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Friday, 21 August 2015

Remembering the 2008 Global Financial Crisis

Some financial analysts say that it was just a big failure in regards to mismanagement that was the cause of the 2008 financial crisis, yet, others state that it was more than just mismanagement. Regardless of what the experts say, the 2008 financial crisis could be considered as the worst cause of recession that made the overall economy of the United States plummet since the Great Depression of the 1930's. But what really caused it? A comprehensive view of the events that followed revealed that the it was caused by the bursting of the housing bubble. It can be recalled that during the early years between 2004 and 2006, that the U.S. Experienced a substantial growth in it's real estate industry that enticed potential home owners and borrowers alike to take out financial loans in relation to financing and mortgages. Complacency amongst financial institutions and loan providers were backed up with the expectation that there will a long term investment growth in regards to the loans that were financed and that these same loans were sold off to bigger investment institutions that sought to capitalize on the continuing demand for such financial loans.

Another aspect of it involved the lack of financial credit scrutiny in which most of the financial companies that approved these loans were not very particular in regards to fully instigating a detailed background check on all of the loans that they approved. There was a general majority of these financial institutions that often disregarded bad credit records of the applicants involved that they quickly set aside the consequences of of the possibilities their loans to be called in. The bad perception of the fact that they were really expecting the continued escalation of the housing industry pricing was one of the least causes, added to the lack of substantial capital holdings of banks and insurance companies to secure their financial commitments which resulted in selling off their security mortgages to bigger investment companies at that time.

Given these conditions, the financial housing industry was slowly experiencing a steadily rising default rate on their mortgages and loans, as housing prices began to increase, which eventually affected the adjustable rate mortgages (ARM) causing borrowers to default on their loans. Unlike other countries that go through such financial turmoil, the United States capitalized on other countries financial woes as it buys other countries debt-financed mortgages and securities. The Russian and Asian financial crisis of 1997 and 1998, gave the United States a large influx of foreign funds that became the major capitalizing source of their housing industry boom. Another cause was the undeniable fault of the financial institutions that gave out and approved of such loans, taking into lightly consideration most loan applications that were highly irregular as to the capacity of the individual to fully comply with completely paying off their obligations.

Sometimes, it all points back to making accounting mistakes and the question of how to become an accountant. Over complacency of favorable financial conditions may well be the reason for this financial crisis and disregarding protocols such as strict loan and mortgages applications may well be the financial institutions fault. Loan financiers were so optimistic in regards that whether or not the loans were to be paid or called in to default, they thought that they can securely resell it to other financial investors and even gain a profit from it. Unfortunately, things never turned to their favor as the companies and institutions that bought and repackaged the loans, called it in, forcing many individuals and companies to default on their loans.

It became a spiraling effect, plugging the economy of the United States that affected the whole world as international markets who's dependency on the dollar found a decrease in the overall productivity of the U.S. Economy that led thousands of people jobless and many businesses to fold shop. As of date, the United States Congress has enacted certain guidelines to ensure that the devastating effect of the 2008 financial crisis should not be repeated again, as imposing stricter regulations in regards to loans and mortgages applications. Credit and financing protocols had been instigated calling for a more stricter compliance that will protect both borrowers and financial loan providers in the event of something like this should happen again.

Why Some Products are not Selling On-line?

Some of you by now may have bought an item through an on-line store that sells a lot of different products, and you may have set a decision to buy a particular item but for some apparent reason, chose another product instead. This is a common behavior of most people when deciding to buy something on-line. Most of the time, a consumers buying behavior is influenced by demographic reasons which abruptly changes the buyers decision in going through with their purchase. An on-line seller should be aware of a consumers habit as it is easily influenced primarily by psychological reasons and social preferences. For some reason, a potential customer may not find your product adequate enough for their needs, though it does attract them to it. Social demographics plays a big part on this type of behavior, particularly the middle class who tend to prefer more expensive or branded items. Preferential influences by friends, family members or social groups for that matter, have a big way of influencing or dissuading them to buy a particular item. In order to precisely determine what makes a particular customer buy a certain product, sellers must first find out a little about what a customer thinks about when going on-line to buy things.

Group Influence:

A decision to finally buy a particular product stems from influence, in which is balanced out with the practical needs of a customer. Nowadays, compulsive buying can not capitalize on the compulsiveness of people to just pick out a product because it entices their visual reference. Products today are influenced by the reviews that they get from customers that have bought and tried it out for themselves. This leaves the seller very little choice on the matter and will just have to rely on the product's worth of meeting up with a buyers expectation. Eventually, a product that earns an honest high positive feedback usually is the most salable item that will often influence other potential buyers to buy it too as a result of a positive feedback. General opinion does matter as people want value in what they buy. As a marketing propaganda by sellers that have a poor selling point because of obvious unfavorable reviews on their products, they will usually try to create their own influence group to upset any unfavorable sales effect. Things like offering discount coupons and credit vouchers to influence buyers to reconsider, thus triggering a compulsion to buy the particular product.

The Brand Mentality:

Seriously, brand references have greatly influenced people's buying habits ever since consumer marketing was conceptualized way back in the 1800's. Brand names sit on top of the consumer hierarchy as a basis of quality and durability. A good example would be that of the best vacuum for hardwood floors that despite their long standing reputation, may find competition with newer brands such as these. In todays Internet shopping market place, brand names still hold a strong influence in regards to people's choices over other products. These brand names have built a reputation for themselves even before the influence of the Internet came to be. Obviously, these well known products need not exert too much of an effort to promote their products on-line since they already have a reputation to back them up.

Regional Assessment of Customers Buying Capacity:

One possible reason why a seller's product is not selling in a particular area is because of the social behavioral factors in a certain demographic region. You can never expect to sell the same priced item that you get good sales when you are selling them in a city compared to that of the same priced item in poorer regions. To save yourself the effort, you can just simply pull out your item from that area and focus it in other places that may produce a better sales report for your company. There is no sense to force yourself to find ways in making people buy your products if they do not have the need nor the capacity to afford it in their area. People in such regions find only the basic commodities to be the most important things that they need to think about, as your products barely get their attention. Even if you do manage to make a few sales in this area, it will not even be a substantial amount to maintain any effective promotional marketing strategy and the effort and money that will go into such effort will just go to waste. It is best not to gamble on this kind of situation.

Shipping Convenience:

Probably one of the most influential reasons of why people don't buy from you or your products might be a reason of the convenience of having their purchases delivered to them. The convenience of a delivering system which should answer most customer's question on how fast or how soon can the product that they purchased from you arrive, how much would the custom brokerage and tax duties will they pay cost them or is then seller willing to add that amount of cost to the products delivery. Most of the time, customers back away from a sellers product because of this reasons. People want to get practical answers to practical questions in regards to getting some assurance that the money that they will pay the on-line seller will not be lost in transit in regards to the product that they bought. A seller must provide a very reliable delivery system that take away the inconvenience of taxes and other duties that a buyer will shoulder in order to receive the products that they ordered.

The Price Factor:

Price is always the primary reason why a seller will or will not buy a product especially if there are same products out there that have a similar comparative price range. This can sometimes throw the brand mentality right out of the window, as buyers will compare products from other similar products with varying price ranges that give the same functionality and quality.

Small Business Start Ups

Big companies have all started from small and humble beginnings and most of the time do not realize their potential. The only real reason why an individual or a partnership for that matter, ventures into establishing a start-up business is purely for profit reasons. Even these so called non-profit organizations have something to get from all of their effort despite providing any form of “social welfare” support for the community that they belong to as you can not continue operating any type of cause oriented organization with just hopes and dreams. Financial capitalization is the most important part of any small business start-ups including non-profit organizations.

In general, a business is there to make a profit, and the only way to know if a business is capable of making a profit from their endeavor is to take a look at their profit margin. Any significant movement in regards to profit is a clear representation that there is a need of the product or services that your company can offer to the public. If you want to have a good indicator that your business is surviving and doing well, you should be expecting a 20% to 30% growth in your profit margin within a year.

Most small business start-ups begin with you manning the helm and navigating your way on making your business run smoothly despite of a low turnover in sales. You should be nervous at this point as you have put in some if not all of your hard earned savings just to get your business moving. Your main focus at this point is to have the general realization of coming into terms with two aspects of what you are doing. First, you must realize that even though you have made ample studies of all possibilities of avoiding to loose your main focus on trying to make your business run properly for your sake and for the people that are relying on you to make it work. Secondly, don't divert your attention in exerting too much effort in making a quick way to increase your monthly sales and revenues. Too much emphasis on this aspect may derail your main objective in maintaining a steady flow of customers that you can easily maintain.

Always remember that the reason that businesses continue to exists is because there are people out there who have problems that these business have a solution to. It is just a matter of being to able serve the best possible solutions to the problems that people have which may come in the form of a product or services. That is why people are resolved to generate ideas to find solutions to those problems that businesses offer as a solution, and where one business fails to adequately give an answer to that problem, another steps in and offers a solution to it. People who seek answers to their problems are given an option to which they can conveniently select a solution of their choice in which they see fit.

So, how can your business stand out from among the rest who also offer the same thing as you do? An issue in regards to products and services that you offer to people is never remotely different from the one's that your competitors offer. How do you do this? Very simple, as saying “How can you make a better light bulb”, and they eventually did it! Having a foresight of your business can give you an advantage to others in respect to what you can provide to your customers, even though you all have the same range of products and services, you can make an extra effort in providing them with an added perk to the usual methods of dealing with them such as extending their credit line for regular customers, added terms of payments that may well earn you their loyalty and other types of enticing offers which were not given to them.

Such a matter of adjusting financial accounts of your valued customers would definitely mean adjusting your accounting reports that may affect your financial flow. Although it will take a good deal of financial adjustments, this will favor your customers a lot more than what they have hoped for and earn you a faithful following. For this matter, it is best to learn on how to become an accountant and to find out more, you can visit to learn on how to do basic accounting for your business.

Business problems are not really business problems at all but are in fact opportunities waiting to be discovered. A good example of a problem that turned out as a profitable solution is that of a man who has a job as a gardener. Since gardening jobs can take a toll on your back and cause such inconveniences as back pains, this gardener found a solution and invented a digging tool that does not cause your back to suffer as much as you would in regards to using a conventional shovel. He later went on and patented it and is now earning much more than he imagined. It just goes to show how trying to find a simple solution to your own problems can result in solving other peoples problems as well and even profiting from it along the way.

People who start up their businesses are often thrown off from their main focus of improving their business by trying to stay ahead of the other businesses that they are competing with. They spend too much time and effort in trying to out do the competition that it distorts their better judgment of balancing out the quality of the product or service they provide in consideration to their customers needs. Running a business is not a competition or a race as most people think but a real good entrepreneur thinks about how to better serve their customers first and foremost. Businesses should focus on personalizing their service with every customer that comes in and asks of a solution to the problem that they are having. Offering an answer to these questions may earn you a customers trust and they may even commend yo to others.

Things You Always Wanted to Know About the Credit Card

The term “credit” has been around since the concept of exchanging of goods and services was practiced by merchants during the early years of trade spawned our society for what it is today. Credit was a convenient method of how to sell goods and services without the need for the buyer to produce cash for a particular transaction. Nowadays, credit cards are used for these methods of “cashless” transactions that offer instant credit to the consumer without the need for bringing with them cash on hand. During the early days of it's existence, credit card holders would have to verify their identity, their billing address and the terms of payment that would be manually recorded by the receiving sales person of the business establishment where it was presented. This was a very time consuming method that created long lines when using this method. 

Nowadays, each credit card has it's own unique identification number that contains the complete details of the person who's account the credit card belongs to, taking away the need for writing down the details of the account and transaction that has taken place, making it one of the most convenient method of paying for products or services for that purpose. The first historically recorded use of the credit card was traced back to the 1890's in Europe. The first credit cards involved the merchants that were offering their products and services to their customers, as opposed to what is popularly practiced today by banks. Merchant were the first one's that issued credit cards to their customers and were very selective about it, often choosing their regular customers as a way of saying thank you for patronizing their establishment.
It later caught on in the United States during the early 1920's as business establishments such as oil companies and hotels began to formally offer them to their customers. It should be interesting to know that the first credit cards were not made of plastics but were originally made of metal in the form of coins or tokens. It then evolved using metal plates, celluloid (plastic films), fiber and paper. The very first bank issued credit card was issued by the Flatbush National Bank of Brooklyn. New York under John Biggins in 1946.
Biggins conceptualized a “charge it” method that was in principle, between the bank, it's customers and the merchants that were also holding accounts in the same bank and the surrounding areas near Brooklyn. The concept involved the merchants who had been depositing their accounts into the Flatbush National Bank included the particulars of the transaction of a sale that used the “charge it” method which included depositing the sales slip that the merchant and the customer had undergone the transaction. The bank, then issued a bill to their account holding customer to notify them of an outstanding liability that the customer who used the credit card was obliged to pay through the bank itself.
It was a generally easy and convenient method to consider that favored the particular customer that used the credit card, but underneath it all, was a fairly complex accounting process that had to be carefully worked out by both the bank and the merchants accountants. For more information on how to become an accountant or tips for accountants, visit
The credit card was a fairly new way of giving purchasing conveniences for people who had an existing bank account with banks who issue this new form of financing instrument as it was only limited to a certain point of use and only over a certain area in which merchants and banks could easily exchange financial information regarding a common customer. It was not until in 1950 that the credit card had found a new form of use in regards to paying for other services or products. The Diner's Club started to issue their own credit card which purpose was to conveniently pay for restaurant bills and other food related services. Frank McNamara, who founded Diner's Club, created a method in which a customer can conveniently eat at a restaurant that accepted a Diner's Club credit card. In return, Diner's Club would directly pay the restaurant, leaving the obligation of the customer to pay their outstanding liability to Diner's Club. This was technically a direct debit card since the credit card holder had to pay the whole amount to Diner's Club.
In 1958, American Express initiated the issuance of their first credit card which was soon followed by the Bank of America with their BankAmericard which is now popularly known as Visa. Credit cards found their popular national use through promoting it to traveling salesmen who often travel from coast to coast. It provided a means of for these traveling sales men to pay for their board and lodgings and even food while they were frequently moving from one state to another. The dawn of the 1960's saw more companies that offered the convenience of credit cards through mass media advertisements which gave credit cards the image of a time saving instrument rather than that of an instrument of credit, and it was during this era that American Express and MasterCard became hugely successful overnight.
The United States Congress began regulating the use and governing policies of the method of using credit cards. In the middle of the 1970's, Congress started to ban some credit card issuing companies that were intentionally mailing activated credit cards to people who did not even ordered or requested them, as it was insinuating a compulsive means to entice people to use credit cards that may eventually lead them to unnecessary incurred debt.

Things You Should Know About Personal Loans

There are different kinds of loans that people with an urgent need for money can apply for through financial institutions such as banks and other money lending services, provided that have something to offer in return as a form of collateral or any kind of assurance that they can give to lending institutions as to hold on to their obligations. There are however, some types of loans that do not need any form of collateral from it's borrowers, most particularly in the category of personal loans. Personal loans are general purpose loans in which the money that the lender approves you with is used on your own discretion. Actually, personal loans are more difficult to be approved upon by most lenders as it is often based upon strict requirements that most potential borrowers find hard to comply with. If you ever find the urgent need to apply for a personal loan with a banking institution or a lending company for that matter, it is best to know all the needed requirements in order for you to find out if you have a fair chance of getting approved.

Personal loans have no assurance of security:
Given the fact of the nature and principles that constitute a personal loan, it is in fact a loan that offers the lender no such form of security and assurance that a borrower would be able to comply with paying up their obligations to the lender. It also means that the loan in which the borrower would get upon their approval will not be needing any form of asset as a collateral, in which case that when a borrower defaults their obligation on a loan, the lender will have no assurances of getting back the amount that the borrower had availed. This is one of the reasons in why personal loans have a higher disapproval rate than any other form of financial loans. The lender usually recourses to reporting late or bad payments to the credit bureaus, hiring a certified collection agency to collect bad debts and filling legal lawsuits against borrowers who fail to comply with payments. Either way, such incidents will put a bad credit record on the borrower which will make it difficult for them to avail any form of financial loans in the future.
Personal loans have fixed interest rates:
Despite of the high rate of disapproval, personal loans are still the most favorable method of availing emergency funds for various uses as it has a fixed rate of interest compared to other conventional financing methods that have fluctuating interest rates. Personal loans can vary in amount from $500 to $50,000 dollars, which solely depends upon how good or bad your credit rating is. Having a good credit rating means that you are given the benefit to borrow an even bigger amount of money compared to other applicants that have a less favorable credit score. Some banking institutions have a minimum amount which you can borrow or you may even well be able to get an even higher loan amount at a bank that you already have an account with.
What's good about personal loans is that the contracted interest rates are fixed for the whole duration, until such time that you have completely complied with paying off all of your financial obligation to your lender. Again, having a good credit score would lower the rate of interest of the amount of the loan that you have availed from your lender. Interest rates is the cost that you pay for borrowing money from your lender, in which is how banks and lending companies earn from your need to borrow money, however, there are banks and lending institutions that adjust their interest rates as a means of appropriately anticipating the possibility of you failing to comply with your monthly financial obligations.

A Fixed Payment Period:
Given the fact that you have been approved because you have a good credit score, the bank or lending company will also try to determine the best possible terms of payment that will be based upon your capacity to pay and the amount that you would like to avail which will depend on the combination of how much you can pay and credit rating. Banks and lending companies have a fixed payment period which will give both the lender and the borrower both the convenience of time in regards to payment schedules. The most common payment terms have 12, 24, 36, 48 and 60 months respectively as the time frame in which the borrower can conveniently choose how long or how short they can comply with fully paying up their financial obligations. A shorter period of 12 months would mean a bigger amount in paying up the principle amount of the money that the borrower has availed, which would lower the interest rates accordingly. A longer term of payment would mean adjusting the principle amount of the money that the borrower has availed, but increasing the amount of interest. Since this will be a fixed rate of payment, any attempt to pay off the total amount of the money in advance, would incur a penalty in behalf of the borrower. It should be put to mind that banks and lending institutions would like to maximize the potential of the amount that a borrower has availed from them and even though a borrower would like to finish their loan obligation, even before the contracted time, the lenders will always earn from this in all possible ways that they can. It is also best advise to learn the basics of how to become an accountant in order for you to fully understand the accounting principles of evaluating interest rates in regards to personal loans.

The easiest way to apply for a personal loan:
To tell you the truth, personal loans are made for people who have existing credible accounts with any banks that can support their clients validity of having a verified account with their institution. The advantage of this is that you can loan a bigger amount of money that you can use for your own personal use. Lending institutions such as banks can easily approve anyone who passes their requirements such as being employed for at least 6 months, has a monthly salary that will not fall below 30% of the loanable amount that a borrower wishes to avail, has a good, clean credit record for the past 6 months and has no outstanding liabilities with any financial institutions. Banks and financial lending institutions do get a bit nosy sometimes in regards to the purpose of where you will be spending the money. If you will be very honest with your intent, they may even recommend some sort of special financial arrangement that may even help you with your loan application as to appropriate it with the purpose of your needs.

Guidelines to Setting Up a Small Business

Starting up a small business is a big decision that a person can make in one's life as it is not just a matter of gaining a self reliant means of earning for your self as a form of self employment but it also means putting on your shoulders a huge amount of responsibility in keeping your business as a useful establishment that serves the interest of the community that it operates on. A business does not necessarily mean that you have to put up shop somewhere in your locality, as anyone with a decent Internet connection can easily put up their virtual on-line shop that can sell items or services. Frankly, there are a lot of businesses out there, from across the world who have successfully maintained an active amount of customers through the use of the Internet alone. Regardless of how you want to start out as a budding entrepreneur, these are the eight basic guidelines that can help you cope up with the rigors of running your business on-line or otherwise.

Start With a Business Plan:
The basis of human society followed laws in keeping up with our social development and it is unlikely for us to reach this state in which we exist in our society if we did not have laws that are the foundation in keeping our social order. A business plan is a must, unless you want to get side tracked and loose your goals in running your business down to the ground. Business guidelines are critical startup goals that will ensure that your business can survive competition, create a customer base and make any future plans on improving your business endeavors.
Business Training:
In conjunction with starting up your business, whether that be on-line or setting up a real shop, getting the best type of training related to the field of business that you plan to establish has always been the best first step into knowing all the details on running it. Availing free information through the Internet has been the most helpful advantage since you can actually find answers and solutions to problems with the help of other people that have gone through similar problems that you are experiencing in regards to your business. Making viable comparisons to answers that were posted on sites can make you decide the best approach to make to improve your performance and knowledge as a budding entrepreneur.
Business Location:
In the case of establishing your business within the community that you are located, it is best to establish your capacity in regards to renting a place. Location has always been the prime concern of any one who wants to be a successful business entrepreneur. Choosing a heavily populated location that gives your business the amount of exposure that it needs to establish it's present in the locality in which it operates would mean that you have to spend a substantial amount of money, time and effort. Prime areas usually cost a high amount of rent, and it is best to balance out the nature of your business with your capacity to maintain rental fees to the projected sales of your business before deciding on where to start. It is however a different case when it comes to establishing an on-line business in which you can have the convenience of doing it in the privacy of your own home. Most businesses today go on-line just for the convenience of not having to pay rent. Although it may sound convenient, it does require almost the same amount of effort as that of a conventional shop based business. On-line businesses are more logistically based on electronic funds transfer and package forwarding activities for products being sold over the Internet. As for service oriented on-line businesses, they require a more human resourced management method of serving their customers.
Financing Your Business:
This is inevitably the very first obstacle that you must overcome. The hardest part of starting a business is finding the adequate amount of money to jump start it. Obviously, you may have already considered this predicament in the first place. The biggest question would be where would you find finances to get your business started? Give yourself a favor and try not to put too much trouble in trying to find money and start building up your business with whatever amount that you have at present. First rule in financing a small startup business is to start it up within your capacity. I knew a friend of mine how put up a small computer shop business, and I do mean “small” with just $500 dollars and an old Pentium II desktop. Today, he has 14 AMD dual core computers and is completely renting out a small place in which he also lives in. It just goes to show that you do not need a big amount to start a business and risk incurring debt just to pay of the capital you used to start it up. But if you are really gutsy and feel that you can cope up with recurring monthly payments which include rental and the initial money that you loaned, be my guest. In such a case, you should be very keen in keeping an eye on your expenditure and income as you need to be able to account for every cent that you earn and spend. Learning the basics of accounting skills can definitely give you a big advantage in keeping up with your business operations. For more information on how to become an accountant, you can visit
Determining the Structure of Your Business:
If you plan to establish a business on your own, it is best to know how you will introduce your business to the people that will be your potential customers. Basically, starting out as a sole proprietorship is the first step that gives your business it's identity to the public. Partnerships can also be formed with other individuals or other companies that have the same type of business interests like you have, and seeking out additional capital integration can benefit both you and your partners. Profit sharing on your company's earnings can be directly proportional to the total amount of money that you and your partners have invested into your business venture.
Registering Your Business:
In some cases, there are times that you need to comply with certain government policies of registering your business with your state government. This gives you the legitimacy to exercise your right to practice free and legal trade within the community that you belong. Being a legitimate business operator ensures your potential customers that they are dealing with an establishment that can competently provide them with the products or services that they seek. In return, your business is given the chance to serve these needs that people try to find and in doing so, slowly establish yourself the reputation that you need to create the prominence that your business needs in order to continue generating income based on the products or services that you provide.
Business Licenses and Permits:
Obtaining a business license and the needed permits to operate your business is an essential part of legally starting up your business unless you want people to call you a “bootlegger”. Legally complying with all necessary documentation is coming into terms with the publics trust on your establishment. No one trusts a business with questionable documents to begin with as there should be an uncompromising assurance that the public is getting the right quality of services and products that you have legally declared upon opening your business. Business permits and licenses usually have a year of validity before being renewed which give you as the owner of your business the option to continue registering your business for another year of operation.
Responsibilities of Being a Business Owner and an Employer:
Starting out as a small business owner may not take up that much responsibility yet as you just have barely got off to running your business. As time progresses, you will slowly see your business grow that it will eventually become a bit difficult to single handedly run it all by your self or with your partner. It will be necessary to hire some outside help that will oblige you to start paying salaries. Knowing your responsibilities as a business owner and as an employer will make things less difficult to manage especially when you need to know the boundaries of your obligations to your employees. Employees have been entitled to their rights on how you can appropriately deal with them accordingly with the proper working conditions within the agreed policies of your company which include providing them with the standard pay regulated as provided by the government and all benefits that are accorded to them that should be given by you as their employer.

Franchising Principles

What is franchising? Well, to sum it up, franchising is a business opportunity that lets you have a part of the earning potential of a well established business or a product brand that earns for itself without much effort on your part in promoting it. It combines the functioning principles of sole proprietorship with an established brand name or a company. Franchising is buying into the credibility of a company's reputation, giving you the chance to earn for your self the same amount of financial opportunities. Franchising can not be considered as an industry as most people think, but rather it is a method that can be applied to almost everything in every aspect of the business industry. 

Franchising falls on two categories, namely products and brand or trade name franchising. Basically, a franchisee buys into the rights of a name of a trade mark that gives them the rights to use it and eventually, earn from it as well. This type of franchising is called “Business Format Franchising”, which involves a working principle between the franchisee and the brand company or the product that has made an agreement with the franchisee, with giving a full range of support to them. These full range of support may include products, man power, marketing and sales support and other operations related interests that will help the franchisee to run their business accordingly to the policies of the franchisor.

The International Franchise Association stated that franchising is a means of effectively distributing products and services. The franchising system involves two sides, the franchisor, which can be a person, product or business entity that “lends” their trademarked product or services including the business system that they have efficiently used in promoting their products. There is also the franchisee who pays a fee or a royalty for using the franchisor's name brand and business operating system. This gives the franchisee the right to extensively use the franchisor's product, brand name and business system for their own endeavors and interests.

Franchising is a consolidated networking effort and succeeding on this venture, means that the franchisee must operate and maintain a profitable franchised business establishment for a long period of time, before fully benefiting from the franchisor's name and products. Franchising's appeal caught on to those people who found the opportunity to have control over the way on how they can make a difference for themselves in regards to planning their future. In the early days when franchising was still a young concept, it was considered as a way of business minded individuals to have an opportunity to buy their own job such as a home repair service or a small sandwich shop, enabling them to come in everyday and operate the business by themselves.

Today, franchising is now considered as one of the most profitable business opportunities that people can invest their money into, as there are no limits as to the number of franchises that you can buy as long as you have the money for it. There also have been new variations in franchising such as “Multi-Brand” franchising that deals with a whole assortment of products and services all under one roof. These types of franchising are exclusively given on an international basis in which other franchisees from other countries are given a distributing right for these products on a national level in which they are the ones who distribute it in their region of exclusivity. 

A franchisee is given the right to distribute and sell a franchisor's brand and product as long as they comply with the franchisor's condition on the aspects of exclusively using their products and re-supplying their inventories directly from the franchisor's distributor only. A franchisor may or may not provide the operational man power for the franchisees branch or establishment provided that the franchisee follow the business model that the franchisor has set as a standard operating policy. In regards to keeping tabs on the accounting side of the business, a franchisee can hire their own accountant to record all business transactions provided that it meets up to the standard working agreement with the franchisor's terms. Accountants hold a very critical position in regards to this type of business arrangements and tips on how to become an accountant can be seen here.

Franchising seems to be a fool proof way of earning compared to similar businesses that offer the same method, although some businesses do not guarantee any security in regards to such possibilities as bankruptcy. The earning potential that franchising gives it's franchisee's can only be realized after a few years into operation as the franchisor will eventually get a large amount from the loyalties for each month that you operate. This amount being taken from the franchisee can be justified as the franchisor will be the one who takes care of almost 80% of the operating aspect of the business such as advertising, promotion, product support, employee hiring and a few more other things. All the franchisee must do is look over the daily operation. 

Franchising fees may cost a few thousand dollars to as much as a hundred thousand dollars, depending on the brand or product that you wish to franchise. Added to this, monthly royalties may run from 5% to 8% a month with the addition of promotional costs such as advertising and marketing which may mean an additional 1% to 3%, bringing it to an average of 6% to 11%. On a legal point of view, franchisees do not own the franchise that they have bought but merely rent it from the franchisor. In return, the franchisor grants or awards a license that gives the franchisee exclusivity to use the franchisor's brand name and products respectively. 

Given this, they are allowed to manage and operate their franchise business without owning any part of the franchisor's assets. The only assets that the franchisee owns are their establishment and everything that they have capitalized for setting up their place of business. Franchisees can form their own associations that include other franchisees that are also part of the franchisor's coverage of exclusivity and can participate in a corporate wide decision making in regards to the franchisee's business interests regarding policy making decisions.

Thursday, 20 August 2015

The Principle Behind Hard Money Lending

Capitalizing on the money that you have earned and saved from working for a number of years might give you an instant gratification of achievement and a complacent sense of assurance that gives you a reason to just lean back and relax. For most people, saving up for their insurance and retirement benefit is a safe way of just living out the remaining days of their lives, never having to worry about running out of money to support their finances and needs. Some might even spend a little out of what they have saved, as they earned the right for all the hard work that they put into it. Yet for some, saving for insurance and retirement purposes may be a logical move in regards to assuring them of a secured future, but found a better way of investing it and eventually, earning more than the interest rates that any insurance or retirement benefit policy can offer.

Although it does have risks like any other money related investment plan, venturing in any form of money lending financial business has a lot to offer in regards to a bigger potential of earning more at a shorter possible time. Hard money lending involves hard assets such as real estate and vehicles as a collateral in exchange for the amount that you will be lending the borrower. There are two methods in starting out with this, one that involves your own money and another that involves other investors. If you think that you have the sufficient financial capabilities to undergo this kind of money lending endeavor, it is best to know the details on how to go about diversifying your funds for this undertaking.

Your First Borrower:

For your part as a private lender, finding people in need of money is the least of your concerns as there are a lot of people out there trying to find someone who is willing to lend them money. As a lender, all you have to do is to give out the money to your potential borrower and wait. There are some important things to remember when lending out your hard earned money to people that you do not know. There should be some sort of collateral involved between you and your borrower which can be a vehicle or a real estate property. A contract of terms of agreement and conditions should be drawn up and filled in the presence of a public attorney which should be notarized in the presence of both parties. As for the collateral is concerned, any form of real estate property or vehicle that the borrower is willing to subject as collateral should be free from any liens and encumbrances. Any form of acceptable collateral should not be under any outstanding and existing obligations prior to acceptance it in which you can hold the borrower to their obligation to comply. A foregoing contract of an agreement to sell should be made and signed in the presence of a notary public in case the borrower defaults on their loan, giving you all the legal right to claim their property or vehicle.

The Legality of Lending Money on a Private Capacity:

There are some cases that private practice of lending money has sometimes caught the attention of government agencies, particularly the IRS (Internal Revenue Service). Giving a full description of your purpose of lending your money on a private capacity with the IRS might ease off a little bit of tax obligations on your part as some consider the act of lending money a tax deductible activity on your part and is considered a social welfare initiative that promotes social development in your community. You might incur some amount of fees on your venture in lending out money, but knowing the IRS, it is far more better to proclaim your outright intentions than be penalized for hiding it from them. Applying for the proper tax adjustments on your part would make things convenient rather than hiding it from them. Since you will be earning interest from the money that you lend your borrowers, it is just the right thing to do to let the IRS know your intentions, considering that you will earn more from the interest alone, much more than letting it sleep in some insurance policy or retirement plan.

Tendency to Become a Loan Shark:

Money is hard to come by and you know as well as I do that it is very hard to find people and lending companies that are more than willing to lend you the right amount of money that you desperately need. Most private lending companies know the disparity of such a need that they impose high rates of interest on the loans that they lend to people that it is sometimes more higher than prevailing bank rates. The trouble with conventional financing institutions such as banks is the strict requirements that they impose on their borrowers such as a good credit rating and other related information regarding your capacity to pay. This is a way for banks and other lending companies to reduce the possibility of making the mistake of appropriately giving out loans to people who can not comply with making regular payments with their obligations. That is why alternative means of lending out money by private individuals became a more preferred method as it only requires a very minimal amount of requirements in regards to applying for a loan. The convenience of not having to undergo numerous paperwork and other obligatory verifications justifies a private lenders often times more higher and barely reasonable interest rates and terms, but since there is nowhere else to go, you inevitably give in to that choice.

Basic Accounting:

As a private lender, it is best to know a little bit on how to become an accountant, and for more information, click here. Learning the basics of accounting will help you run your finance properly as you deal in calculating the appropriate interest rates that you will be giving your borrower. Always remember that interest rates are important because this is the amount of money that you earn from lending your own money. Keeping a constant and reasonable interest rate is one of the key secrets of being able to earn from this sort of business. Potential borrowers are often repelled by high interest rates that most private lenders impose on them. Keeping your interest rates reasonable along with reasonable payment terms can lead to these borrowers to keep on coming back to do business with you. Since there is not that much effort on your part as a lender and that there is a collateral on the borrowers part, it is fair to say that you can earn a reasonable amount of interest from the money that you saved by just waiting for the interest to come in as your hard earn money earns for itself.

Coping Up With Unemployment

It seems to be that after finishing your studies in whatever collegiate endeavor you have chosen, finding a job should be your ultimate goal on putting an absolution for all the years that you have struggled in studying. Though sometimes, your expectations fall short as you soon realize that there are a thousand others like you who are also waiting for that same opportunity to prove themselves worthy of the education that they have acquired. It is a common goal for anyone who has finally finished their studies to look for a job, and with the knowledge that they have learned, finding one should not be a problem. Unfortunately, reality steps in to make you see the bitter truth of what life has in stored for you, and many others like you who are vying to find employment in any possible way imaginable.

Unemployment has been a big problem for a lot of countries, not just for developed ones, but even worse for under developed ones as well. Every year, unemployment statistics swell in figures that appear to have no chance of ever improving. This means that not everyone will have a chance of practicing what they have learned and in some extent, will not be able to find a job that they have aspire to attain. Statistics show that for the past recurring years, there had been a rise in informal educational systems that specializes in vocational and technical skills. These educational alternatives from formal fields of studies, have a even bigger chance of of student in finding employment.
Technical courses such as auto mechanics, electronics and computer related courses that are aimed in repairs and other technical aspects of skills application, are in demand in a global scale. This does not mean that people had chosen the wrong field of study or that they should acquire additional skills in order to fall back into an alternative means of finding temporary employment while waiting for the perfect opportunity of landing into a job that they so badly need that fits the kind of education that they had learned. In a certain point, does not seem to be a bad idea. Given the fact that you can not find a suitable job that fits what you have learned, maybe it is time to try out a different approach.
Learning new skills are very easy nowadays, especially with the availability of the Internet in regards to all the free information out there. Being choosy of what you want to have as a job is your privilege and deserves your acknowledgement, but being stuck in a point of your life where there is no opportunity to have a job that you really want should give you a reason to at least reconsider your tuitions in trying to find a viable solution on how you will cope with surviving the fact that you have no job at all. Doing things you like are obvious signs that besides what you learned from your education, there are some things that you are naturally good at. Developing other skills may well lead you to improving these abilities that may one day help you overcome the problem of being employed.
There are a lot of professionals out there that do their jobs just for the sake of doing it and a means of providing themselves a way of earning their keep. But they also have other skills that they are equally good at, that was developed by just a manner of personal interest such as hobbies. Some even had the time to even earn from their interests and hobbies. Being tied up to a job or the lack of having one does not mean that you have to struggle in learning to cope with your situation. You can learn new things that may even be the solution to your problem of unemployment, as it is just a matter of pursuing it on your part.
Sitting back and doing nothing and just waiting produces the same thing, nothing. Try to learn a new skill that you feel that arouses an interest on your part. If you have inclinations of wanting to learn things that involve mechanical machinery or other related disciplines, then by all means, you should pursue them at your most convenient effort. You can even learn how to fix vacuum cleaners, particularly, the best vacuum for pet hair and if you want to know more about that, you can just click here. You should never consider learning a new skill as an insult to what you have worked hard in regards to what you have studied, but better yet, as a challenge for you to learn new things.
Just consider your present situation as some sort of waiting period, a chance to reassess the direction where you want to go in life. You can even consider it as a new way of learning the true meaning of what life is all about, and keeping a positive out look along the way. There are a lot of jobs out there for everyone that knows what situations they might encounter that may turn their struggles into an opportunity to become better at what they do without them knowing it at first. Sometimes life does not turn out as what we might want to expect it to be, but that does not necessarily mean that we have to take every bad turn that we encounter as it is. Everybody deserves a turn for the better and it is just a matter of time before we get on top above everyone else as they roll back down to where you came from.