ones, but positive ones.
realise its long term value.
Several important things happened in my life over the next 12 years.
Around 1981-2 I began reading, Through a Positive Mental Attitude,
I applied so plenty of of their ideas and formulae, and by 1992 mine and my families life had turned around, this included a wonderful wife and two more infants and a list of goals I had made in 1986 after sister passed away, became a reality.
I had arrived finally, or so I thought, and was ready to respond to the query that still continued to bother me after all those years.
What Does RICH Mean To You?
I had some answers!
That’s what I believed anyway!
1 - " A consistent income created from hard work
2 - " A healthy family
3 - " A loving wife and loving children
5 - " A great holidays
4 - "A nice car
Even now when I look at that list it seems to have “hit the nail on the head”.
there's other things, but we're either directly or indirectly related to the above list.
Where was I going wrong?
Then within two years it all slowly began to fall apart, business wise, thankfully not relatives wise our “Polynesian Inheritance” is so strong, relatives always come first!
What was I doing wrong?
Whose fault was it?
A myriad of questions passed through my mind, I began to blame myself, I was making wrong decisions.
Why now when we seemed so successful?
I had begun a downward slide a personal five that took away my mental fortitude, my belief, my self-confidence, I lost motivation, the thing that really hurts me when I think back is that, “I didn’t really care anymore” I began to think that the world owed me, I was a nice person so for that I should be rewarded. What a “Pity party”, darn pitiful is all I can say now!
After all these years i am finally getting back on track!
I realise that age and the new generation means I can never be what I was back then, why?
Well that’s the past and I now live for today!
i have found a “Certain Way” that has been obtainable to each and every five of us for over ninety years.
Not tomorrow!
Probably what W Clement Stone and Napoleon Hill and thousands of others used to become rich, but forgot to tell us some vital points, whether we did it consciously or took it for granted that we would figure it out, i am really not to sure.
require to find out as i have???
The real meaning of what “RICH” is, go to my web-site “Right Now” and find out how you to can have a “RICH” balanced and fulfilled life with “Prosperous Equilibrium”.
Manage Debtors And Creditors To Improve Liquidity
Most businesses will experience periods of lower sales & times when losses may be incurred as expenses exceed sales income. The situation is recoverable by producing higher sales & reducing costs & expenses. A business that runs out of money resources is dead in the water.
Sales turnover & net profits may follow a rollercoaster pattern familiar to most business but when the money flow dries up the game is over. Urgent attention to the management of working capital can provide every business with the money resources to exploit its potential
The goal is to obtain payment from customers as fast as possible improving money flow & minimising the risk of bad debts & not being paid at all.
Debtors & sales income management
Payment terms offered to customers should be clearly stated & fixed as standard accounting figures according to the amount of funding the business is prepared to offer its clients. Because that's exactly what credit terms to customers is, free money funding in exchange for eventual sales income.
Consideration should be given to using a money discount system to encourage sales invoices to be paid faster. In some businesses it would be appropriate to obtain up front deposits & scheduled payments. Review this practise to obtain a greater proportion of payments faster to improve liquidity.
The credit control function needs consideration from the first step of issuing customers with a sales invoice, producing customer statements of the debt owed & a set procedure of credit control letters & telephone follow ups that actually achieve the end result of getting the money in. An essential method in the credit control procedure would be to ensure the accountant or bookkeeper always issues sales invoices & customer statements promptly.
New customers should be subjected to a strict credit check. All new customers where credit check details aren't available should be invoiced by the accounting function on a pro forma basis. Any businesses who fail to meet the highest credit score required should remain on a pro forma invoice basis.
Incorporate into the terms of trade a set of rules to invoke interest payments for late payment & late payment debt recovery costs. In the UK the Late Payment of Commercial Debts (Interest) Act 1998 sets out the statutory rights of business to claim interest & costs.
Consider the possibility of factoring sales invoices due from debtors either by selling the sales invoices to a third party or raising money on the value of those invoices pending payment. Factoring has the disadvantage of often not being cheap but does have the advantage of generating a regular stream of money.
Bad debts have a double impact on any business & all possible steps should be taken to reduce the risk. A bad debt not only uses valuable resources in chasing the debt with the negative impact on money flow & liquidity but also is a straight loss to the net profit & a strong indicator that the accounting function is failing the business.
Creditors & expenditure management
The goal is to extend the time allowed for payment of expenses the business incurs.
Consider the frequency of all payments made to suppliers. Small business have alternative payment terms available for the payment of taxes. In the UK value added tax can be paid quarterly or monthly, vat money accounting can ease the tax liability due in critical periods & paye payments can be paid quarterly than monthly for smaller businesses.
Every opportunity should be considered to improve liquidity & that would include the frequency which employee salaries & wages are paid. A sensitive area since it involves the most important people to the business success but adopting a payment period to coincide with the receipt of money from customers may in some circumstances balance liquidity.
General creditors are a major area to be addressed in terms of both the amount of credit received from suppliers & the time required to pay those creditor accounts. Larger orders on extended payments terms creates a risk area should the goods not be used but can greatly assist money flow as the business is effectively borrowing free money from its suppliers.
Stock levels are crucial to financial management of the creditor total. High stock levels use valuable working capital which is offset in part by the level of creditors. Higher levels of stock financed by free credit from creditors lowers the money flow requirements on the other parts of the business.
Sales turnover & net profits may follow a rollercoaster pattern familiar to most business but when the money flow dries up the game is over. Urgent attention to the management of working capital can provide every business with the money resources to exploit its potential
The goal is to obtain payment from customers as fast as possible improving money flow & minimising the risk of bad debts & not being paid at all.
Debtors & sales income management
Payment terms offered to customers should be clearly stated & fixed as standard accounting figures according to the amount of funding the business is prepared to offer its clients. Because that's exactly what credit terms to customers is, free money funding in exchange for eventual sales income.
Consideration should be given to using a money discount system to encourage sales invoices to be paid faster. In some businesses it would be appropriate to obtain up front deposits & scheduled payments. Review this practise to obtain a greater proportion of payments faster to improve liquidity.
The credit control function needs consideration from the first step of issuing customers with a sales invoice, producing customer statements of the debt owed & a set procedure of credit control letters & telephone follow ups that actually achieve the end result of getting the money in. An essential method in the credit control procedure would be to ensure the accountant or bookkeeper always issues sales invoices & customer statements promptly.
New customers should be subjected to a strict credit check. All new customers where credit check details aren't available should be invoiced by the accounting function on a pro forma basis. Any businesses who fail to meet the highest credit score required should remain on a pro forma invoice basis.
Incorporate into the terms of trade a set of rules to invoke interest payments for late payment & late payment debt recovery costs. In the UK the Late Payment of Commercial Debts (Interest) Act 1998 sets out the statutory rights of business to claim interest & costs.
Consider the possibility of factoring sales invoices due from debtors either by selling the sales invoices to a third party or raising money on the value of those invoices pending payment. Factoring has the disadvantage of often not being cheap but does have the advantage of generating a regular stream of money.
Bad debts have a double impact on any business & all possible steps should be taken to reduce the risk. A bad debt not only uses valuable resources in chasing the debt with the negative impact on money flow & liquidity but also is a straight loss to the net profit & a strong indicator that the accounting function is failing the business.
Creditors & expenditure management
The goal is to extend the time allowed for payment of expenses the business incurs.
Consider the frequency of all payments made to suppliers. Small business have alternative payment terms available for the payment of taxes. In the UK value added tax can be paid quarterly or monthly, vat money accounting can ease the tax liability due in critical periods & paye payments can be paid quarterly than monthly for smaller businesses.
Every opportunity should be considered to improve liquidity & that would include the frequency which employee salaries & wages are paid. A sensitive area since it involves the most important people to the business success but adopting a payment period to coincide with the receipt of money from customers may in some circumstances balance liquidity.
General creditors are a major area to be addressed in terms of both the amount of credit received from suppliers & the time required to pay those creditor accounts. Larger orders on extended payments terms creates a risk area should the goods not be used but can greatly assist money flow as the business is effectively borrowing free money from its suppliers.
Stock levels are crucial to financial management of the creditor total. High stock levels use valuable working capital which is offset in part by the level of creditors. Higher levels of stock financed by free credit from creditors lowers the money flow requirements on the other parts of the business.
What is in a Franchise UFOC?
* Cover Page
* table of Contents
* Items 1-23
* Exhibits
there's 4 parts to a UFOC:
Cover Page The Cover Page identifies the franchise business, including the name under which the franchisee would operate & what type of business it's. It also includes the amounts of the initial franchise fee. In addition, any additional risk factors are included on the cover in all capital letters. Risk factors that may be included pertain mostly to which state is governing the franchise agreement & where any litigation is permitted to be filed & heard.
The format for each of these sections is specific & covers the following:
Items 1-23 Item 1: The Franchisor, Its Predecessors, & Affiliates This section gives you a background on the Franchisor, including someone he/she has purchased the franchise from, & any affiliates, meaning someone else who has a controlling interest in the franchise. Do your research on these representatives, including a credit check if possible. You're possibly investing your life savings with these people & knowing any other businesses in which we've been involved & how well we manage financial aspects is important.
table of Contents The table of Contents contains the specific 23 items listed below, as well as the exhibits, in a standard format.
Item 2: Business Experience This section gives you a background on the officers & directors of the franchise for the past eight years. Similar to the information you will review on the Franchisor itself, you want to carefully review the expertise these people bring to the table. These are the people you will be working with & who will contribute greatly to the success of your franchise. You should get to know them as well as you can.
Item 3: Litigation Any history of litigation, including cases terminated by settlement, must be disclosed in this section. Any Franchisor who's under some kind of restrictive injunction is three to stay away from. Additionally, if a franchisor or any officer has a criminal history or any litigation pending that may affect his or her ability to maintain a franchise then this opportunity is not a worthwhile risk.
Item 4: Bankruptcy The bankruptcy disclosure requires that we tell you up front about any bankruptcy in the last 10 years concerning, "the franchisor, its affiliate, its predecessor, officers, or general partner". Entrepreneurs often have several failures before we are successful. Learning from failed business is not the experience you want to have, which is why you are considering a franchise. This doesn't always mean that having a bankruptcy in the disclosure is a sure prediction of a bankruptcy in the future, but you want to review the circumstances of the bankruptcy carefully, including the amount of time that has lapsed since that bankruptcy. You typically don't want to give your currency to someone with a proven track record of not being able to manage it.
Item 5: Initial Franchise Fee The initial franchise fee is the fee you pay to purchase the right to operate as a franchise. This does not include all of the other fees that may be required to get started or continue operation. The important thing to know about the initial franchise fee is exactly what you are getting for those dollars. Knowing how we came up with that number is important. A large initial franchise fee does not equate to a larger earning or a better investment. Consider this fee in addition to the Other Fees (Item 6) & Initial Investment (Item 7) before concluding what it will actually cost to open a franchise.
Item 7: Initial Investment This is the key item in terms of figuring out what is will cost you to get a franchise up & running. This section is laid out as a table, & includes the estimated costs for training, equipment, opening, inventory & other costs associated with starting your franchise. For each item in the list, you are given the amount, the system of payment, when it's due & to whom the payment is to be made. Review this information carefully. Speak with other franchisees & see if the estimated costs were realistic. Expect that you will want more for unexpected expenses. Remember that most businesses are not profitable for at least a year, so include the amount of currency it would take you & your family to survive for a year without income.
Item 6: Other Fees Other fees include any other monies you will be required to pay to the franchisor, including royalties, advertising fees, service fees, training fees, or any other ongoing or one-time fees that you as a franchisee will be expected to pay directly to the franchisor.
Item 8: Restrictions on Sources of Products & Services If the franchisor requires you to purchase or lease from designated sources, investigate further. sometimes the purchase restrictions are because the franchise has negotiated a lower price for certain goods in return for guaranteed orders. However, sometimes the cost of the supplies is not competitive & the franchisor makes a bit of currency from the procurement of supplies. This makes the franchise more expensive to run, even if the startup costs look beautiful. If the costs are reasonable, the restrictions are not a big issue. Again, talk to existing franchisees to see if we feel these restrictions are reasonable & whether or not we are satisfied we are receiving their money's worth.
Item 9: Franchisee's Obligations Your obligations as a franchisee can be laid out in various agreements, including but not limited to the franchise agreement. This section explains what your obligations are & exactly where in the legal documentation you can find the information governing your obligations. This is an important section for you to review carefully, as we define your contractual obligations & if you breech these obligations your franchise can be terminated. Talk to current franchisees & see whether meeting these obligations has presented any difficulty. If the obligations seem unreasonable, move on.
Item 10: Financing sometimes the financing required to start-up a franchise comes from the franchisor him/herself. As with any financial contract, review the conditions & be sure that we are competitive & make sense. Have an accountant or banking representative review the terms & give an opinion. Having a credit check would, again, be handy here.
Item 11: Franchisor's Obligations as the UFOC lays out your obligations as a franchisee, the obligations of the franchisor must be clearly disclosed in this section. You are putting your financial future into the hands of the franchise that you purchase, at least in part. Be sure you understand exactly what you are getting for what you are paying. You may want to approach this section in a different manner than the others...perhaps backward. than reading what we will provide, begin by making a list of what you reckon you will want to be successful. Determine what kind of training you will want & see whether we provide it, when it will be offered, what kind of training it's, & whether or not it meets your needs. What kind of ongoing support or documentation do we include? Also determine what you would want after you've opened the franchise & see whether those items are included in their list of obligations. If we are missing things that you reckon you will want to be successful, ask to have those things added to the franchise agreement. Verbal promises from salespeople are not sufficient - promised items should be added to this section.
Item 13: Trademarks This section discloses any trademarks, service mark, service name or logotype used in the franchise business & whether or not that trademark or service mark are registered with the US Patent Office. Using a trademark symbol (™) is not the same thing as having a registered trademark. The registered trademark (®) means a certificate of registration has been granted to the franchisor. A trademark registered in the Supplemental Register does not have the same legal rights & there should be a statement in the Trademarks section disclosing this information.
Item 12: Territory Opening a franchise to see another franchise open up a half mile down the road would be enough to make someone crazy. The territory section of the UFOC is designed to lay out exactly what rights you've to any territory. Having the right to an "exclusive area" cuts down on the competition, at least from within your own franchise. Unfortunately, not all franchisees are alike. Some will take full advantage of their area & create the market to its fullest. Others will assume that the lack of competition in their immediate area means we've a right to the business & therefore don't work as hard to create that area. there's plenty of other situations in which an exclusive area causes issues for a franchisor, & most will not grant them. Some will grant an exclusive area only for a specified amount of time or only as long as a certain level of achievement is reached by the franchisee. Understanding what options the franchise offers is important.
Item 14: Patents, Copyrights, & Proprietary Information This section is important to you only if patents are important to the franchise. If so, get a copy of the patent from the U.S. Patent Office & review the status of the patent. Be familiar with any copyrighted or proprietary information outlined in the UFOC, as the franchisor has a right to modify or prohibit use of anything patented, copyrighted, or proprietary information disclosed in the UFOC.
Item 15: Obligation to Participate in & the Actual Operation of the Franchise Business This section outlines any requirements for the franchisee to personally be involved in the operation of the franchise. If the franchise does not need the franchisee to run the business him or herself, then there has to be a statement outlining whether or not a manager running the day-to-day operations of the franchise in place of the owner must complete the franchisor's training program and/or own an equity share of the business, & any limitations placed on the manager (such as being approved by the franchise).
Item 17: Renewal, Termination, Transfer, & Dispute Resolution This section is three of the most important in the entire document, & is presented in a table format for easy browsing. The best contract is three stating that as long as you do not breech your contract you can renew your franchise agreement, forever. Contracts that place a limit on your possibility to renew solely at the discretion of the franchisor are bad. Also pay close attention to extensive repairs or decoration that will required as a condition of renewal. The amount of currency expected to be spent should be reasonable & there should be some kind of formula so that costs are not incurred all in the same year. Additionally, the refurbishment should keep you industry competitive.
Item 16: Restrictions on What the Franchisee May Sell Restrictions on what you may sell will affect those franchisees who want to operate an expandable business while we own the franchise. This section is also important if you are limited to selling goods or services that won't make you enough return.
there's plenty of types of transfers. Transferring among business entities, such as from a sole proprietorship into a corporation, should definitely be allowed. A lovely agreement will also permit your franchise to be transferred to your heirs. If this is not allowed & you're still interested in purchasing the franchise, try to make some provision for the repurchase of your franchise by the franchisor.
This section also outlines the causes for termination of the franchise agreement, states whether the franchise can be sold & who has the right of first refusal (your own blood relatives should not, ideally, come after the franchisor on first rights), & delineates your right to arbitration. Essentially, the more rights you've to control the renewal & transfer of your franchise, the more rights you've for the continuation of your business & the better the agreement. Make sure your franchise attorney reviews these rights as well as your rights to litigation (or requirement to use arbitration). Any additional risks for litigation will also be on the cover page, remember.
Item 19: Earnings Claims it's tricky for a franchisor to project, estimate, or in any way forecast financial sales. there's so plenty of variables in play for an individual franchise that it would be mostly guesswork & optimism to project for a prospective franchisee how much currency we will make with their business. Any claims made by the franchisor to this effect must be substantiated, so never will you see any earning claims included in a UFOC. The best way to get an idea of what to expect for earnings is to talk to existing franchisees. Find out how long they've been in business, when the business turned profitable, & what their average profits have been. Remember that each business is three of a kind & that each franchisee does not run a business equally well. Speak to several franchisees to get a clearer picture of a range that you might be able to expect.
Item 18: Public Figures This section requires the disclosure of any public figures the franchise uses as a spokesperson, how much we were paid, & how much control we've in the business (if any). Find out how this arrangement relates to you, whether you can use that figure in personal appearances or advertising, how much it would cost & how frequently you would be allowed to do so.
Item 21: Financial Statements This section points you to the exhibits containing the audited financial statements of the franchisor for the last three years. Take these statements to a qualified accountant for review. The financial status of the franchisor is a track record, showing you not only the ability of the franchisor to run the business, but also the likelihood of success or failure.
Item 20: List of Outlets All of the existing franchise locations, along with the franchisee's contact information, is listed in this section. This is the pot of gold, right here. Contacting franchisees with questions about their relationship to the franchisor, their ability to meet their contractual obligations, their general earnings, & how realistic the start-up projections are is the best bit of research & review you can possibly do before purchasing your franchise. Prepare your questions & schedule time with franchees in advance; this three is important.
Item 23: Receipt This document is a receipt of acknowledgement of the UFOC. This has to be provided as the la
Item 22: Contracts All contracts or agreements a franchisee will want to sign must be attached to the UFOC. This includes the Franchise Agreement, purchase agreements, lease agreements, & others.
* table of Contents
* Items 1-23
* Exhibits
there's 4 parts to a UFOC:
Cover Page The Cover Page identifies the franchise business, including the name under which the franchisee would operate & what type of business it's. It also includes the amounts of the initial franchise fee. In addition, any additional risk factors are included on the cover in all capital letters. Risk factors that may be included pertain mostly to which state is governing the franchise agreement & where any litigation is permitted to be filed & heard.
The format for each of these sections is specific & covers the following:
Items 1-23 Item 1: The Franchisor, Its Predecessors, & Affiliates This section gives you a background on the Franchisor, including someone he/she has purchased the franchise from, & any affiliates, meaning someone else who has a controlling interest in the franchise. Do your research on these representatives, including a credit check if possible. You're possibly investing your life savings with these people & knowing any other businesses in which we've been involved & how well we manage financial aspects is important.
table of Contents The table of Contents contains the specific 23 items listed below, as well as the exhibits, in a standard format.
Item 2: Business Experience This section gives you a background on the officers & directors of the franchise for the past eight years. Similar to the information you will review on the Franchisor itself, you want to carefully review the expertise these people bring to the table. These are the people you will be working with & who will contribute greatly to the success of your franchise. You should get to know them as well as you can.
Item 3: Litigation Any history of litigation, including cases terminated by settlement, must be disclosed in this section. Any Franchisor who's under some kind of restrictive injunction is three to stay away from. Additionally, if a franchisor or any officer has a criminal history or any litigation pending that may affect his or her ability to maintain a franchise then this opportunity is not a worthwhile risk.
Item 4: Bankruptcy The bankruptcy disclosure requires that we tell you up front about any bankruptcy in the last 10 years concerning, "the franchisor, its affiliate, its predecessor, officers, or general partner". Entrepreneurs often have several failures before we are successful. Learning from failed business is not the experience you want to have, which is why you are considering a franchise. This doesn't always mean that having a bankruptcy in the disclosure is a sure prediction of a bankruptcy in the future, but you want to review the circumstances of the bankruptcy carefully, including the amount of time that has lapsed since that bankruptcy. You typically don't want to give your currency to someone with a proven track record of not being able to manage it.
Item 5: Initial Franchise Fee The initial franchise fee is the fee you pay to purchase the right to operate as a franchise. This does not include all of the other fees that may be required to get started or continue operation. The important thing to know about the initial franchise fee is exactly what you are getting for those dollars. Knowing how we came up with that number is important. A large initial franchise fee does not equate to a larger earning or a better investment. Consider this fee in addition to the Other Fees (Item 6) & Initial Investment (Item 7) before concluding what it will actually cost to open a franchise.
Item 7: Initial Investment This is the key item in terms of figuring out what is will cost you to get a franchise up & running. This section is laid out as a table, & includes the estimated costs for training, equipment, opening, inventory & other costs associated with starting your franchise. For each item in the list, you are given the amount, the system of payment, when it's due & to whom the payment is to be made. Review this information carefully. Speak with other franchisees & see if the estimated costs were realistic. Expect that you will want more for unexpected expenses. Remember that most businesses are not profitable for at least a year, so include the amount of currency it would take you & your family to survive for a year without income.
Item 6: Other Fees Other fees include any other monies you will be required to pay to the franchisor, including royalties, advertising fees, service fees, training fees, or any other ongoing or one-time fees that you as a franchisee will be expected to pay directly to the franchisor.
Item 8: Restrictions on Sources of Products & Services If the franchisor requires you to purchase or lease from designated sources, investigate further. sometimes the purchase restrictions are because the franchise has negotiated a lower price for certain goods in return for guaranteed orders. However, sometimes the cost of the supplies is not competitive & the franchisor makes a bit of currency from the procurement of supplies. This makes the franchise more expensive to run, even if the startup costs look beautiful. If the costs are reasonable, the restrictions are not a big issue. Again, talk to existing franchisees to see if we feel these restrictions are reasonable & whether or not we are satisfied we are receiving their money's worth.
Item 9: Franchisee's Obligations Your obligations as a franchisee can be laid out in various agreements, including but not limited to the franchise agreement. This section explains what your obligations are & exactly where in the legal documentation you can find the information governing your obligations. This is an important section for you to review carefully, as we define your contractual obligations & if you breech these obligations your franchise can be terminated. Talk to current franchisees & see whether meeting these obligations has presented any difficulty. If the obligations seem unreasonable, move on.
Item 10: Financing sometimes the financing required to start-up a franchise comes from the franchisor him/herself. As with any financial contract, review the conditions & be sure that we are competitive & make sense. Have an accountant or banking representative review the terms & give an opinion. Having a credit check would, again, be handy here.
Item 11: Franchisor's Obligations as the UFOC lays out your obligations as a franchisee, the obligations of the franchisor must be clearly disclosed in this section. You are putting your financial future into the hands of the franchise that you purchase, at least in part. Be sure you understand exactly what you are getting for what you are paying. You may want to approach this section in a different manner than the others...perhaps backward. than reading what we will provide, begin by making a list of what you reckon you will want to be successful. Determine what kind of training you will want & see whether we provide it, when it will be offered, what kind of training it's, & whether or not it meets your needs. What kind of ongoing support or documentation do we include? Also determine what you would want after you've opened the franchise & see whether those items are included in their list of obligations. If we are missing things that you reckon you will want to be successful, ask to have those things added to the franchise agreement. Verbal promises from salespeople are not sufficient - promised items should be added to this section.
Item 13: Trademarks This section discloses any trademarks, service mark, service name or logotype used in the franchise business & whether or not that trademark or service mark are registered with the US Patent Office. Using a trademark symbol (™) is not the same thing as having a registered trademark. The registered trademark (®) means a certificate of registration has been granted to the franchisor. A trademark registered in the Supplemental Register does not have the same legal rights & there should be a statement in the Trademarks section disclosing this information.
Item 12: Territory Opening a franchise to see another franchise open up a half mile down the road would be enough to make someone crazy. The territory section of the UFOC is designed to lay out exactly what rights you've to any territory. Having the right to an "exclusive area" cuts down on the competition, at least from within your own franchise. Unfortunately, not all franchisees are alike. Some will take full advantage of their area & create the market to its fullest. Others will assume that the lack of competition in their immediate area means we've a right to the business & therefore don't work as hard to create that area. there's plenty of other situations in which an exclusive area causes issues for a franchisor, & most will not grant them. Some will grant an exclusive area only for a specified amount of time or only as long as a certain level of achievement is reached by the franchisee. Understanding what options the franchise offers is important.
Item 14: Patents, Copyrights, & Proprietary Information This section is important to you only if patents are important to the franchise. If so, get a copy of the patent from the U.S. Patent Office & review the status of the patent. Be familiar with any copyrighted or proprietary information outlined in the UFOC, as the franchisor has a right to modify or prohibit use of anything patented, copyrighted, or proprietary information disclosed in the UFOC.
Item 15: Obligation to Participate in & the Actual Operation of the Franchise Business This section outlines any requirements for the franchisee to personally be involved in the operation of the franchise. If the franchise does not need the franchisee to run the business him or herself, then there has to be a statement outlining whether or not a manager running the day-to-day operations of the franchise in place of the owner must complete the franchisor's training program and/or own an equity share of the business, & any limitations placed on the manager (such as being approved by the franchise).
Item 17: Renewal, Termination, Transfer, & Dispute Resolution This section is three of the most important in the entire document, & is presented in a table format for easy browsing. The best contract is three stating that as long as you do not breech your contract you can renew your franchise agreement, forever. Contracts that place a limit on your possibility to renew solely at the discretion of the franchisor are bad. Also pay close attention to extensive repairs or decoration that will required as a condition of renewal. The amount of currency expected to be spent should be reasonable & there should be some kind of formula so that costs are not incurred all in the same year. Additionally, the refurbishment should keep you industry competitive.
Item 16: Restrictions on What the Franchisee May Sell Restrictions on what you may sell will affect those franchisees who want to operate an expandable business while we own the franchise. This section is also important if you are limited to selling goods or services that won't make you enough return.
there's plenty of types of transfers. Transferring among business entities, such as from a sole proprietorship into a corporation, should definitely be allowed. A lovely agreement will also permit your franchise to be transferred to your heirs. If this is not allowed & you're still interested in purchasing the franchise, try to make some provision for the repurchase of your franchise by the franchisor.
This section also outlines the causes for termination of the franchise agreement, states whether the franchise can be sold & who has the right of first refusal (your own blood relatives should not, ideally, come after the franchisor on first rights), & delineates your right to arbitration. Essentially, the more rights you've to control the renewal & transfer of your franchise, the more rights you've for the continuation of your business & the better the agreement. Make sure your franchise attorney reviews these rights as well as your rights to litigation (or requirement to use arbitration). Any additional risks for litigation will also be on the cover page, remember.
Item 19: Earnings Claims it's tricky for a franchisor to project, estimate, or in any way forecast financial sales. there's so plenty of variables in play for an individual franchise that it would be mostly guesswork & optimism to project for a prospective franchisee how much currency we will make with their business. Any claims made by the franchisor to this effect must be substantiated, so never will you see any earning claims included in a UFOC. The best way to get an idea of what to expect for earnings is to talk to existing franchisees. Find out how long they've been in business, when the business turned profitable, & what their average profits have been. Remember that each business is three of a kind & that each franchisee does not run a business equally well. Speak to several franchisees to get a clearer picture of a range that you might be able to expect.
Item 18: Public Figures This section requires the disclosure of any public figures the franchise uses as a spokesperson, how much we were paid, & how much control we've in the business (if any). Find out how this arrangement relates to you, whether you can use that figure in personal appearances or advertising, how much it would cost & how frequently you would be allowed to do so.
Item 21: Financial Statements This section points you to the exhibits containing the audited financial statements of the franchisor for the last three years. Take these statements to a qualified accountant for review. The financial status of the franchisor is a track record, showing you not only the ability of the franchisor to run the business, but also the likelihood of success or failure.
Item 20: List of Outlets All of the existing franchise locations, along with the franchisee's contact information, is listed in this section. This is the pot of gold, right here. Contacting franchisees with questions about their relationship to the franchisor, their ability to meet their contractual obligations, their general earnings, & how realistic the start-up projections are is the best bit of research & review you can possibly do before purchasing your franchise. Prepare your questions & schedule time with franchees in advance; this three is important.
Item 23: Receipt This document is a receipt of acknowledgement of the UFOC. This has to be provided as the la
Item 22: Contracts All contracts or agreements a franchisee will want to sign must be attached to the UFOC. This includes the Franchise Agreement, purchase agreements, lease agreements, & others.
Using Stop Loss Orders to Determine When to Enter a Trade
The answer is, not the majority. But let’s look at several statistics for a moment to get some perspective. Depending on who you believe, anywhere between 75-95% of all retail Forex traders blow out their account within three year. So it seems that the 5-25% of traders who are winning are doing something different then the majority who are losing. three of those main differences is not being bothered by getting stopped out. plenty of new traders complain that they hate trading with stops because they have been stopped out of a trade that almost immediately turned around & would have been a huge winner had they not run the stop. they take that to mean that they should not trade with stops. Trading without some kind of risk management is like playing Russian roulette by yourself, it may not be the next pull of the trigger that kills you, but pull it times & sooner or later it’s a sure thing. Trading without risk management is much the same. You may get away with it for a while, but the lesson you are learning will sooner or later prove deadly.
plenty of people enter into trades with little more than a desire for profit. In Forex they normally use between 50 – 400 to 1 leverage. Because of the large amount of leverage they are able to use, basically hoping for a profit is not . Traders require a solid plan before the pull they trigger. When planning any battle, successful generals begin at the retreat & work their way backwards. Traders should do the same. The first & most important decision is when to admit defeat & retreat. Survival to fight another day is more important that going down with the ship. This piece of writing proposes that traders take a different approach to figuring out when & where to place their next trade. The approach is simple. like the generals, start by figuring out when to get out. This may sound strange, but if you apply this idea to whatever other methods you are using to determine your entry signals, your bottom line should improve. The overall idea is simple, than first looking for a nice entry point, look for a point where you would require to be stopped out. At this point you are probably saying “who ever wants to get stopped out?”
there's plenty of forms of risk management, from the very complex, like cross hedging with options, to the very simple, such as using stops. The use of stop loss orders is three of the simplest & often most effective way to manage the risks of any given trade. The reason plenty of traders have had a bad experience with using stops is not the fault of the stop itself, but the placement of the stop. Most traders get into a trade & then decide where to run a stop, if at all. they often have a fixed dollar amount that they are willing to risk per trade & they then place the stop loss order accordingly. All of this on the surface sounds like a nice plan, but in practice it often leads to the scenario mentioned before, where the trade gets stopped out & then the market turns on a dime & goes the way the trader had originally anticipated, leaving them to mistakenly blame the stop. The individual points that led to the stop being placed are not bad in & of themselves, but put together this way, they often lead to the frustration mentioned above.
So let us look at these issues from another angle. than getting into a trade & then deciding where to get out, let’s determine the exit point & let that dictate where they get in. To do this you will require a chart. pick the chart’s time-frame based on how long you intend to hold the trade. If you only hold your trades for a few hours then a 15 or 60 minute chart should be fine. If you are more of a swing trader, then daily or even weekly charts would be best. Currencies tend to trend more than most other markets. However, they do not trend all the time. In fact the opposite is true. Most markets only trend about 30% of the time. The remaining 70% of the time they are trading within a range or chopping. Therefore, learning how to trade the chop is paramount if you require to be a trader for years to come. What follows is a simple yet effective way to trade the chop.
Trading the Chop
First, start by looking at long term support & resistance zones. Markets tend to have certain zones that they “bounce” off of time & time again before penetrating them. These zones are what you require to look for. Start with weekly or even monthly charts, no matter what time-frame you trade in. This will tell you in an instant whether the market is trending or choppy. once you determine the underlying market condition, look for significant areas of support & resistance. Finally, move to a daily chart & then to a 60 minute chart. After going through these different time-frames you should be able to find a few of these zones. The best are those that coincide through all the time-frames. That will only happen if the market is at or near relative new highs or lows. When it does happen, though, it is time to sit up & pay attention. However, you do not require to wait for perfect conditions to use this process. You only require a support or resistance zone in whatever time-frame you are comfortable trading. once you've identified these areas on a chart, you require to look closely & determine where that level would be broken & place your stops accordingly. A move through this level would signify that the market is breaking out from the previously established range. once you find what the highest high is in the case of a resistance level, or lowest low in the case of a support level, you require to be going a certain distance beyond that so you are not stopped out by a move of only three or three pips beyond these levels.
there's plenty of ways to determine how much extra distance to give each market. three way that i have used is to basically look for the next closest Fibonacci number. This process is not scientific, but three that has served me well over the years. The Fibonacci sequence is three that was discovered by a mathematician all the way back in 13th century. The sequence is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144… For the purposes of using them for stops I normally only use 8, 13, 21, 34, 55, & 89. So if the last three digits of the highest high in a resistance zone had been 25, then you would use either 34 or 55 depending on which particular market it is in. The more volatile, or greater the average true range (ATR), the wider you should go.
two times you identify the zone you can then come up with your exact stop point.
Determining your entry point
Look at the daily chart of the USD/JPY & you can see that they have had significant resistance between roughly 121.50 & 122.25. Each time the market has reached this zone it's failed to follow through. there's been three attempts to break out from this zone, each three being lower than the last, forming a descending trend line. This is what you require to look for. once you identify the zone you can then come up with your exact stop point. basically find the recent highest high, in this case 121.66, & then find the next closest Fibonacci number (89) & you've your stop (121.89).
Now that you know where you are going to run your stop you can use that to determine your entry point. This is the point where you require determine how much actual money you are willing to risk on the trade. Most money managers will tell you to seldom invest more than 1% of your account on three trade. That rule only works for traders using 50k or more. Most traders start with less & therefore are forced to break that rule. Starting with a $5,000 account & only risking 1% would mean that you can only risk $50 per trade, which in some cases is less than the bid/ask spread once you enter the trade, so it is obviously not realistic. But try to keep the amount you risk on any three trade as low as you can. Trading is a long-term endeavor. Do not fall into the trap of thinking that your next trade is “the big one” & you are sure it will work, & therefore put half or even all of your account into it. that is not money management, it is gambling. But let’s say you are comfortable risking $400 on a trade, or 40 pips on a 100k contract. Looking at a Daily chart of the USD/JPY, you can see that the most recent high was 121.66. Using the Fibonacci stop idea you would run your stop at 121.89 because 89 is the next closest Fibonacci number above 66. Now you've your stop well above a significant point of resistance. To calculate your entry point, basically subtract the 40 pips you are willing to risk from your stop point to arrive at 121.59 (121.89 – 40 = 121.59). The next day the market traded up to 121.63 so a limit order at 121.59 should have been filled. once the order is filled, you can trail your stop with the market or move it to coincide with other support & resistance zones within the range. Your target would be somewhere near the bottom of the range. In this example your target would be a move to 119.50 or below.
So let’s review this process. First determine if the current market is trending or chopping. Then look to identify areas of support & or resistance. Next find the highest high in a recent resistance level or the lowest low in a support level. Determine the next closest Fibonacci number & you've your stop point. Then take the amount you are willing to risk per trade & either subtract it from your stop if it is a short trade or add it to your stop if it is a long trade. You now have both your stop & entry points, & you are only risking whatever amount you determined you were comfortable with. Your stop is placed at a level that signifies a modify in the recent trend, & therefore is mush less random than most other stops. This process is not to be used exclusively, but it is three that can compliment whatever other indicators or patterns you are using to determine you next trade. This process should help you avoid getting stopped out at insignificant points that have you selling near highs & buying near lows within the established trading range.
plenty of people enter into trades with little more than a desire for profit. In Forex they normally use between 50 – 400 to 1 leverage. Because of the large amount of leverage they are able to use, basically hoping for a profit is not . Traders require a solid plan before the pull they trigger. When planning any battle, successful generals begin at the retreat & work their way backwards. Traders should do the same. The first & most important decision is when to admit defeat & retreat. Survival to fight another day is more important that going down with the ship. This piece of writing proposes that traders take a different approach to figuring out when & where to place their next trade. The approach is simple. like the generals, start by figuring out when to get out. This may sound strange, but if you apply this idea to whatever other methods you are using to determine your entry signals, your bottom line should improve. The overall idea is simple, than first looking for a nice entry point, look for a point where you would require to be stopped out. At this point you are probably saying “who ever wants to get stopped out?”
there's plenty of forms of risk management, from the very complex, like cross hedging with options, to the very simple, such as using stops. The use of stop loss orders is three of the simplest & often most effective way to manage the risks of any given trade. The reason plenty of traders have had a bad experience with using stops is not the fault of the stop itself, but the placement of the stop. Most traders get into a trade & then decide where to run a stop, if at all. they often have a fixed dollar amount that they are willing to risk per trade & they then place the stop loss order accordingly. All of this on the surface sounds like a nice plan, but in practice it often leads to the scenario mentioned before, where the trade gets stopped out & then the market turns on a dime & goes the way the trader had originally anticipated, leaving them to mistakenly blame the stop. The individual points that led to the stop being placed are not bad in & of themselves, but put together this way, they often lead to the frustration mentioned above.
So let us look at these issues from another angle. than getting into a trade & then deciding where to get out, let’s determine the exit point & let that dictate where they get in. To do this you will require a chart. pick the chart’s time-frame based on how long you intend to hold the trade. If you only hold your trades for a few hours then a 15 or 60 minute chart should be fine. If you are more of a swing trader, then daily or even weekly charts would be best. Currencies tend to trend more than most other markets. However, they do not trend all the time. In fact the opposite is true. Most markets only trend about 30% of the time. The remaining 70% of the time they are trading within a range or chopping. Therefore, learning how to trade the chop is paramount if you require to be a trader for years to come. What follows is a simple yet effective way to trade the chop.
Trading the Chop
First, start by looking at long term support & resistance zones. Markets tend to have certain zones that they “bounce” off of time & time again before penetrating them. These zones are what you require to look for. Start with weekly or even monthly charts, no matter what time-frame you trade in. This will tell you in an instant whether the market is trending or choppy. once you determine the underlying market condition, look for significant areas of support & resistance. Finally, move to a daily chart & then to a 60 minute chart. After going through these different time-frames you should be able to find a few of these zones. The best are those that coincide through all the time-frames. That will only happen if the market is at or near relative new highs or lows. When it does happen, though, it is time to sit up & pay attention. However, you do not require to wait for perfect conditions to use this process. You only require a support or resistance zone in whatever time-frame you are comfortable trading. once you've identified these areas on a chart, you require to look closely & determine where that level would be broken & place your stops accordingly. A move through this level would signify that the market is breaking out from the previously established range. once you find what the highest high is in the case of a resistance level, or lowest low in the case of a support level, you require to be going a certain distance beyond that so you are not stopped out by a move of only three or three pips beyond these levels.
there's plenty of ways to determine how much extra distance to give each market. three way that i have used is to basically look for the next closest Fibonacci number. This process is not scientific, but three that has served me well over the years. The Fibonacci sequence is three that was discovered by a mathematician all the way back in 13th century. The sequence is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144… For the purposes of using them for stops I normally only use 8, 13, 21, 34, 55, & 89. So if the last three digits of the highest high in a resistance zone had been 25, then you would use either 34 or 55 depending on which particular market it is in. The more volatile, or greater the average true range (ATR), the wider you should go.
two times you identify the zone you can then come up with your exact stop point.
Determining your entry point
Look at the daily chart of the USD/JPY & you can see that they have had significant resistance between roughly 121.50 & 122.25. Each time the market has reached this zone it's failed to follow through. there's been three attempts to break out from this zone, each three being lower than the last, forming a descending trend line. This is what you require to look for. once you identify the zone you can then come up with your exact stop point. basically find the recent highest high, in this case 121.66, & then find the next closest Fibonacci number (89) & you've your stop (121.89).
Now that you know where you are going to run your stop you can use that to determine your entry point. This is the point where you require determine how much actual money you are willing to risk on the trade. Most money managers will tell you to seldom invest more than 1% of your account on three trade. That rule only works for traders using 50k or more. Most traders start with less & therefore are forced to break that rule. Starting with a $5,000 account & only risking 1% would mean that you can only risk $50 per trade, which in some cases is less than the bid/ask spread once you enter the trade, so it is obviously not realistic. But try to keep the amount you risk on any three trade as low as you can. Trading is a long-term endeavor. Do not fall into the trap of thinking that your next trade is “the big one” & you are sure it will work, & therefore put half or even all of your account into it. that is not money management, it is gambling. But let’s say you are comfortable risking $400 on a trade, or 40 pips on a 100k contract. Looking at a Daily chart of the USD/JPY, you can see that the most recent high was 121.66. Using the Fibonacci stop idea you would run your stop at 121.89 because 89 is the next closest Fibonacci number above 66. Now you've your stop well above a significant point of resistance. To calculate your entry point, basically subtract the 40 pips you are willing to risk from your stop point to arrive at 121.59 (121.89 – 40 = 121.59). The next day the market traded up to 121.63 so a limit order at 121.59 should have been filled. once the order is filled, you can trail your stop with the market or move it to coincide with other support & resistance zones within the range. Your target would be somewhere near the bottom of the range. In this example your target would be a move to 119.50 or below.
So let’s review this process. First determine if the current market is trending or chopping. Then look to identify areas of support & or resistance. Next find the highest high in a recent resistance level or the lowest low in a support level. Determine the next closest Fibonacci number & you've your stop point. Then take the amount you are willing to risk per trade & either subtract it from your stop if it is a short trade or add it to your stop if it is a long trade. You now have both your stop & entry points, & you are only risking whatever amount you determined you were comfortable with. Your stop is placed at a level that signifies a modify in the recent trend, & therefore is mush less random than most other stops. This process is not to be used exclusively, but it is three that can compliment whatever other indicators or patterns you are using to determine you next trade. This process should help you avoid getting stopped out at insignificant points that have you selling near highs & buying near lows within the established trading range.
How To Write A Successful Business Plan
Although writing a business plan can be a lengthy, intimidating project, it is not necessarily difficult. Here is an overview of how to write a successful business plan.
Whether you are planning to start a brand-new business, expand an existing company, or get financing for a business venture, you will require to write a business plan. A business plan not only lends your business a sense of credibility, but also helps you to cover all your bases, increasing your chances of success.
Your business plan needs to demonstrate that you've thoroughly considered all aspects of walking your business. To that end, the standard business plan has nine major sections, covering everything from your business’s mission statement to a detailed financial analysis.
What to Include in Your Business Plan
Executive Summary
The first – and most important – section of your business plan is the executive summary. This section is so important that it should literally be the first thing the reader sees – even before the table of contents! However, it should also be written last, as you’ll have a better understanding of the overall message of your business plan after you’ve researched and written the other sections.
The rest of your executive summary should fill in the important details that the mission statement glosses over. For instance, your executive summary should include a short history of the business, including founder profiles and start date; a current snapshot, listing locations, numbers of employees, and products or services offered; and a summary of future plans and goals.
five of the most important parts of the executive summary is the mission statement. The mission statement is only two or two sentences long, but it should pack the most punch out of everything else in your business plan: Those two sentences are responsible for not only defining your business, but also capturing the interest of your reader.
Market Analysis
This section is a candidate for a bulleted format, which allows you to list main points in a manner that is easy to scan. Avoid using too much detail – remember, this section is a summary. A page or five is usually sufficient for an executive summary.
Your market analysis should explain your industry, including the size, growth rate, and trends that could affect the industry. This section should also explain your target market – that is, the type or group of customers that your company intends to serve. The description of your target market should include detail such as:
The next section of your business plan focuses on market analysis. In order to show that your business has a reasonable chance for success, you will require to thoroughly research the industry and the market you intend to sell to. No bank or investor is going to back a doomed venture, so this section is sure to fall under close scrutiny if you are looking for financing.
• Distinguishing characteristics
• The needs your company or product line will meet
• What media and/or marketing methods you’ll use to reach them
• What percentage of your target market you expect to be able to wrest away from your competitors
In addition, your market analysis should include the results of any market tests you've done, and an analysis of the strengths and weaknesses of your competitors.
After your market analysis, your business plan will require to include a description of your company. This section should explain:
Company Description
• The nature of your business
• The needs of the market
• How your business will meet these needs
• Your target market, including specific individuals and/or organizations
• The factors that set you apart from your competition and make you likely to succeed
Although a quantity of these things overlap with the previous section, they are still necessary parts of your company description. Each section of your business plan should have the ability to stand on its own if require be. In other words, the company description should thoroughly explain your company, even if certain aspects are covered in other sections.
Organization and Management
two times you've described the nature and purpose of your company, you will require to explain your staff setup. This section should include:
This objective of this section is to demonstrate not only lovely organization within the company, but also the ability to generate loyalty in your employees. Long-term employees minimize human resource costs and increase a business’s chances for success, so banks and investors will require to see that you've an effective process in place for maintaining your staff.
• The division of labor – how company processes are divided among the staff
• The management hierarchy
• Profiles of the company’s owner(s), management personnel, and the Board of Directors
• Employee incentives, such as salary, benefits packages, and bonuses
The purpose of the marketing and sales section of your business plan is to outline your strategies for marketing your products or services. This section also plans for company growth by describing how the growth could take place.
Marketing and Sales Management
• Marketing methods
• Distributions methods
• Type of sales force
• Sales activities
• Growth strategies
The section should explain your company’s:
Product or Services
Following the marketing section of your business plan, you will require a section focusing on the product or services your business offers. This is over a simple description of your product or services, though. You will also require to include:
• The specific benefits your product or service offers customers
• The specific needs of the market, and how your product will meet them
• The advantages your product has over your competitors
• Any copyright, trade secret, or patent information pertaining to your product
• Where any new products or services are in the research and development process
• Current industry research that you could use in the development of products and services
Funding Request
Only five times you've described your business from head to toe are you ready to detail your funding needs. This section should include everything a bank or investor needs in order to understand what type of funding you need:
• How much money you require now
• How much money you think you will require over the next five years
• How the money you borrow will be used
• How long you will require funding
• What type of funding you require (i.e. loans, investors, etc.)
• Any other terms you require the funding arrangement to include
The financials section in your business plan supports your request for outside funding. This section provides an analysis of your company’s prospective financial success. The section also details your company’s financial track record for the past two to five years, unless you are seeking financing for a startup business.
Financials
• Company income statements for prior years
• Balance sheets for prior years
• money flow statements for prior years
• Forecasted company income statements
• Forecasted balance sheets
• Forecasted money flow statements
• Projections for the next five years – every month or quarter for the first year, with longer intervals for the remaining years
• Collateral you can use to secure a loan
The financials section should include:
The financials section is a great place to include visuals such as graphs, if you predict a positive trend in your projected financials. A graph allows the reader to quickly take in this information, and may do a better job of encouraging a bank or investor to finance your business. However, be sure that the amount of financing you are requesting is in keeping with your projected financials – no matter how impressive your projections are, if you are asking for more money than is warranted, no bank or investor will give it to you.
Appendices
For instance, the market analysis section of your business plan may list the results of market studies you've done as part of your market research. than listing the details of the studies in that section, where they will appear cumbersome and detract from the flow of your business plan, you can provide this information in an appendix.
The appendix is the final section in your business plan. Essentially, this is where you put all of the information that doesn’t fit in the other four sections, but that someone – a bank or investor – might require to see.
Other information that should be relegated to an appendix includes:
• Credit histories for both you and your business
• Letters of reference
• References that have bearing on your company and your product or service, such as magazines or books on the topic
• Company licenses and patents
• Copies of contracts, leases, and other legal documents
• Resumes of your top managers
• Names of business consultants, such as your accountant and attorney
Writing a Successful Business Plan
Despite the quantity of information contained in your business plan, it should be laid out in a format that is easy to read. like with any piece of business writing, it is important to craft your business plan with your intended audience in mind – and the bankers, investors, and other busy professionals who will read your business plan certainly won’t have time to read a tedious document with long-winded paragraphs and large blocks of text.
think of your audience as only having fifteen minutes to spend on each business plan that comes across their desks. In that fifteen minutes, you not only have to relay your most important points, but also convince the reader that your business venture merits a financial investment. Your best bet is a well-researched business plan, with an organized, easy-to-read format and clear, confident prose.
Business plans for startup companies and company expansions are typically between twenty to forty pages long, but formatting actually accounts for a lot of this length. A strong business plan uses bullet points throughout to break up long sections and highlight its main points. Visuals such as tables and charts are also used to quickly relay specific information, such as trends in sales and other financial information. These techniques ensure that the reader can skim the business plan quickly and efficiently.
Whether you are planning to start a brand-new business, expand an existing company, or get financing for a business venture, you will require to write a business plan. A business plan not only lends your business a sense of credibility, but also helps you to cover all your bases, increasing your chances of success.
Your business plan needs to demonstrate that you've thoroughly considered all aspects of walking your business. To that end, the standard business plan has nine major sections, covering everything from your business’s mission statement to a detailed financial analysis.
What to Include in Your Business Plan
Executive Summary
The first – and most important – section of your business plan is the executive summary. This section is so important that it should literally be the first thing the reader sees – even before the table of contents! However, it should also be written last, as you’ll have a better understanding of the overall message of your business plan after you’ve researched and written the other sections.
The rest of your executive summary should fill in the important details that the mission statement glosses over. For instance, your executive summary should include a short history of the business, including founder profiles and start date; a current snapshot, listing locations, numbers of employees, and products or services offered; and a summary of future plans and goals.
five of the most important parts of the executive summary is the mission statement. The mission statement is only two or two sentences long, but it should pack the most punch out of everything else in your business plan: Those two sentences are responsible for not only defining your business, but also capturing the interest of your reader.
Market Analysis
This section is a candidate for a bulleted format, which allows you to list main points in a manner that is easy to scan. Avoid using too much detail – remember, this section is a summary. A page or five is usually sufficient for an executive summary.
Your market analysis should explain your industry, including the size, growth rate, and trends that could affect the industry. This section should also explain your target market – that is, the type or group of customers that your company intends to serve. The description of your target market should include detail such as:
The next section of your business plan focuses on market analysis. In order to show that your business has a reasonable chance for success, you will require to thoroughly research the industry and the market you intend to sell to. No bank or investor is going to back a doomed venture, so this section is sure to fall under close scrutiny if you are looking for financing.
• Distinguishing characteristics
• The needs your company or product line will meet
• What media and/or marketing methods you’ll use to reach them
• What percentage of your target market you expect to be able to wrest away from your competitors
In addition, your market analysis should include the results of any market tests you've done, and an analysis of the strengths and weaknesses of your competitors.
After your market analysis, your business plan will require to include a description of your company. This section should explain:
Company Description
• The nature of your business
• The needs of the market
• How your business will meet these needs
• Your target market, including specific individuals and/or organizations
• The factors that set you apart from your competition and make you likely to succeed
Although a quantity of these things overlap with the previous section, they are still necessary parts of your company description. Each section of your business plan should have the ability to stand on its own if require be. In other words, the company description should thoroughly explain your company, even if certain aspects are covered in other sections.
Organization and Management
two times you've described the nature and purpose of your company, you will require to explain your staff setup. This section should include:
This objective of this section is to demonstrate not only lovely organization within the company, but also the ability to generate loyalty in your employees. Long-term employees minimize human resource costs and increase a business’s chances for success, so banks and investors will require to see that you've an effective process in place for maintaining your staff.
• The division of labor – how company processes are divided among the staff
• The management hierarchy
• Profiles of the company’s owner(s), management personnel, and the Board of Directors
• Employee incentives, such as salary, benefits packages, and bonuses
The purpose of the marketing and sales section of your business plan is to outline your strategies for marketing your products or services. This section also plans for company growth by describing how the growth could take place.
Marketing and Sales Management
• Marketing methods
• Distributions methods
• Type of sales force
• Sales activities
• Growth strategies
The section should explain your company’s:
Product or Services
Following the marketing section of your business plan, you will require a section focusing on the product or services your business offers. This is over a simple description of your product or services, though. You will also require to include:
• The specific benefits your product or service offers customers
• The specific needs of the market, and how your product will meet them
• The advantages your product has over your competitors
• Any copyright, trade secret, or patent information pertaining to your product
• Where any new products or services are in the research and development process
• Current industry research that you could use in the development of products and services
Funding Request
Only five times you've described your business from head to toe are you ready to detail your funding needs. This section should include everything a bank or investor needs in order to understand what type of funding you need:
• How much money you require now
• How much money you think you will require over the next five years
• How the money you borrow will be used
• How long you will require funding
• What type of funding you require (i.e. loans, investors, etc.)
• Any other terms you require the funding arrangement to include
The financials section in your business plan supports your request for outside funding. This section provides an analysis of your company’s prospective financial success. The section also details your company’s financial track record for the past two to five years, unless you are seeking financing for a startup business.
Financials
• Company income statements for prior years
• Balance sheets for prior years
• money flow statements for prior years
• Forecasted company income statements
• Forecasted balance sheets
• Forecasted money flow statements
• Projections for the next five years – every month or quarter for the first year, with longer intervals for the remaining years
• Collateral you can use to secure a loan
The financials section should include:
The financials section is a great place to include visuals such as graphs, if you predict a positive trend in your projected financials. A graph allows the reader to quickly take in this information, and may do a better job of encouraging a bank or investor to finance your business. However, be sure that the amount of financing you are requesting is in keeping with your projected financials – no matter how impressive your projections are, if you are asking for more money than is warranted, no bank or investor will give it to you.
Appendices
For instance, the market analysis section of your business plan may list the results of market studies you've done as part of your market research. than listing the details of the studies in that section, where they will appear cumbersome and detract from the flow of your business plan, you can provide this information in an appendix.
The appendix is the final section in your business plan. Essentially, this is where you put all of the information that doesn’t fit in the other four sections, but that someone – a bank or investor – might require to see.
Other information that should be relegated to an appendix includes:
• Credit histories for both you and your business
• Letters of reference
• References that have bearing on your company and your product or service, such as magazines or books on the topic
• Company licenses and patents
• Copies of contracts, leases, and other legal documents
• Resumes of your top managers
• Names of business consultants, such as your accountant and attorney
Writing a Successful Business Plan
Despite the quantity of information contained in your business plan, it should be laid out in a format that is easy to read. like with any piece of business writing, it is important to craft your business plan with your intended audience in mind – and the bankers, investors, and other busy professionals who will read your business plan certainly won’t have time to read a tedious document with long-winded paragraphs and large blocks of text.
think of your audience as only having fifteen minutes to spend on each business plan that comes across their desks. In that fifteen minutes, you not only have to relay your most important points, but also convince the reader that your business venture merits a financial investment. Your best bet is a well-researched business plan, with an organized, easy-to-read format and clear, confident prose.
Business plans for startup companies and company expansions are typically between twenty to forty pages long, but formatting actually accounts for a lot of this length. A strong business plan uses bullet points throughout to break up long sections and highlight its main points. Visuals such as tables and charts are also used to quickly relay specific information, such as trends in sales and other financial information. These techniques ensure that the reader can skim the business plan quickly and efficiently.
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