February 22, 2012

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Hedging currency risks

February 13, 2012 By

Do you hedge your currency exposure?

 

If you run a small business and you think it would be wise to reduce your currency risk – thus removing the uncertainty from future currency transactions, there are several tools you can use to help you achieve your goals.

 

First off, a good currency broker should be able to assist you in various ways including hedging, the placing of stop-loss orders and organizing forward currency exchange contracts. All these policies can help reduce a company’s exposure to foreign exchange risk. So if you’re an importer, an exporter or a bit of both, these may well be sensible actions to take.

 

We’ve all seen just what kind of shifts the international currency markets are capable of in recent times. These may well work in your favour, but if you’re a business person rather than a gambler, you really want to put policies in place to minimize your exposure.

 

A currency hedge is a financial tool usually called a “derivative” in that it derives its value from an underlying asset. Most commonly, the types of hedging strategies used for currency exchange are options and forwards; an option allows you to set the exchange rate at which you want to carry out your currency transaction t today’s prices.

 

A forward contract, on the other hand, allows you to agree on a specific exchange rate for a future date.

 

You will never be able to completely remove the risks of foreign exchange fluctuations, but by speaking to expert Forex traders and telling them exactly what you want to achieve to minimize the downside risk – the right adviser should be able to help you do just that.

 

Of course, there is a downside. The exchanges may move against you – and against your hedge. But the whole principle of a hedge is that you cannot completely win outright – but nor can you lose. To run any form of international business without a hedge is really akin to gambling.

Written by David, a keen financial blogger, who writes about topics ranging from currency trading to insolvency issues.

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Why are you in business?

January 13, 2012 By

Are you really clear about your business goals? Why did you go into business in the first place? Was it to do something you love, to gain your independence, or simply to make as much money as you possibly could?

Whatever the reason, it’s always important not to lose sight of your business goals. Your goals will probably change over time, but remember not to keep doing your business for its own sake if you’re no longer in it for the right reasons; life’s simply too short.

This may sound like obvious advice, but how many people do you see who went into  business for reason X, but are staying in the game for completely different reasons – or maybe even a simple lack of imagination and lateral thought?

If this is you – it may well be time to re-evaluate.

I remember seeing a cartoon strip a few years ago about a business owner who loved design at school, but hated maths, so went into business as a designer. And as his business became a raging success and he employed other designers to help him, he gradually came to concentrate ever more on running the business by doing – you’ve guessed it – maths in the accountancy functions and business projections etc. So his life had come full circle and he was making a living doing what he’d sought to avoid.

Many of us make this mistake in one form or another. You often see people who ostensibly set out to make money, and who have made more than they could ever reasonably need, but who then carry on aggressively trying to make more and more. This may be OK if they really love the work and the process– but otherwise it’s pure folly; a kind of ultimate madness or folly if you like, that many of us suffer from.

So don’t fall into the trap – do what you love and if you can make a living doing so – be happy!

This article was written by financial blogger David. He will pretty much cover every subject, from the trend of the UK Payday loan to student finance issues.

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Top Ten Questions for Budding Entrepreneurs to ask Themselves

December 13, 2011 By

In this climate of financial insecurity and redundancies many people are thinking about working for themselves. This can be a hugely rewarding experience both for fiscal reasons and work life balance but you need to start any venture with your eyes wide open. Here is a list of the top ten things to ask yourself if you’re thinking of starting your own business to help you decide if it is a good idea or should be destroyed in the office shredders:

  1. What is your product or service going to be? Who else is doing it and how does your offering stack up against the competition?

  2. What is your market place? Who are you going to sell to and are people going to be interested?

  3. What is your business plan, including any plans for growth and expansion?
  4. What are you going to charge and is this rate competitive and will it give you the profit you need for the company to be viable?

  5. Are you going to open a shop or office or operate from your home address? If you are working from home have you got the workspace you need?

  6. Do you have all the required equipment from UK shredders to telephones, a van perhaps or even warehouse storage?

  7. Do you have any capital to fund the venture or do you need to borrow money? How will this affect you?

  8. How much money do you need to earn to support your family and is this realistically represented in your business plan?

  9. How are you going to advertise, market and communicate about your business to potential customers and business users?

  10. How will you measure success or failure? How long are you going to give yourself to decide if the business is worthwhile and what is your exit strategy?

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International business currency advice

December 12, 2011 By

If you have international business interest which include mainland Europe, you’ll probably know only too well how unsettling the Eurozone crisis has been for everyone.

Now, news that the UK is the only EC member state not to have backed the tax and budget multi-country EC pact to tackle the Eurozone debt crisis is even more unsettling – regardless of whether or not it’s the right decision to have made. All the 17 countries that use the euro have so far agreed to the deal.

Businesses hate uncertainty. They can deal with bad situations effectively – but they don’t like not knowing what the plan is, exactly, regardless of whether the business leaders actually agree with the strategies or not.

So when business people are trying to make decisions during a time of uncertainty, the logical decision is to defer decisions and to put off any major purchase decisions that don’t really have to be made right this minute.

The knock-on effect of these entirely logical decisions can be disastrous for small businesses involved in international trade.

There are ways in which you can fight back, though. International currency hedging through trading foreign exchange markets, or “Forex”, for example may be very logical if you need to take the fear out of any major seismic currency shifts whose potential you may be over exposed to.

Similarly, gold trading may be a very logical decision for you to take. Gold is traditionally seen as a safe haven in troubled times – which is why its price has risen so sharply of late. If you feel you’re under exposed or maybe even over exposed to gold, then trading in gold futures, for example, enables you to hedge against any pending disasters.

Thinking laterally about the future is key; recent events have shown us that pretty much anything is possible.

This article was written by David – a keen financial blogger. He often tries his hand at gold trading, keeping up to date with the latest news online to help him out.

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Internet security for entrepreneurs

December 12, 2011 By

One of the most important things you can do for your own business is to get good antivirus software for your computers.

If you’ve recently left a bigger business to start up on your own, something that may not have occurred to you is the absolute necessity for antivirus protection, especially if you have been used to the IT department taking care of that kind of thing.

If you’re a one-man band now, though, you have to consider every aspect of the business, from sales and revenue, through to insurance, internet security and everything to do with your premises – if you have them.

Choosing antivirus software doesn’t really require too much knowledge about technology. Have a look online at the different programmes available and consult internet forums to see which are the most popular or reliable.

You’ll soon see which companies offer the best deals – but if you’re not sure about their reputation, find a forum to ask a question. The people on these kinds of forums are far more interested in these topics, and therefore far more knowledgeable than you, and will be more than willing to share their wisdom.

There are lots of free antivirus downloads available. Once you’ve decided on a reputable brand, search their website for a free download – or a trial version. Follow the onscreen instructions to download and install the software. If it’s a trial version, don’t forget to put a reminder in your calendar before the first payment schedule comes up – if you forget, you’ll be paying automatically if you’ve given your credit card details when you signed up for the trial, even if you uninstall it.

Once you’ve sorted out the computers, don’t forget to do the same thing for your mobile phone – these are just as susceptible to virus attacks.

 

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How to run your business vehicle fleet

November 23, 2011 By

Part of running your business means making sure you take care of all internal admin as well as taking care of your customers. If your business has any vehicles owned or leased by the business, you should keep accurate records and maintain them regularly.  This will not only help protect your employees when they use the vehicles, it will also protect you and your company in case of accidents or legal claims.

Remember the following guidelines to keep everything in order.

Safety inspections

Ask your employees who use the vehicles to carry out regular visual inspections. Any defects should be reported and logged.

Book in regular mechanical inspections with a professional mechanic. A quarterly check can give early warning on mechanical issues and it’s better than just doing an MOT once a year, which only checks whether the vehicle is roadworthy on the day of the test.

Fix problems immediately

Make sure drivers inform you about any problems immediately. As soon as you can, get these defects fixed, and keep meticulous records of when problems were fixed. This can be as simple as holding onto the invoice from the garage who did the repair.

Diarise

Timetable any important dates for the vehicles.  This includes MOTS, renewal dates for insurance and tax.  Give one person overall responsibility, and ask the drivers to take personal responsibility for the car they drive.  This will give a double check system, so it’s less likely to fail.

Seek value

When lease contracts come up for renewal, hunt around for any better deals – or vehicles – on the market. The same goes for any aspect of business – why keep paying more simply because you don’t want to invest the time in looking around for a better deal?

Get someone else to do it

No, this isn’t a joke. Business gurus like David Lichtenstein and Dale Carnegie follow the mantra that you should stick to what you’re good at, and delegate the rest.  If you have a great administrator in the office, give them fleet control, which will free you up to concentrate on the income- generating side of the business.

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How to name your business

November 9, 2011 By

Choosing a name for your business may seem like the fun part of the deal – and it is. But it’s absolutely vital that you get it right. What about the involvement of Sean Parker as portrayed by Justin Timberlake in the 2010 movie The Social Network? At one point, Parker says to Facebook founder Mark Zuckerberg (played by Jesse Eisenberg): “Drop the ‘The.’ Just ‘Facebook.’ It’s cleaner.” And, he helped make himself a few billion dollars in the process by this complex “drop the THE” business insight!

Your company or product name is usually the first thing your customers read or hear and it will form an immediate impression in their minds of what’s on offer – whether you like it or not.

So put a lot of thought into this.

The name(s) you choose are likely to be around for quite some time, particularly if they’re successful. If they aren’t – well just maybe the nomenclature will have contributed to that failure!

One of the safest options is to call the company something relatively conservative, but to name the product/s in more innovative ways. Procter & Gamble is relatively staid, for example, but it doesn’t stop the products having whizz-bang names down the years.

Unfortunately, it’s not as easy as coming up with a great name. There are legal complications, potentially.

If it’s a company name you’re concerned about and yours is or will become a Limited Company, then you’ll need to register the name with Companies House (or use an agent to do this for you). Their website includes information on company naming and what names aren’t available – and there are a lot of these unfortunately.

And if it is available, there are still a few more rules, as follows:

It must end with ‘limited’ (or Ltd), ‘public limited company’ (or plc) or Welsh equivalents if you are a company.

If you have a limited liability partnership your name must end with ‘limited liability partnership’ or LLP (including Welsh equivalents) if you are an LLP.

Also, you must ensure that your chosen name isn’t offensive and doesn’t include any sensitive words or expressions unless you’ve obtained specific permission to use them which, let’s face it, is unlikely!

With product naming, the trademark issues can become even more complex. Go to the UKgovernment’s Intellectual Property Office at www.ipo.gov.uk for further advice.

This article was written by David, who specialises in offering advice to start-up businesses. He frequently blogs his advice too, telling people about everything from the latest payday loan to the best banks.

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Flexible Working For Life

September 27, 2011 By

Gone are the days when the man of the house went to work in an office from 9 til 5 whilst his apron-wearing wife stayed at home washing socks and making dinner. These days modern family life is much more diverse and the demands on our time are more fluid, almost always requiring an element of flexibility in our work commitments.

One of the ways to create a really flexible working environment is to work for yourself, and ideally from home. It is amazing how much you can get done when you don’t have to spend hours on your appearance and commuting for miles to meetings! The internet is of course your best friend for this kind of set up, and making sure you have a powerful website with comprehensive wordpress hosting is really important.

Once you have decided to set up on your own you need to draw on all your skills and experience to get your business plan right. Don’t be afraid to ask for help in areas you are not so strong in and make sure you have everything in place before you launch. If you are not technically minded then read reviews on things like webhosting and make sure you get an online set up which will meet your business needs perfectly. Have your finances straight too – you don’t want your business to impact on your home if anything goes wrong. To reduce the initial costs, it makes sense to shop around for business essentials such as professional antivirus software. Don’t make do with an out of date version, there are plenty of free antivirus applications available. Many brands, such as Kaspersky free antivirus, offer free trials, so make sure you test the software before you spend a fortune.

Working from home can be really rewarding and the best decision you ever made. It will allow you to achieve professional success but will not prevent you from enjoying all the important family milestones such as sports day and the nativity play. Sharing parental responsibility will also make for a more harmonious home life for all concerned and the result should be a happy family unit. Enjoy!

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Outsourcing for profit

September 9, 2011 By

The definition of business success? Income £1, expenditure 99p. Business failure? Income £1, expenditure £1.01.
Whatever your business, it’s the bottom line that tells you how you’re doing. And for many people who run small businesses, what creates the problem is spending too much.
If you hire staff, you have to pay their wages, spend money on providing a safe and healthy work environment, and even pay them for when they are on holiday. When you’re in a business that doesn’t have huge profit margins, your staff costs can be crippling.
So the wise solution is to get involved in outsourcing.
This way, you can hire people by the hour, and end their contract at a moment’s notice if things aren’t going how you would like.
You can pay people to just work on a specific project, like do research to find the best antivirus software for your company. If, for example, they are able to find free antivirus software that works just as well, then you’ve already recouped your investment.
There are various websites where you can register, for free, as an employer. You can post a job and within an hour you will generally find that people are starting to apply for the position.
It can be a job as simple as designing a logo for your business, or it can be one that lasts for months and includes various different tasks. But the advantage of using outsourcing is that you can cut down dramatically on your expenses.
For example, if you employed a British person to do a task it might cost you £100, but you could find that there are equally skilled workers in India, Pakistan or the Philippines who are quite happy to do it for £25.
It’s not without its potential problems – not least if the people you’re dealing with don’t have English as their first language – but with a bit of research and effort you should find it a profitable endeavour.

Filed Under: Business Development

Is Now A Good Time to Start A Business?

August 31, 2011 By

At first glance it might not seem like a good idea to consider starting your own business in today’s uncertain economic climate, however depending on the type of business and your own individual skills it could be a tangible option. During any depressed market there are always opportunities to be explored, and if you have recently been made redundant due to economic conditions with a redundancy payoff it may prove the ideal opportunity to give working for yourself a try.

If you have a business idea then the first thing to do is research the market and the competition in order to decide if it is viable, and ultimately as recession-proof as possible. One way to do this is to see what kinds of companies are thriving during the recession and whether your idea correlates. Then check whether you can actually compete in either price or service.  There’s no point competing with established antivirus software manufacturers, for example, due to the free antivirus downloads readily available.  If you don’t have a fully-formed business idea in mind then think around your personal skills and experience and try to apply that knowledge to industry sectors which are known to be doing well.

Once you have decided to take the plunge then make sure you set off on the right foot and represent your company professionally. Make sure people can find you and understand what you have to offer, via an effective marketing strategy.   It is almost mandatory to have a web presence nowadays, alongside directory and journal listings.

Use your existing contacts, and if any run their own businesses ask them to review your business plan and possibly mentor you. Take your time and get the required details in your plan right in order to get your new business off to a flying start.

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