Starting a Business With High Performance Assessment

Starting a new business has a tremendous upside but there is an equal, if not higher, risk of failure and loss. As noted many times in our material, statistics show that 80% of new businesses fail within the first 5 years. Due to this statistic, we stress a well designed and thought out business plan coupled with an enormous amount of research and planning and use of that data in the implementation of the start-up business.

Lately, life has been little better for existing businesses which are failing at an alarming rate. Of course this is due to the unique economic and banking conditions that currently exist. Most business owners have not experienced similar economic issues and could not recognize the signals prior to the damage. They kept operating as they always did, never stopped to evaluate the environment around them nor did they take timely action when the obvious was upon them.

When businesses come to us for consultation they expect an immediate answer to their problems. Yet they typically do not have an analysis of the situation for us to review, they just give us the symptom and request a solution. This is immediate proof that there is not internal company analysis or evaluations being performed on a regular basis, if at all. Once we suggest that an analysis must be done prior to being able to help them with their problem the expense of that is objected to. Our response is always two fold;

We request the time and support to prepare an assessment from which we then attempt to carve out a solution. When one is sick and they call the doctor, do they receive a prescription or treatment option over the phone, of course not. There first must be an examination after which the prescription or treatment is prescribed. There must always be an assessment of where one is and what the options are. Too many businesses never perform this and if they did they probably would not need us to diagnose the problem.

We then explain that every business is perfectly designed to produce the results that are being attained. In other words, bad production, poor quality, inadequate response time, etc are all a direct result of the systems in place or lack thereof. When things go wrong, one must first look internally rather than blaming the economy or the competition, there is usually a solution within the organization.

When starting a new business these same concepts must be adhered to in the design of the business plan. In other words, you must design systems into your organization in order to make it run efficiently and then you must continually evaluate the systems. Even a “one person” operation needs organization and a system; otherwise things are not done in a manner to assure consistent results.

We point this out to discuss the topic of self analysis. Many of the problems in large and small businesses exist in the organizational elements of the company and are not looked into because these systems were typically put into place by the owner and the owner can never be wrong. Alternatively, many times the owner may be willing to change but time is never taken to sit down and perform a routine assessment. Egos and failure to self evaluate are common reasons of small business failure. Pride and passion are assets that the business owner must have but they cannot be placed ahead of good business practices. A great example is the business plan. This is usually written by the owner and is designed to promote the company and obtain investors or bank financing. With that as the rationale for its drafting, many times the data is skewed in a more positive light than reality and/or detailed research is not done for whatever reason and glaring holes exist in the plan itself. Thus many small businesses are started and are doomed to failure before the first widget is produced. Therefore, one must be diligent to be realistic when doing the business plan and then assess the good and the bad. View the project in realistic terms, not in terms of hopes or goals. If the plan shows poor cash flow or multiple year losses, redesign it or terminate the project.

How to Make Your Finances Survive the Credit Crunch

I have put this guide together primarily because I am currently getting a lot of inquiries from people who are feeling the pinch from the credit crunch and they are asking for ways to get through it with the minimum of long term consequences. Now please understand that this is not a quick fix and it does take a lot of hard work and a great deal of sacrifice but if you are prepared for both then this will help. Remember we are a nation of borrowers and not savers and it is for this reason alone that we all find ourselves in this position.

First of all, without casting any aspersions on any particular person it has to be said, that getting your particular financial situation sorted, may be a little like being an alcoholic in so much as the first step is admitting you have a problem. The reason for this is if you can’t admit you have a problem you will not be able to properly implement the solution. Before you do anything detailed in this article you have to change the way that you spend. You have to stop spending money other than what you have to spend to survive and meet your obligations for borrowings. It is worth it because once you have come out of this you will be a far better person and you will appreciate money and the things it can do for you far more.

Most people are feeling the credit crunch badly because over the past few years they have spent too much and most of the money that they have spent has come from borrowings. Now in a normal market this kind of practice can be OK. However in this market it is totally unacceptable because borrowing is very tight and if you are able to borrow at all it will be at higher market rates than you would have normally been used to.

So the very first thing you should do is make what is known as an income and expenditure sheet. This will detail all your income such as income from employment any tax benefits and allowances. In addition all your outgoings such as mortgages loans HP and credit card payments fuel costs such as electricity gas, and also food and other expenditure. Things that should be detailed on this list are things you have to pay and not things you don’t have to pay such as going on holiday etc. If you follow this plan you will be able to reap the benefits soon enough and mark my words you will appreciate them far more if you do wait as you will be able to fund them without having to resort to debt to cover them.

The next step is to try and reduce some of those outgoings, for example you can look for a remortgage to reduce your mortgage payments. Whilst I would never recommend it, you can always consider changing a repayment mortgage over to interest only until you get yourself back on your feet at which point you can reschedule the payments back to repayment. Better to be able to meet all your outgoings and only pay interest on your mortgage than struggle with a repayment mortgage and start falling behind with other things. The consequence of this is you may not be able to get further borrowings if you start to fall behind with anything at this stage.

You can also look for cheaper credit cards, a lot of credit card companies have put up their interest rates recently. However they are still offering reduced rates for good quality new customers. With that in mind don’t stick with your provider if they have decided to rip you off you should have no loyalty there.

You can also consider if the need is great consolidating all your loans onto your mortgage or a secured loan. Now this is never good advice, because consolidating loans and credit cards onto any long term debt will always cost you more as you will be paying for that debt over a longer term. That said it may be your only option to reduce your outgoings to a more affordable level, but I would only consider it if it is the last resort and failure to do it would result in you falling behind, but to reiterate whilst it may be a lot cheaper each month, you will be paying more for your credit over the long term so take this option only if you have to.

Have a look at your utility bills see if there is something you can do to reduce them. Obviously using less power or turn the heating down is always a good start but also get online to see if there is a cheaper supplier for you. This sort of practice can be used for virtually anything and everything you buy so get on the internet and see if you can save some money by just changing who you deal with.

I understand there may be some people out there who have gone beyond the advice I have detailed so far and now I will get to you and what you can do. First of all most peoples biggest problem when they are in a bad situation as far as their finances go is a complete over commitment to debt. I agree that over recent months everything has become more expensive but that said most people would be OK if it wasn’t for the debt that they have be it credit card debt car loans HP or mortgages, it has all just become too much I for one recognise that.

The most important thing that you can do when in this situation and normally, it is the last thing anyone actually does, is get in touch with your lenders. That means all of them credit card companies, finance companies and even your mortgage company. One of the biggest issues I have to deal with when helping clients out of situations such as this is the complete lack of contact the lender has had with the client. It is all well and good me speaking to the lenders on the clients behalf but if that is the first call they have had at the end of a long time trying to recover the debt then it rarely goes well.

So start by get all your statements together along with your income and expenditure and get in touch with the lender. Make sure that all your facts are straight be prepared and you should get the result you want. In addition be realistic, if you are supposed to pay the lender 300 per month don’t think you will get away with 10 pm . Whatever you do decide to pay them make sure it is a fair distribution between all the lenders of your disposal income, failure to do this will result in them not accepting your proposal, in addition be prepared to tell them what you are paying other lenders so they understand that you are not short changing them.

You will need to explain to them why you are in the situation you are in, above all you will need to make an agreement to pay them something and that is best done from the basis of some sort of calculation, for example get your income and expenditure worked out, tell them what you can afford to give them and why. In addition try and give them some light at the end of the tunnel in so much as a proposal, once you have cleared one of your other debts you can start paying them more. You will find that this approach will make most lenders far more receptive to any deal you offer them. Remember all a lender wants is the prospect of a full repayment and if you can give them the assurance that this is going to happen in time, they will invariably work with you.

So to summarise, you need to change your spending habits, cut your costs down to the bare minimum you can do this by researching the things you have to pay for such as your utility bills etc. Also research you credit cards and loans etc to get your self on the latest best deals. Consider a remortgage or secured loan to consolidate everything. And finally if you are at the last resort get your debts together and start ringing your creditors and making deals with them, but do your homework beforehand. Above all lenders like contact lots of contact ring them before they ring you and you will be better off straight away.

Steps to Manage and Eliminate Your Debt

Is there a secret all knowing method to eliminating debt, no not really, but there are several smart techniques and methods that can assist you in eliminating your debts. First you must take a look at the amount of debt you have incurred since this will ultimately affect the length of the process. Regardless of the time it takes if implemented and stuck saw through these methods will help relieve you of your debt worries.

First an understanding of debt management. There are too many of us who live outside our means. We want the big screen television, the newest sports car, the latest electronic gadget but do we really need it? If we can learn to separate our wants from our needs then not only can we have more money available to help pay off debt, but we can also prevent ourselves from obtaining more debt.

Do you know what the common mistake is that most of us make its turning money into debt? Most of us when we get that raise we wanted or anything that puts extra money in our pocket immediately we start thinking about what we can spend it on. Let’s say that in the worst case scenario it is used to help finance a new vehicle, well now we’ve just created more debt for ourselves.

Now by no means is there anything wrong with this if you are a person who has little to no debt incurred and can easily pay back this loan over time without worry. But for the majority of us this expense will just become a part of the long list of things we owe. For those of us in debt there is however, relief, that relief becomes possible with a change of habit and a new frame of mind, these are the first steps to debt elimination.

What are your wants and needs, what expenses can you live without monthly? Figure this out and create a budget, now with that extra money that you were putting elsewhere use it to help pay off your least expensive debt. As an example if you budgeted and found that you now have an extra $100 and a loan payment that you have been paying $50 bucks monthly own add the $100 to it.

Now you are paying $150 on the loan and it will be paid off in a shorter period of time. Now what happens when that loan is paid off, do you use the money to celebrate or apply it somewhere else? If you have debt elsewhere then it should go towards that debt. Say you paid off that loan and now there is your vehicle payment of $300 monthly. Add the $150 and now you are paying $450 on that loan shortening the length of time it takes to pay it off.

These are sure fire methods that can help you to eliminate your debt but they will be dependent on the amount of debt you have and your ability to stick to the methods. If you have a lot of debt or want a way to pay off all your debt in a shorter period of time and dramatically change your lifestyle in the process there is another option. Many average people are living debt free now thanks to a successful online business and that same success is available to you.

End Bankruptcy Woes With a Fresh Start Loan

If your past financial circumstances left you with no choice other than to file bankruptcy, you may be working on rebuilding your credit file. Bankruptcy plummets your credit score down to the lower 400s, so the task at hand is not simple – but not impossible either. You can reestablish yourself as being creditworthy in a year or less with a fresh start loan.

A fresh start loan is a loan that most banks are more than happy to approve. You can be looking at credit scores of 700 or better in no time.

Fresh Start Loan Jump Starts Credit Rehab

When you take out a fresh start loan, you deposit an amount that is equal to the amount that you wish to borrow into an interest-bearing savings account with the bank or lending institution. The lender then loans you the amount that you deposited; you then make monthly payments on the loan until it is paid off. Your savings account is used as security on the loan.

The advantage of taking out a fresh start loan that is backed by a savings account is twofold. The loan not only works to improve your credit score by reporting your good payment history to all three major credit bureaus, the savings account looks good to other potential lenders while it pays interest on your money.

Keep Your New Slate Clean

Since the discharge of your bankruptcy, you are starting new with a clean slate. This is the best time to become a responsible borrower. There are a few basic strategies that can point you down the right road when it comes to rebuilding your borrowing reputation.

The most important first step is to formulate a budget and stick to it. A budget is important because it assists you in making intelligent and financially sound decisions during the vital months following bankruptcy. Never extend your credit beyond the 28/36 ratio that lenders look at when they determine your eligibility for a loan.

Implement the 28/36 Ratio

The 28/36 ratio is typically used to mortgage financing; however, following its guidelines can help to improve your credit score fast. The 28 in the 28/36 ratio means that you should dedicate no more than 28 percent of your gross monthly income on housing payments. This could apply to rent if you are a non-homeowner. The 36 stands for setting aside no more than 36 percent of your gross monthly income towards recurring debt payments, including your housing expense, car loans, student loans, credit card payments, child support, or judgments. That means that if you have a gross monthly income of $2000 – your combined housing payment and other debt payments should not exceed $720. Implementing the 28/36 ratio system into your budget can be a sure-fire way to succeed in rebuilding your blemished credit file.