Posts Tagged ‘investing’
A business plan has the following advantages
It helps to convince others of the planned projects: If someone has worked out a business plan, one can assume that he is intellectually engaged intensively with the project and has the serious intention to implement the project.
It is essential to raise capital: Without representation of the economics of the concept, it would be extremely difficult to attract investors.
It offers the opportunity for success: The plan is the starting point for each controlling. Each step can be retraced. Any deviation requires an evaluation and possible adjustment of the plan. Imbalances at an early stage, appropriate measures are taken.
He forces us to systematically approach: When creating a business plan, the author is forced to think through everything logically and systematically. Knowledge gaps are visible. Problems are identified. Decisions must be made. It must be considered alternatives.
It gives an overview: The finished business plan pieces together into a whole. All parts must fit. The dimension of the proposed project is visible.
It increases the chances of success: A nobody would begin construction without a blueprint. This means that a per-elaborated business plan makes the implementation of a business idea very much easier. That increase the chances of success by creating a business plan, is now confirmed by the practice. Because a faulty plan, serious deviations from the plan or a non-existent plan is the most common causes for the failure of an establishment in Germany.
It helps to better assess risks: The implementation of a business idea is always associated with risks. Risks may arise within the company itself or from the market. Risks can not be excluded. But careful planning and an awareness that in one case or another there is a risk, mitigate the negative consequences of declining significantly. Identified risks can be mitigated or eliminated, for example through financial reserves.
It helps identify dependencies: Even if a business plan is divided into separate modules, so it is important that all the chapters fit together content and the project is consistent. Make statements to the target group have an impact on the marketing plan. The communication plan must deal with corresponding figures in the budget are back. Planned revenues affect the capital requirements. If the business plan is completed, it becomes clear whether all the chapters fit together at the end of a business plan.
Performance measurement is an analysis of data and control for the company. Performance measurement used by companies to make improvements on their operations in order to compete with other companies. For investor information about the company’s performance can be used to see whether they will maintain their investment in the company or find other alternatives. In addition measurements were also performed to demonstrate to investors and customers or society in general that the company has a good creditability (Munawir, 1995: 85)
Performance measurement is defined as “performing measurement” (performance measurement) are the qualifications and efficiency of the company or segment or effectiveness in the operation of business during the accounting period. Thus the notion of performance is a formal business enterprise carried out to evaluate the efficiency and effectiveness of corporate activity that has been implemented in the period of time
certain (Hanafi, 2003: 69). In his book, Halim (2003: 17), entitled “Investment Analysis” mentions that the basic idea of this fundamental approach is that stock prices are influenced by the performance of the company. If the company’s performance is good then the business will be high. With high business value to the company’s investors look to invest their money so that it will increase the stock price. Conversely, if there is bad news about the company’s performance, it will cause the stock price declines at the company. Or it can be said that the stock price is a function of firm value.
Be careful with fresh money you have. Once he was out of cash your business. You can never predict when he’ll return.
Even the opportunities that look very nice though. In fact it is not easy to get it. “
As we discussed earlier, that all business start-up at all do not have enough income from their sales. As a new player, they do not have customers in sufficient quantities, which can guarantee a regular income for them in large numbers. Likewise with your new business.
In conditions like these are still very critical, a new business you will need a reserve fund in a very large number. Even bigger than you ever planned before.
When you start a business, here would be Murphy’s Law applies. That everything that has your forecast and plan. Everything will take 2 to 3 times longer to be in reach. Likewise with the funding requirements in make it happen .. You would need 2 to 3 times more than you ever forecast and plan ahead.
Therefore, it is not wise if you spend new funds you have on your business inception. It is precisely in order not to make the money grow. But it is allocated to inventory holdings company that has nothing to do with selling such an expensive office rental, office furniture of luxury, service vehicles that have not really needed. Vehicle facilities for employees and all other expenses that have nothing to do directly with sales.
Typically, in starting a business. You use your savings or savings of the people close to you like a family or a loan from your peers.
They have taken the risk to lose their savings to lend their money to your new business. A new effort is still very risky to fail. A new venture in which the Bank was not willing to finance it.
As I mentioned earlier. Banks would only lend to a new business after seeing the ability of the business, in record sales during the first 6 to 12 months the business stands. And not when the new venture will stand.
Therefore, you must realize how very precious fresh funds in your hands right now to start a business. Loss of these funds, but will destroy your reputation and life, are also potentially damaging to your relationships with people you love.
Therefore, one of the most important tasks you as the owner of a startup business is, keeping your business fresh funds are very tight and be careful in spending it.
According to Brian Tracy, fresh money is the life blood of life for a business. If the business you run out of fresh funds into reserves, then the business is quickly coming to an end.
The core game of financial management activities of a business is. How to make all expenditures will always result in measurable revenue. Required payments strategy and allocation of funds to create new funds in a business continues to grow. And another great, not all marketing efforts costly. In fact, many efforts are very effective even with almost no cost.
Choosing Investments to Fit Your Needs
After studying the types of investment above, the steps you must do is know the benefits of all types of investment. Each type of investment has some distinctive characteristics, namely the potential yield obtained, the level of investment risk, investment time period of an ideal, easy to dilute investments, and the amount of capital needed.
In terms of ease to dilute the return on investment, asset financiaI easier to sell than real assets. While the terms of the investment period, investment in real assets and financial assets divided by 3 to suit your needs.
For your long-term needs, shares and property is the appropriate type of investment because it provides the potential for high growth in investment returns. Bonds are a suitable investment for your medium-term needs because it provides coupons regularly. Meanwhile, for the short-term investments, products such as savings banks are the most appropriate financial products.
Once you understand the benefits of each type of investment, choose one that best suits your financial needs time period. In addition, you should consider other criteria that you established to make investments.
Did you know The difference Saving and Investing?
Before knowing the types of investments, you should know first the difference between saving and investing.
Saving means setting aside your money without expecting an increase of the value of the money you save. By saving money in the bank, at least you know that your money would be safer than if you put it under the pillow. Indeed, if we see a glimpse, a variety of savings in the bank to offer interest on savings of 1-3% annually. However, if you notice, every year the prices of goods are always up to the percentage that far exceeds the savings interest you. If you are aware, the actual money you have been reduced in value.
Meanwhile, investing means expecting an increase of the value of your money over time, so it will benefit you. The money is expected to provide will increase in value is stored in a form called asset wealth.
Types of Assets
In investing, there are two types of assets, namely real assets and financial assets, which can both be considered as an investment vehicle in order to achieve your financial goals. In investing, you should remember that there are always going to risk losing your capital. Therefore, you must know the right assets you choose to invest.
Real asset is an asset that has a form. Examples are land, houses, gold and other precious metals. Investing in real assets is a common thing to do. For example, you buy a house, and then rent it to get a monthly income. Not to mention when the house was finished rented and the price goes up, you can sell and profit. You will get many benefits from investing in real assets, because even if the price can go up and down, but in the long term value is likely to increase.
Financial assets are assets that its form is not visible, but still has a high value. Generally there are financial assets in the banking sector and also in the capital markets, which in Indonesia known as the Indonesia Stock Exchange. Some examples of financial assets are money market instruments, bonds, stocks and mutual funds.
Money market instruments are short-term debt of less than one year issued by governments or companies. In return, you as a creditor will get some interest from the initial value of your investment. Generally, this interest will be paid at the end of investment period.
Examples of money market instruments are deposits, Bank Indonesia Certificates and promissory notes. In general, money market instruments have high levels of investment risk in the form of failing to pay the value of investments and the interest is very low.
Bonds are debt securities issued by governments or companies. Duration of debt on the bonds is more than one year. Bonds traded in capital markets. You are buying bonds will get rewarded with some flowers from the initial value of your investment, which is called the coupon. This coupon is usually paid every 3 or 6 months in one year,
Bonds lower level of investment risk, but the risk is slightly above money market instruments. The biggest risk faced by you as the bondholder is the possibility that the issuer can not repay its debts. Therefore, there are agencies that give ratings to bonds issued to find out how big the risk of default on the bonds.
Stock is proof of a person’s ownership of a company. People who own shares are entitled to share the gains the company, called the dividend, according to the percentage of ownership in the company. In addition, a company’s stock price will move follows the company’s performance.
If the company is performing well, then the share price will go up so that shareholders will benefit if you sell shares. Shares are also traded on the stock market and have a high level of investment risk, because there is a risk of bankruptcy a company so that your money can be lost.
In investing in stocks, you should find out if the company really has a good performance. You must do the analysis based on financial statements issued by the company, the country’s economic conditions, and other things that simply take up your time. But of course this is comparable to the potential gains.
Mutual fund is a container to collect public funds are managed by a statutory body called the Investment Manager to then be invested into other financial assets. The funds are deposited in a bank deposit with the custodian bank called.
Mutual funds are the solution for people who want to invest in many assets, but have limited funds. This is possible because the funds collected from many quarters large enough to then be invested in stocks, bonds and money market instruments in accordance with the policies of the Investment Manager.
In addition, a mutual fund is also an excellent solution for memilii limitations in knowledge and information in conducting investment analysis, as well as for those who do not have enough time to oversee the daily movement of stocks and bonds you. To find out more details about mutual funds, you can read the Mutual Fund & You.
Many people think that investing is simply to put money into a business in full swing and expect to get rich, or just go to a stranger and hope that the strange or the company will one day return their money.
Obviously, this is not investing but gambling. But this is worse than gambling, it shows a lack of respect for something that most people have devoted part of their lives, their sweat, blood and time.
To most people do not like working for people or companies unfair and despicable.