Small Business Blog

Market Failure
Market failure when a big project is not affecting everyone but only a few. A private firm would only look at profitability and related market prices to take up a deal but the government has to look at other factors. To determine the social cost in case of market failure and when market prices are unable to define them. These social costs are called as shadow prices.

Savings & Investment
Impact of the project on general savings and investment level. A project that induces more savings are investment in an economy and not the other way round.

Distribution & Redistribution of Income
The project should not lead to accumulating income in the hands of a few but, it should equally distribute the income.

Employment and Standard of Living
How a project affects employment and standard of living will be taken into account as well. The deal should lead to increase in employment and standard of living.

Externalities
Externalities are impacts of a project which can be both harmful and beneficial. Therefore, both the effects are to be assessed before sanctioning a deal. Positive-externalities could be in the form improvement in technology and negative-externalities could be in the form of increase in pollution and destruction of ecology.

Taxes and Subsidies
In a general cost benefit calculation, taxes and subsidies are considered as expenses and income respectively. Though in case of social-cost benefit analysis, taxes and subsidies are considered as transfer payments.

Here are some sources: •Life Insurance Policy
•401 (k) plan
•Friends and family
•Credit cards
These are all potential sources that can be tapped into to fund your business. In doing so, you will become your own bank. This will give you full control over your own money. And this control is the very thing you wanted in the first place right? That’s why you chose to become an entrepreneur! If you do have a life insurance policy, then you can now put it to work. Though it sounds weird, think about it – a life insurance policy will provide money to your family and spouse in the vent of your death. What most people don’t know is that you can actually borrow against the cash value of the life insurance policy and then pay it back at flexible rates, on your own terms.

Next, you have the 401 (k) plan from your previous employer – all those monthly statements that you filed away so diligently but never cared to even look at. This is also a great source to fund your business with. Though the whole concept of borrowing money from friends and family to start your business may sound like a simple one because you already have an inbuilt level of comfort and trust with them, you need to understand that there are many risks involved as well. If things go smoothly, then you’ll probably the Donald Trump or the entrepreneurial king of your family or your friend circle. But, if your business goes down the drain, then it will put stress on the relations you had with those closest to you. So, is this risk worth taking?

Now, take a long hard look at your credit card. The one that you used to buy that dinner, your computer, and those new shoes – yes this credit card can help you get your business off the ground. If none of these resources work for you, then you can always take the traditional route and opt for bank loans.

Which Business Loan to Take?

Here are the different types of loans:

Long-term loans are probably the most common types of loans available. These loans can be used a working capital funding source and you can repay them on a monthly basis over a term agreed with your bank or financial institution. Read the rest of this entry »

Do Your Homework
Making a sale is all about tapping the right sales channels and reaching your target group of buyers. Before you can sell a piece of commercial property, you need to do your share of homework and research. Firstly, study the commercial property you plan to sell. It may be a shop, office space or a piece of land, which is ideally suited for a commercial complex. Make a list of pros for a buyer, who would buy it and also list out the cons. Consider the location of your property and identify the niche businesses that could take advantage of such a commercial space.

If it’s a shop in a business district, would a fast food chain be interested in buying it or would a clothing brand prosper there? Thinking on these lines will help you decide your marketing strategy to reach niche buyers who would be interested in it. Make an information brochure with all the details about the property, including square footage, amenities and the nearest landmarks to its location. Lastly, you need to research the real estate market prices in the area, which will help you determine what would be a reasonable price for the property.

Advertise in Newspaper Classifieds
One of the best ways to get the word across about your commercial property is to advertise in a newspaper. Provide all the vital details of the property along with the location details. Let the advertisement be well designed and have a catchy line like ‘Ideal Space For a Boutique’ or ‘Prime Location For a Fast Food Joint’. This advertisement will definitely get you some serious inquiries. Expect a lot of calls and arrange for somebody to take them for you!

Post Ads on Real Estate Portals
Another way of advertising your commercial property on sale is to post information about it on real estate portals that have a national and international exposure. Provide detailed information about the property site, along with photos, with contact details. This is bound to generate a lot of inquiries.

Publicize Through a Sales Billboard
One of the most conventional ways of advertising your property is to put a ‘For Sale’ billboard near it which can catch the eyes of people visiting the area. You will be surprised to know how many properties have been sold through inquiries generated through simple bill boards.

Create a Brochure and Pamphlets
If you want, you can even create brochures and pamphlets which can be mailed to prospective businesses who might be interested in it. This can net in a lot of potential buyers from niche businesses. Read the rest of this entry »

Define-Measure-Analyze-Improve-Control, are the five basic steps that constitute the definition of DMAIC. As discussed in brief, DMAIC methodology is used to improve an existing and established business process and its products. Specifically, a metric measurement which is used to measure errors and defects. Each of this Six Sigma DMAIC model has an in-depth terminology entailing it and have an equally important role to play in achieving one specific goal; to improve the company’s overall business process and consumer demands. However, for accomplishing all of these business strategies it is good to have some tools and hints to fulfill it better. So let’s look into the details of Six Sigma DMAIC tools below.

Introduction to the DMAIC Tools

While this Six Sigma DMAIC methodology is considered as a road map to resolve a company’s problems and defects and improve it to the fullest, however, it is rational to have some iterative approach towards reaching this goal. Black Belts and Green Belts are the brand new Six Sigma DMAIC tools and techniques that is currently implemented in the market for effective results in business. Although the entire DMAIC model is all interrelated, at some point of time it can happen, suppose the stage of Analyze didn’t help the company to gather enough data which eventually didn’t solve the root of the problem, therein, the iterative method comes quite handy. You can anytime go back to the Measure phase and collect all the relevant data for a correct comparison and result. So, these tools and techniques literally help in critical correctness in each phase and bring out effective resolute outcomes.

Before discussing the advantages of joint ventures, let us first know how to start joint ventures. The first step in starting a joint venture is to ensure that you have similar ways of thinking and analyzing a situation as your partner. You should form an alliance with those who have the same thoughts and ways of working as you. This will definitely help minimize the chances of conflicts and difference of opinions in the later stages. You should also decide the mission, vision and aim of the joint venture company, to ensure its success. Read more on business growth strategies.

Signing an agreement or a contract is very essential in the formation of a joint venture. The two types of joint venture contracts are Incorporated Joint Venture Contract and Contractual Joint Venture Contract. In case an Incorporated Joint Venture Contract is signed between the two companies, a new company is created which contains individual shares or holdings of the members of the joint venture. In the case of Contractual Joint Venture Contract, the companies involved in the joint venture assist each other in their businesses, without the formation of an independent company.

Joint Venture Advantages

There are many joint ventures advantages which we shall discuss in the following paragraphs. To begin with, joint ventures help the two partners to expand their customer base. The companies can sell their products at a place, where they did not have any previous established business. Consider this simple example – a cosmetic company in Asia signs a joint venture with a Europe based cosmetic giant and they mutually decide to prepare products together and market them in both the continents. In this case, the Asian company will get the advantage of the already built reputation of the European company to sell its products in Europe and vice versa. This will help both the companies to increase their turnover and ultimately their profits.

The joint ventures advantages also include improved production and marketing strategies. The vision and way of thinking of the management of the two companies is always different. Thus, companies in a joint venture can get access to new and latest technologies for production by working together. Many times, a company can obtain raw materials and resources for increasing its production from its joint venture company. Companies in a joint venture always retain their individual properties, assets and holdings and this is definitely one of the greatest joint venture advantages. Read the rest of this entry »