January 24, 2012 4:40 am
According to the U.S. Small Business Administration (SBA), only one out of every two new start-ups survives after the first five years of business. That means that half fail, many times due to financial missteps.
Cash flow is a major factor in a business' success. Regardless of its size, a business' cash flow drives everyday operations, expansion and purchasing power. As most businesses face continued unpredictability in the local economy, managing the ups and downs of cash flow can have a major impact on reaching future goals.
Few business owners realize what untapped - and often free - resources are available to help them manage finances and stimulate positive cash flow.
To help meet the challenge of effectively managing accounts payable and accounts receivable in your small business, here are five simple tips from the SBA:
1. Pay your company first. A cash reserve can go a long way in making certain that in times of low cash flow, you are able to continue day-to-day operations.
2. Create a budget and track expenses. Even if your business' profit is more than the monthly expenses, it's important to keep a budget and continually track monthly operating costs and income. Always knowing the state of your business' finances allows you to spot red flags and issues before they become unmanageable.
3. Don't let past due accounts slide. If you're having trouble with receiving payment, re-invoice three to five days after the account is overdue. The longer a business waits to get paid, the less likely they are to receive all of the payment or even get the funds.
4. Focus on your largest debtors. Invoice customers who owe the most first.
5. Consider giving a discount for paying within 20 days. Depending on the nature of your business, it might make sense to offer a slight discount for those that pay by credit or debit within 20 days of the invoice. In addition to cash flow management, financing can help provide business capital.
Understanding financial options can help manage everyday expenses and purchasing needs. There are three primary ways to meet financing needs:
1. Business loans. For businesses that meet all credit and financial criteria, a conventional business loan allows for an infusion of cash that can allow a business to expand, buy necessary equipment or meet cash needs. SBA loans can be a great option for many businesses. For information on SBA loans, visit www.sba.gov.
2. Credit card. A business credit card can be used for everyday spending and has a set repayment schedule.
3. Credit line. A credit line can provide cash in a crunch to help cover the cost of operating expenses, unexpected expenditures or the purchase of additional inventory. A line of credit is not the right option for the purchase of capital assets, which might be better suited for a business loan. A credit line is great for purchases that are too large for a credit card but are not large enough to warrant a business loan.
January 24, 2012 4:40 am
Deloitte LLP's annual survey of Gen Y consumers shows that their strong affinity for hybrid vehicles could make it the generation that leads us away from traditional gasoline-powered vehicles, according to Craig Giffi, vice chairman and automotive practice leader at Deloitte.
A strong majority (59 percent) of Gen Y respondents surveyed prefer an "electrified vehicle" over any other type of car or truck. Moreover, Gen Y consumers heavily favor hybrid gasoline-electric vehicles (57 percent) over pure battery electric vehicles (2 percent) or vehicles with a traditional gasoline-only powertrain (37 percent).
The annual survey, now in its fourth year, canvassed 1,500 Gen Y, Gen X and baby boomer consumers in the United States, as well as 250 Gen Y consumers in China and 300 Gen Y consumers in Western Europe. Deloitte conducted the survey in September and October 2011. It defines Gen Y consumers as those ranging in age from 19 to 31.
According to Giffi, Gen Y consumers may be the game changers in the United States because, at nearly 80 million strong, they are one of the biggest domestic automobile buying market segments and the largest consumer segment since the baby boomers. Giffi indicates that, according to projections, one out of four new automobiles sold this year in the United States, and 40 percent of vehicles sold in the next 10 years, should be bought by a Gen Y consumer.
From the study, Giffi found that Gen Y consumers are drawn to hybrids for several reasons. Most notably, fuel efficiency: 89 percent of Gen Y consumers are considering buying a vehicle that gets better mileage, especially true when gasoline prices rise above $2.75 per gallon - the median price Gen Y consumers see as 'fair.' Further, 49 percent of Gen Y consumers are willing to pay an additional $300 for each mile-per-gallon of improvement they can get out of a hybrid - only $50 less than the $350 mile-per-gallon premium that Deloitte estimates a hybrid vehicle currently costs compared to an internal-combustion engine vehicle.
Gen Y consumers also prefer automobiles that are an extension of their social-media and digital lifestyles. In-dash technology is the most important part of a vehicle's interior for a majority (59 percent) of Gen Y respondents, with almost three-quarters (73 percent) seeking touchscreen interfaces. Gen Y consumers also rank smartphone applications as highly desirable in a new automobile (72 percent).
However, Gen Y consumers also realize that this increased connectivity can create safety issues.
Solution: a vehicle that may compensate for the distractions that result from increased connectivity with ramped-up safety features.
January 24, 2012 4:40 am
The latest numbers from the National Association of Realtors® (NAR) show that existing-home sales continued on an uptrend in December, rising for three consecutive months and remaining above a year ago.
The latest monthly data shows total existing-home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.
Lawrence Yun, NAR chief economist, believes these could be the early signs of what may be a sustained recovery for housing. For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010. NAR President Moe Veissi says that the American Dream of homeownership is alive and well, and that more buyers are expected to take advantage of favorable market conditions in the coming year.
This could indeed be the case based on the latest inventory statistics. NAR reports that total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down from a 7.2-month supply in November. Available inventory has trended down since setting a record of 4.04 million in July 2007, and is at the lowest level since March 2005 when there were 2.30 million homes on the market.
"The inventory supply suggests many markets will see prices stabilize or grow moderately in the near future," Yun says. In the meantime, prices are ripe for would-be homebuyers. The national median existing-home price for all housing types was $164,500 in December, which is 2.5 percent below December 2010. Distressed homes - foreclosures and short sales - accounted for 32 percent of sales in December (19 percent were foreclosures and 13 percent were short sales), up from 29 percent in November; they were 36 percent in December 2010. All-cash sales accounted for 31 percent of purchases in December, up from 28 percent in November and 29 percent in December 2010.
Investors account for the bulk of cash transactions. Investors purchased 21 percent of homes in December, up from 19 percent in November and 20 percent in December 2010. First-time buyers fell to 31 percent of transactions in December from 35 percent in November; they were 33 percent in December 2010.
January 23, 2012 4:40 am
If the recession has caused you to fall behind on your retirement savings, you're not alone. Forty-three percent of Americans had less than $10,000 saved in 2010. However, if you are one of the 43 percent, even if you haven't saved anything at all, you can still retire comfortably regardless of your age, according to retirement planning specialist Derrick Kinney of Derrick Kinney & Associates.
"When you hear an expert in the media say you need $1 million to retire and you haven't saved anything at all, it can be very discouraging," says Kinney. "But your 40s through your 60s are the time when all the financial obligations associated with raising a family have decreased and you can finally focus on funding your retirement. It's the perfect time to play catch-up."
Kinney offers the following four tips for speeding up the process:
Step 1: Create a detailed catch-up plan. Determining the amount of money you will need in retirement can be difficult, says Kinney. You must factor in the inflation rate, your retirement age, the longevity of your retirement and your expected expenses, including your increased medical costs. For obvious reasons, calculating retirement income can get complex fast, but there are online calculators that can provide an estimate. Plus, there are some widely accepted guidelines you can use as a baseline such as planning to live on 80 percent of your pre-retirement income. After you have determined the estimated amount of money you will need to save, use that number to create realistic, yearly goals.
Step 2: Redirect spending to build your savings. Since you are beginning to save later in life, Kinney recommends you save 20 percent of your salary each month. Take advantage of online budgeting websites and smartphone apps that connect to your accounts and track your spending to determine wasteful spending habits. Cut out these habits and redirect the money to your savings account. Also, consider automatically directing any raises you receive to your savings account. You can't miss money you never touched.
Step 3: Invest wisely and max out your 401(k). After you have built up your savings, you will need to invest some of it to ensure future income. Yes, the market does fluctuate, says Kinney, but overall, it has a pretty good track record and still remains a good bet against fighting inflation. Begin investing by maxing out your contributions to your 401(k), 403(b) or IRA. Next, consider purchasing exchange traded funds (ETFs) or mutual funds. Make it a point to review your investments periodically to ensure they are performing to your expectations.
Step 4: Buy the appropriate insurance. Statistics show that nearly two-thirds of retirees will need long-term care either at home or through an assisted living facility and the cost can be upwards of $50,000 annually. To ensure skyrocketing medical costs won't destroy their financial security, retirees should consider purchasing long-term care insurance as well as health insurance, says Kinney. It's important to realize long-term care insurance does not cover the same day-to-day medical expenses that health insurance covers and if you retire at 59.5 you are on your own when it comes to providing health insurance. Retirees may also want to consider buying life insurance if they have dependents.
Following the above four steps can put anyone on the path to a more secure retirement, even if you're in your 40s, 50s or 60s.
January 23, 2012 4:40 am
More than 55.5 million Americans feed wild birds outside their homes every winter, according to a 2006 U.S. Fish and Wildlife Service survey. But according to Joe Kosack, a wildlife conservation education specialist with the Pennsylvania Game Commission, there are important steps to follow to keep your home, family and birds safe in the process:
- Place feeders near cover to shield songbirds from avian predators, but at least 15 feet away from windows and groundcover that roaming cats can hide in or behind. Most people who feed songbirds aren't in it to set the table for hawks and cats. So give some thought to feeder placement. Wild birds are counting on you!
- Windows can be as deadly to songbirds as predators because birds don't see glass. Therefore, it is important to move feeders away from windows.
- Identify which species you want to attract and then select the feeder and seeds/food you'll use to attract them. The three easiest ways to attract the greatest number of birds involve using cylindrical feeders – filled with black-oil sunflower seeds and/or thistle seeds – suet feeders, and ground feeding with corn, millet and black-oil sunflower seeds. This three-way approach will make just about any yard a food court for birds.
- Although some birds may become dependent on feeders, it likely won't be the only stop on their daily foraging route. Still, if you commit to feeding birds in the winter, it's best not to stop in the middle of the season. Those foods you've begun to provide help balance birds’ intense daily demands for energy to endure frigid winter nights and chilly winds.
- Keep your feeders clean so birds don't risk contracting diseases from contaminated seeds and fungus. The Game Commission recommends first cleaning bird feeders with soap and water followed by a solution that is one part household bleach and nine parts warm water. If you're not seeing sick-looking birds at your feeder, cleaning it once or twice a month is sufficient. Increase the frequency to once a week if trouble shows.
- Whenever you feed songbirds, there's always the potential to lure into your yard – and sometimes your house – critters you'd rather stay away, so keep a careful eye out for unwanted intruders. This includes black bears, deer, raccoons, squirrels and field mice. Black bears had a rough fall – acorn crop failure – and some may be more active this winter than usual. Suet and black-oil sunflower seeds would be very appealing to them. Raccoons also are partial to suet. Deer, on the other hand, can be drawn by shelled corn. So can field mice. Squirrels come to just about everything you offer.
January 23, 2012 4:40 am
If you’re like many homeowners, the start of the new year finds you ready to finally tackle those home-improvement projects that have lingered on your wish list. But where do you begin?
First, prioritize those renovations that will have a maximum impact, both in terms of aesthetics and investment values. Also prioritize the projects that will enhance the livability and enjoyment of your home.
Next, decide whether or not it makes sense to handle these projects on your own or call in a professional for help. According to the experts at Sears Home Services, while taking on home remodeling yourself can seem daunting , enlisting the right help can make the process simple and seamless.
Here are three areas of the home to put at the top of your list this year:
According to the National Association of REALTORS®, one of the best investments in a home is a bathroom renovation. Remodeling a bathroom that's more than 25 years old substantially increases the value of your home. While your bathroom may not need a complete makeover, updating cabinets, lighting, tiling or countertops can go a long way toward improving design and functionality. Or, consider a few quick fixes, such as a new towel bar, shower-curtain rod, robe hooks or showerhead.
The kitchen is the heart of the home. And kitchen renovations don't need to be dramatic to be impactful—updates such as new countertops, cabinets, appliances or flooring can all dramatically improve the kitchen. These improvements can also help yield increased functionality and space throughout the kitchen. For a simple refresh, homeowners can give their kitchen a new look by replacing the hardware on cabinets, painting or updating fixtures.
A great way to upgrade an area of your home and pull a room together is to install new floors. There are myriad options to choose from: carpeting, tile, laminate, porcelain or ceramic tile, vinyl or hardwood. Consult a home-improvement retailer or flooring expert to help make the best choice and to ensure proper installation.
January 20, 2012 4:40 am
As 2012 ushers in an improving, but still highly competitive job market, more workers may be looking beyond their own backyard for employment options. According to a new nationwide study conducted by Harris Interactive on behalf of CareerBuilder, 44 percent of workers said they would be willing to relocate for a career opportunity, according to a nationwide study by CareerBuilder.
At the same time, employers struggling to find workers for skilled positions said they are willing to pay to bring talent to their locations. Thirty-two percent reported they would be willing to pay to relocate new employees in 2012. Nineteen percent would be willing to pay a smaller first year salary in order to give a signing bonus to relocate an employee.
The national survey was conducted from November 9 to December 5, 2011 among more than 3,000 employers and more than 7,000 workers.
To help workers zero in on markets with the greatest demand for their skills and assess costs of moving to and living in a particular area, CareerBuilder launched CareerRelocate.com. Through this new site, workers can:
- Run a simple keyword or category search and view a map detailing where the most and fewest opportunities are for their line of work.
- View actual relocation opportunities in different cities.
- Learn what they would need to earn in order to maintain their current standard of living in another city.
- Research homes, property values, mortgage quotes, moving and storage costs.
- Tap into articles and advice on relocating and hiring trends.
While employers will move current staff and new hires for a wide variety of positions, the top areas for which they are most likely to pay to relocate employees are tied to technology and revenue-generation:
- Engineering – 30 percent of employers
- Information Technology – 23 percent
- Business Development – 21 percent
- Sales – 21 percent
- Financial – 16 percent
- Marketing – 13 percent
- Legal – 11 percent
The vast majority of workers who relocated in the last year – 77 percent – reported they were happy with the move and didn't regret the decision. Workers reported benefitting in the following ways:
- Made a fresh start – 30 percent
- Made new friends – 31 percent
- Had new experiences we wouldn't have had anywhere else – 29 percent
- Earning at a higher level gave the family more spending options – 27 percent
- Better long-term career opportunities – 22 percent
- Area is nicer and schools are better – 19 percent
Of those workers who relocated in the last year, 41 percent said their family didn't relocate with them and they have to travel to see them. Top challenges associated with relocating included:
- Cost of living is higher – 26 percent
- More stress on the family unit – 24 percent
- Difficult to make new friends – 18 percent
- Feeling homesick – 16 percent
January 20, 2012 4:40 am
Bloomberg BNA’s final fourth quarter Wage Trend Indicator™ (WTI). The forward-looking index rose in the fourth quarter for the sixth straight time, to 98.52 (second quarter 1976 = 100) from 98.36 in the third quarter.
"Barring any major shocks to the U.S. economy, we expect modest acceleration in wage growth during the course of 2012," economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA's WTI database, said.
Annual gains for private sector workers are expected to improve in 2012 from the 1.7 percent increase reported by the Department of Labor for the third quarter of 2011, but are unlikely to exceed 2.0 percent, as measured by the employment cost index (ECI).
Reflecting recent labor market conditions, four of the WTI's seven components made positive contributions to the final fourth quarter reading, while three factors were negative. Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the ECI.
Of the WTI's seven components, the four positive contributors to the final fourth quarter reading were job losers as a share of the labor force, reported by DOL; forecasters' expectations for the rate of inflation, compiled by the Federal Reserve Bank of Philadelphia; and the share of employers planning to hire production and service workers in the coming months and the proportion of employers reporting difficulty in filling professional and technical jobs, both tracked by BNA's quarterly employment outlook survey. The negative factors were the unemployment rate and average hourly earnings of production and nonsupervisory workers, both reported by DOL, and industrial production, measured by the Federal Reserve Board.
January 20, 2012 4:40 am
As federal regulators consider setting down-payment standards on new mortgages, a new study shows such rules could push 60 percent of creditworthy borrowers into high-cost loans or out of the market altogether.
A proposal by regulators to define a high-quality mortgage as one with at least a 20-percent down payment, or possibly 10 percent, would hobble a healthy segment of the housing market, says the study from the UNC Center for Community Capital and the Center for Responsible Lending. While higher down payments do result in fewer defaults, the payoff is small relative to the number of creditworthy households who could be shut out of the market, the study shows.
According to the study, the results are particularly striking for African American and Latino homebuyers. A mandatory 20-percent down-payment requirement would exclude about 75 percent of African American and 70 percent of Latino borrowers who could be successful homeowners from obtaining fairly priced mortgages.
The working paper, "Balancing Risk and Access: Underwriting Standards for Qualified Residential Mortgages," was produced by the UNC Center for Community Capital and the Center for Responsible Lending. Researchers look at mortgages originated from 2000 to 2008 and what would have happened if a 20-percent down payment and other underwriting criteria had been imposed beyond those already mandated by the Dodd-Frank financial reform law.
The study finds Dodd-Frank's ban on loans with the highest risk of default—for example, those with prepayment penalties or no income documentation—fixes the bad underwriting that caused the housing crisis. Adding a down-payment threshold set by the federal government would do little to reduce defaults relative to the large number of creditworthy homebuyers it would push from the market.
January 19, 2012 4:36 am
Connecticut-based DiversityBusiness.com recently announced the results of its online election designed to determine the 12th annual “Top 50 Organizations for Multicultural Business Opportunities.” Over 1,200,000 diversity business owners participated in the poll to determine the top 50 organizations for providing business opportunities to diverse business owners throughout the United States. AT&T, Wal-Mart, and Dell nabbed the first three spots.
The complete list of winners, known as the “Div50,” are recognized for truly differentiating themselves in the marketplace in a time when diversity is on the rise. The Div50 is a listing of the top 50 corporate and organizational buyers of diversity products and services throughout the U.S. It represents the voice of over 1,250,000 diversity-owned (women, African Americans, Hispanics, Asians, Native American, and other multicultural groups) businesses in the U.S., in sectors such as technology, manufacturing, food service and professional services. Other large companies at the top of the list include Coca Cola, Cisco, Apple, Toyota, Office Depot, Time Warner, United Parcel Service, State Farm and Northrop Grumman.
The Div50 is an indicator of which organizations provide the best and the most business for diversity-owned companies. As multicultural and female owned businesses gain more buying power and their lifestyles become more affluent, multicultural markets are growing in economic muscle. This in turn attracts more corporations, as they compete for market share. The Div50 list has, therefore, become the consumer guide for many women and minority consumers.
The complete list of Top 50 Organizations can be accessed at: http://www.diversitybusiness.com/Resources/DivLists/2012/DivTop50/2012Div50C.htm.