1. What I want to cover customer needs?

 Call it new business idea or business concept, the purpose is the same and have to be very clear from the beginning. A business, a company has to provide value to its customers, covering needs in exchange for paying a price. If your idea meets a real need, does not work. In this blog we have talked many times about the business idea, and as can be assessed . Always repeat that it is essential that an improvement contributions , however small, of what already exists. No need to invent a product like the iPhone to succeed, just a little bit better what already exists may be sufficient, but you have to make sure there is enough market for your project.

2. How much is the customer willing to pay for my product or service?

This point is very important. First, because in many cases the client, but appreciates the contribution of your concept is not willing to pay for it. On the other hand, if the customer is willing to pay something, it is normal to not want to pay as much as you want. Pricing policy, we refer to the article that we wrote a while ago about selling expensive or cheap .

3. How much does it cost to produce?

Once you have a better idea of the potential market and the price you could put your services and products, is a very important point: How much will cost to produce? Obviously, if you create a company is to make money, therefore it is essential you consider variable costs and fixed costs of your project, to get a first idea of profitability. If you see that it costs much more than you could sell your idea in principle has little future, but not discouraged, by focusing may otherwise be profitable. Often, entrepreneurs are guilty of greatness, and want to start with an extensive local and well located, several employees, new equipment, etc.. Approaches to make it very difficult big a project to be viable, because it does not hesitate: the cost will always be greater than what you’ve been able to estimate and revenues will be lower. It is better to start with humility and less spending.

4. Am I qualified for this business venture?

One of the major causes of failure of a business is that the promoter of this project is not qualified to lead it. It is therefore important to ask if you really honestly have the ability to turn the idea into success.One of the most important is to know the area where you work. The enthusiasm and interest in your project, although necessary, are not enough. Imagine that you have always worked in a bank and your dream is to assemble a chain of pet stores, because I love pets. As much as I do hope, if you have the industry knowledge and contacts, it will be impossible to succeed, but you’ll be very, very difficult. In this case it is better associated with one or several people that give you the look you are missing. To return to the example of the pet shops, if you read the interview we did long ago Kiwoko Javier Osa , see how the partners have completed profiles. 

5. The Business Plan

Once you have more defined your idea and your first estimates make you think that is viable, the real work begins with the business plan . You have to study in great detail commercial and financial aspects of your project. Answering questions as important as What you sell? What is your clientele? What are your competitors? It is important to be very concrete. Imagine that you are putting a bookstore. The answers to these questions can not be: sell books to readers in the neighborhood of X and my competitors are the Fnac and the House of Books. The generalities do not apply. I’ve only taken a small example of a fraction of the commercial studio business plan . There are many more aspects to be analyzed, but what I wanted to make clear is that it must be detailed and specific work. Starting a business is to compete, and you can not win with generalities. We must provide specific and explain clearly know. Or else, as I said Jack Welch, former chairman of General Electric: “ If you do not have a comparative advantage do not compete . “ The business plan will also define how you are going to work, which means that staff, in that place, etc. . It’s like a dress rehearsal for your company, with all relevant aspects. If you are choking, you can ask for outside help. 

6. The legal form

Once you have clearly defined your project, you must decide how you’re going to formalize. In Spain can be summarized in two major options (although there are more): autonomous or limited partnership .Simplifying, one can say that if you take a solo and the volume of benefits estimates will not exceed an annual salary of about 45,000 euros, the best thing is to choose to register as a freelancer. In case of further benefits, other partners, an important billing or legal structure itself of the company is relevant to your image (in certain circles, suppliers and customers will ignore you only if you have a society), then you better choose to create an SL ( limited), you can start with only $ 3,000 of capital. 

7.Funding

The business plan will determine how much investment you will need, and how much money you’ll need to cover more than certain losses of the first months (sometimes years). Then or already have the money (congratulations, you can start your project), or like most entrepreneurs, you have to get it.There are several sources of financing , from your own savings, money from friends and family, public subsidies , bank loans or equity investments in the company’s venture capital funds or business angels.

8. Partners

Another important aspect is whether alone or if you rush you with partners. This depends on your personal skills, your preferences and your needs. As explained above, if you lack knowledge (financial, commercial sector), you can come in handy to have a partner. But we also value your management style. If you prefer to work alone and you want to control everything, may be better to throw alone, but work alone is not easy . If you choose to associate, you must avoid the errors discussed in a previous article . 

9. The location

Where you go to put your business is always important. Clearly, if it is a shop, you’ll have to find the most appropriate, and never forget you have to go where the customers are not expect customers to go where you are, because for this type of business location is essential. Although I have no shop, there are other aspects to consider. Always have to get customers or suppliers, so being in a village 80 miles from civilization is probably not a great idea. Similarly, if you opt for online trading, you have to find a location that allows you to optimize your logistics. Find a local is not always easy , but finally everything is accomplished. 

10. Employees

Employees are your most important partners. They are the ones that offer your customers the best products with the best quality of service. You need to have them happy to work with you while you demand the best from themselves. Perhaps the first thing they have to explain is that you are not going to pay the salary, which is responsible for this customer, as well said Henry Ford . At the time to choose, think about what is best for your long-term company. It may be that at first you do not have money and want to hire unskilled labor for little money, but ultimately if your employees are not bad for you better than you. Always look for the best for each task . If there are people with much experience, commitment to young people with potential. Human resources are arguably one of the most complex issues in managing a business, because mandatory mixed emotions economic goals and preferences. But you learn a lot and fast. 

11. Suppliers

Undertake means learning to buy. If not careful this fundamental aspect, you can not provide the best services at the best price. negotiates always , and for several quotes for all relevant purchases. Try to build trusting relationships with your suppliers long term, because more than one occasion you may get some trouble (for example when you need a product urgently for your most important client).

12. Finding and satisfying customers

You have everything to get going, but you lack the most important: a client that you buy your products or services. And do not kid yourself, though you have a very visible local artery busiest pedestrian street will have to go look for your customers. You will have to advertise, suggest phoning your service or send your business on the town door to door. The blog readers know without a doubt the number of article published last year to give clues about how to find your first customers or how to increase your business sales . But not enough to find them and convince them. Quality must be met to become regular customers. It is important to measure your customer satisfaction and implement processes for continuous improvement. If you do it, so will your competitors. 

PURPOSE – FUNCTION

Like all businesses, the incubator has income and expenses.Consequently, financial management is to plan, monitor and control the incubator funds, whether from services as if they are provided by partners and investors. Must therefore include mechanisms that allow the incubator manager to know exactly the amounts available, needs and investment capacity. In addition, financial management should focus on attracting new sources of funding for the incubator.

STAGES – CRITICAL FACTORS

Good financial management requires design and use a series of documents for recording income and expenditure of funds in order to identify critical issues and investment needs. The following are major steps for the effective administration of the funds of the incubator:

1. Preparation of a data sheet for investment. It serves to gather information on uses and periods of disbursement of investment required to establish or develop the incubator. In order to get a good view of the funds required during the different stages of the incubator program, investments should be broken down into the following categories:

a) pre-operational expenses, disbursements prior to the opening of the incubator (which appear in the initial business plan);

b) Physical facilities: disbursements required for adaptation, construction and maintenance of physical facilities of the hatchery;

c) Equipment: expenditure required to purchase equipment to start and continue the operational activities of the incubator;

d) Overhead: as it involves investments, this item includes the initial costs required for implementation and opening of the incubator;

e) Reserves: These are the amounts saved to go constituting cash reserves.

2. Preparing a form for costs and expenses. It provides information on the uses and disbursement periods, separated in costs and expenses. To prepare, two principles should be taken into consideration:

a) The essence of the business: the company’s main activities, in which cuts could hinder their development;

b) The relationship between expenditures and activities of the company.

3. Prepare a spreadsheet for revenue. This should include all funds coming into the incubator, including their own income (services provided, fees, etc..) and third (provided by supporting institutions, development agencies and investors) .

4. The cash flow from the incubator. This form is fundamental to successful financial management. Must be linked to budget in order to monitor the financial performance of the incubator.

The cash flow concept is simple. The activities of a business involving income and expenditure. The projection of these variables on future liquidity generated cash flow or financial cycle of the company.

Despite the simplicity of the concept of cash flow, your application may pose some difficulties, from the following aspects:

• In a new business, it is difficult to predict what certain significant activities in terms of revenues and expenditures;
• It is difficult to predict the amounts of cash income and future expenses due to uncertainties in the projected scenario, and 
• It is difficult to quantify the impact on cash income and expenses due to business risks.

Through the financial planning we better manage our personal finances, and an improvement in our economic situation.

Let’s look at what are the steps involved in the process of personal financial planning:

1. Knowing the financial situation

The first step in personal financial planning is to know our financial situation.

To do this, it is best to resort to the use of two tools: the personal income statement and balance staff.

In the personal income statement detail our income (wages, business, investment, etc..), our expenses (food, education, services, etc..), and profit or loss (income minus expenses) we have obtained in a month, six months or a year.

While in the personal balance detail our assets (bank accounts, investments, property, etc..), our liabilities or debts (credit cards, personal loans, mortgage, etc..), and our equity (assets minus liabilities).

2. Analysis financial

With the information we have collected through our personal income statement and balance our staff, we analyze our financial situation.

For example, in our personal income statement, we could see that we are not generating enough revenue (for example, do not have enough sources of income), or we’re spending unnecessarily on some items (for example, under “Recreation”) .

While our personal balance sheet that we could observe few assets comprised of investment, or we have too many liabilities as consumer debt (for which, in turn, we are paying too much interest).

3. Setting financial goals

Based on our analysis of our financial situation, we now set our financial goals.

First we proceed to establish our overall goals (which will guide us to establish specific goals), some examples:
increase revenue streams.
reduce monthly expenses.
acquire more investment.
reduce debt.

And then, based on our overall objectives, we establish our specific goals (which, among other things, we can measure our progress), some examples:
have a monthly income of 5 000 for the next year.
reduce monthly expenses by 30% next month.
invest in a business before year’s end.
cancel the entire debt for the second quarter.

4. Develop action plans

Once we have established our financial goals, the next step is to design plans that will enable us to achieve those objectives.

For example, to increase our income, we could establish as plans to request an increase of soil, look for new employment, increase sales of our business, invest in the stock market, and so on.

To reduce our expenses, we could establish such plans unsubscribe from journals not usually read, stop buying coffee or cigarettes, eat more often at home, etc..

To invest in a business before year’s end, we could establish as plans get funding, make the necessary contacts, find a partner, finding a shop, etc..

To cancel our debts, we could establish as plans to cut our credit cards, consolidate all our debts, allocate a percentage of our revenues for the cancellation of debts, etc..

5. Develop personal budget

Once designed our action plans, the final step in the process of personal financial planning, is to develop a personal budget.

In our personal budget detail cash income (wages, business, investment, etc..) cash expenditures (food, education, services, etc..), and the balance (revenue minus expenses) we expect to have in the coming months of the year based on our financial condition and our action plans.

And finally, for a better personal financial planning, as well as personal budgeting, we could also develop a projected personal income statement and a personal balance projected, ie, an income statement and balance sheet as projects that would be for a date the future.

Want to build your own business but have not yet clear what the best options to invest your money? Do not know whether to buy a place or better to lease? Do not know whether to borrow or use all your capital?

Or perhaps the scenario is another, possibly already have your SME arms, but despite receiving profits, you have problems with late payments from some of your customers.

Maybe you made a bad planning on your returns credit , or you lack cash to expand your business.

There are many questions that await who starts, or is already in the midst of a company. Everything that is related to the economy of your organization must treat it with the utmost care, and be very clear what your best options.
For all your doubts are clarified, we present seven solutions to your finances as an entrepreneur.

1. Capital to invest: you always need to have a minimum of capital to invest. Some experts recommend that your investment is at least half of all the investment needed and do your company is solvent at the outset.

Note that even if you have all the money you need to start, experts recommend going to bank financing in the amount necessary so that the repayments can be absorbed without problems for the flows generated by the activity, maintaining part of equity capital as a cushion against possible needs circulating.

2. Problems of liquidity: an analysis of costs and expenses to see if there is a structural problem or a problem of collection management. You must adjust the pieces of your business to start generating enough profit and liquidity, and that seeking funding to improve your liquidity will only bring more problems in the future.

3. Solution to your debt: illiquidity before you can renegotiate your debt by changing the structure of it, passing from short to long term, therefore reducing the fee. You can also request a credit account, which is a short-term credit which the bank offers you the agreed amount on a credit account so you have it as you need it.

4. It invests in real estate: this option is one of the best you’re having a financial backing in case of need, but you might check if the financial condition of loans allowed to deliver a property as an alternative to paying rent.

5. Mortgage loans: it is advisable to ask for a mortgage loan to finance part of the purchase and do not freeze all equity that can be urgent and useful to the company at any given time.

6. Defaulters: action is needed prior to a new customer, such as credit reports, the volume of risk analysis / want to take credit for the company with respect to the potential client, the correct use of documents business to collect, document issuance proper invoice, the use of formulas to transfer the risk of default, with factoring, credit insurance, bank guarantee, and lead an effective monitoring system for collecting outstanding debt.

7. Excessive debt: this is known as leverage, and is to seek an increase in profitability in debt. It is advisable, when the cost of capital of foreign funds is lower than the returns you can get the business (ripple effect). This formula allows faster growth, since in the absence of own financial resources, external financing allows us to invest more in business and greater profitability.

Finance and Investment: Your party is proposing does one or more measures that will promote the development of the financial services industry in Canada?

Ted Menzies: We will ensure that the financial industry remains strong and vibrant and that regulation in this sense remains.

We will continue to ensure that problems with the U.S. housing market have affected the banks of the United States does not affect Canada. Already, we reduced the maximum mortgage of 35 to 30 years and we have ensured that the maximum amount of mortgage refinancing is only 85%. If people have problems with their mortgages, they will bounce off the banks.

Health Canada’s financial system is its stability. We worked with the G7 and G20 to ensure the stability of the global financial system. Thus, with our partners in the G20, we are implementing rules that promote stability of our banks. We want them to have the same rules as other international banks.

FI: Are you in favor of the adoption of a single securities commission in Canada?

TM: We believe that a national regulator is the right thing, but if the Supreme Court rendered a decision against us, we would not fight the court.

For several years, foreign companies approach us and ask us why we do not have a single regulator across the country. These companies have told us: “I would start a business in Canada and operating in all jurisdictions. “They have to pay application fees in 13 jurisdictions. They have forms to fill out separately in each jurisdiction. I talked to companies that have told me: “I have not come because in Canada, you’re the only country in the industrialized world that does not have a single regulator. “

However, we do not try to reduce the rules. We are not trying to add risk to investment. We try instead to foster investment. Several experts have argued that if we had a national regulator, we would never had to deal with cases of fraud to the Earl Jones or the setbacks caused by the Commercial Paper Asset-backed non-banks. A regulator could raise a flag against these assets. Moreover, we do not have adequate laws to prosecute Earl Jones of this world because we have 13 different jurisdictions.

FI: What is your position regarding the proposed merger of the TSX and London?

TM: The Industry Canada must determine whether this potential transaction meets the requirements under the Investment Canada Act. Meanwhile, the provinces review the transaction, but it would be inappropriate for me to comment further.

FI: The savings of Canadians is at an historic low. Do you think the government should stimulate savings? If yes, what measures are you considering?

TM: Because of the shared jurisdiction on retirement income, we work with the provinces, including Quebec, to create a new retirement plan at low cost. This will be useful for people without access to a private pension plan, or self-employed, can contribute to a retirement plan at low cost. Several insurers and banks wishing to participate in this measure.

Furthermore, in terms of savings account tax free, we will double the amount that Canadians can save each year, bringing it to $ 10 000. This will be done when the budget is balanced, which should occur during the fiscal year 2014-2015. To do this, we will not replace all employees who retire. We will reduce the size of government while making it more efficient.

FI: What do you do to improve the financial literacy of Canadians?

TM: We will call very soon a national commissioner of financial literacy that will work for the Agency of Consumer Agency of Canada to coordinate a plan of action.

We must teach young people the risks and responsibilities related to credit, credit cards, mortgages, how to manage daily expenses and plan for retirement. We will work with provinces to insert into the education system. For example, many do not understand what compound interest and its consequences, and we will ensure that this does not fail in their education.

We will also ensure that financial institutions provide information clearly and concisely in relation to contracts they are signing and its subtleties.