Categories
Manage Finance

The Only Financial Services and Products You Will Ever Need

When it comes to financial services and products, it is very essential to find the best product that is suitable for you. These products and services have all different purposes and prices. Believe it or not, no financial service or financial products are free. The number one financial service that you want to take deep into consideration is perhaps insurance, but that is actually not my favourite. My favourite financial service can be found on the internet.

These financial services and products that can be found on the internet are seen as investment products by many people. This is simply because you are getting a return for your money. I also believe that it is an investment, but however it is classified as a service. I like this service or so called investment so much, because it fulfils everything, all financial services and products put together.

This financial service is usually in the form of an internet opportunity program. Even though it is in that form, it is regardless a great service. What I mean by this service being everything, is simply it will pay your bills, mortgage, pension schemes, and maybe every cost that you would otherwise would pay for using the bank. The best thing about this is that you do not have to pay back anything. It is like a business, some people treat this as a business because it is very simple and easy to remember. Having said that, you can correlate that as the answer to this article, the only financial services and products you will ever need is an internet opportunity program, or home based business, also known as services.

Categories
Manage Finance

Increasing Credit Union Revenue by Increasing Member Awareness of Investments and Insurance Sales

“Plans are only good intentions unless they immediately degenerate into hard work.” — Peter Drucker

Peter Drucker, the management guru, passed away in 2005. With his passing we lost a unique individual who made a significant impact on not just the American business landscape because the impact of his knowledge of business management was felt worldwide. He was known as the “Uber Mentor”

Drucker was not a big fan of planning for planning sake. He counseled his clients to get busy and implement the plan as the lead quote above indicates. He was also an advocate for learning from mistakes. He used to tell even the largest corporate titan, “What makes you think you’re exempt from the normal bumps and bruises of life? The question isn’t, do you make mistakes? It’s, do you learn from them?”

As we approach the second half of 2009 our focus will gradually shift to looking at next year and the upcoming planning process associated with 2010. We are working hard to make 2009 a successful year but simultaneously learning from the mistakes and successes of 2009 so we can finish this year in a strong fashion while laying the groundwork for a successful 2010. I am going to focus on a key strategic concept that I believe will play a big role in the growth of our credit union partners in 2009 and beyond. This concept concerns the credit union membership participation in the investment services program.

 

One of my favorite Peter Drucker quotes is as follows, “Innovation requires us to systematically identify changes that have already occurred in a business — in demographics, in values, in technology or sciences – and then to look at them as opportunities. It also requires something that is most difficult for existing companies to do: abandon rather than defend yesterday.”

One such opportunity involves looking at how we can expand the awareness of the investment and insurance sales programs (program) within our credit unions and thereby help more of our members achieve their financial dreams. Let’s look at the membership penetration opportunity.

According to the 2007 Callahan & Associates Credit Union Retail Investment Program Benchmarking Report the average financial consultant gross commission (GDC) was $268,296. The aggregate GDC per million dollars of share deposits was $888.00. The average number of accounts per financial advisor was 760. So from an industry perspective we could use such data to gauge our progress and to forecast our expectations for next year. The danger of course is that while benchmarking data is useful an aggregate approach takes into account programs that do not look like yours and therefore tends to skew the results toward those higher performing programs. So at face value you may determine that you are either above or below the credit union averages. At least it’s a good place to start. In addition we should factor in economic data into this “top down approach”. We need to have an opinion of how the economy will impact our members’ ability to achieve their financial goals. In addition your broker dealer should factor in how the economy will impact their ability to deliver the products and services to help your financial advisors solve your credit union members’ financial problems.

One such “bottom up” approach is to set a penetration or participation target. For example, if your credit union currently has a participation rate of 2% and your membership is 40,000 then you have 800 investment accounts. Last year your program generated $365,000 in gross dealer concession (GDC). If last year your penetration was 1.5% you moved the needle from 600 to 800 net new accounts. If you have 3 advisors on your team that equates to an average of 67 net new accounts per advisor. That is a pretty good increase. We would than take a look at how we did that and hopefully repeat it next year. Or better yet, now that our team is a little more seasoned, let’s move the needle higher say to 3.0% in 2010. That will be a net increase of another 400 accounts (assuming your membership numbers are static which I hope they are not and continue to increase).

These are net numbers so I am also assuming that we are doing a great job of retaining our existing investment clients. If not, the gross number of new investment clients needed will be correspondingly higher. We can then take the expected net new member client number, in this case 400, and multiply it by the average investment account balance for our credit union. Let’s assume it is $30,000. Let’s also assume an average commission paid on an investment account is 4%. So, $30,000 times 400 = $12 million in new investment dollars. Multiplied times 4% gives us $480,000, the projected revenue from new member clients.

In addition to the new member forecasted number, let’s assume you have an existing investment book of $50 million. What can you expect to generate from that book. Well, credit union programs don’t operate like a wire-house such as Merrill Lynch where the advisors are much more transactional because of the individual equity trading so as a result they might turnover their book at a rate of 1% each year. Our members typically have mutual funds and annuities in their portfolios which are “buy and hold” investments and should not be churned unnecessarily. Nonetheless, there is still a need to meet with our members on a regular basis and adjust their portfolios based on life changes or add new assets. Many of these activities will not incur commissions but some will. So conservatively if we estimate that each of the existing members that have investment accounts were to invest an average of $10,000 additional dollars that would account for $8 million in new investment dollars from the existing book equating to $320,000 in revenue.

The turnover needle can also be moved higher as we become more proficient at managing our book of clients through regularly scheduled meetings and marketing initiatives. Does an advisor have too many clients? Is an advisor losing as many clients as he/she is bringing in the door? Are we contacting our clients often enough? With the increased effort to promote the program comes a commitment to improve the skills of your advisor team. The two efforts must go hand in hand. The last thing you want to achieve is an increase in referral activity only to have your members walk away in disappointment from their experience at the investment desk.

So our sample credit union investment team might forecast a minimum goal of $800,000 based on $480,000 in new member client revenue and $320,000 in existing client revenue. If they have 3 advisors they could divide the goal evenly or if there is a disparity in the size of the advisors book and/or experience one might carry a larger goal say $300,000 and the other two would have a goal of $250,000 each.

Such an approach to revenue forecasting is not an exact science. Factors such as the composition of the investment book, experience of financial advisors, referral program success, management support, marketing initiatives and member retention are just a few of the factors that will determine the ability to increase membership penetration and increase revenue from the existing book of business. But it is this kind of close examination of our business and partnering in the goal setting process that will afford all parties involved; the financial advisor, the credit union and the broker dealer the opportunity to achieve your goals. Ultimately it is the credit union member who wins as you increase their awareness of your ability to help them reach their financial goals. Isn’t that why our doors are open in the first place?

Categories
Manage Finance

Financing Your Business

Now that you have decided on what sort of business that you want, it is time for one of the most painful parts of buying into a business – yes, the financial side.

Money is the root of all evil is a phrase that’s been bandied around quite a bit, and with the economic climate still in a rather delicate position, buying a business is not as simple as it sounds.

The ideal scenario is that you already have sufficient funds at your disposal. For instance, you may have been made redundant from your old job and you may have received a hefty redundancy package – or at least one that’s enough to help you buy a business. The other alternative is that you have enough funds in the bank anyway. Whether you were working in a high-paid job and chose to form your own business; whether you received inheritance money; or whether, in a vast miracle, you won the lottery, you may have enough money to buy your chosen business outright.

The more likely scenario is that you will have to borrow money, and again, the economic climate means that banks or businesses aren’t quite as willing to pay out as before. That means that you have to put your case to them, and also make that case as convincing as possible.

The two alternatives are both vendor financing and bank loans. Vendor financing takes place when a person or persons selling their business are wiling to lend the buyer part of the money needed. If you do not have the right amount of money, it may be possible to ask the vendor if they are willing to take whatever money you can afford, and then pay the rest back in installments.

It’s a good idea in principle, but be aware of a few things. For one thing, the vendor may wish to charge you interest, and may also want to use whatever assets you have as security, for example your home or any other property that you may own. If for whatever reason you cannot pay back the outstanding sum or if the business goes bust, be aware that you may have to pay the forfeit with your property – so make sure that vendor financing is a suitable option and that you know the risks.

But then the same could be said of a bank loan, which normally involves a bigger sum of money to be borrowed. And the vendor will certainly be happy when the sale goes through, since it will take a shorter period of time.

If you do choose a loan, one element that may be on your side is that your chosen business may be well-known. It’s also possible that you may have decided to buy into a franchise. Banks regard franchising as a safer bet, since the majority of franchises actually work out, and also most franchises tend to be high profile names. But equally, buying your own business may impress the banks if there is proof that that business has a solid track record and a history of making good money.

One of the best methods to prove your case is of course, producing a business plan. Providing that potential candidates come up with a good, well worked out plan, the chances are that they’ll succeed in paying back the money.

The advantages of producing a good plan will allow you to have a clearer understanding of what is required (a benefit in itself), and will prove to the bank or the vendor that you have a clear vision in your head of where the business will be heading. The plan needs to demonstrate that you have a solid grasp of the business opportunity and its projected financial forecasts. Of course, a bank or vendor is only going to respond to the people that can actually pay the money back.

Unfortunately, it’s rare that banks lend you all of the money, and with escalating costs, you are going to need to stump up some of that money yourself – call it the equivalent of a mortgage deposit. You will also need to bear in mind that you need liquid capital to support yourself during the first few days of your business. So work out the costs, calculate a worst-case scenario, and that way, you won’t be unpleasantly surprised.

When looking for potential businesses though, don’t just settle on the cheapest option. While there are plenty of affordable businesses out there at good value prices, you still need to make sure that you are compatible with the business and that the business is compatible with you in terms of interests, knowledge and skill. Don’t just settle on the first cheap business that comes along – make sure it’s the one for you.

If you want to choose a bank loan, a good idea is to shop around – talk to different banks to make sure that they know what they’re talking about and that they have the right amount of knowledge to support your aims and ideas. The ones who understand your own particular business needs will be worth considering. It’s also worth checking out which ones offer the best deals and support. Either pay a visit to your shortlist of banks in person (which will allow you to make that initial contact) or trawl the web for any potential lenders. Understand the different incentives and offers, such as free transactional banking terms, payment holidays as well as the charges that the banks may put on you for security costs and valuation fees. It’s also worth familiarising yourself with all the business jargon, legal terms and small print that may prove to be a problem.

In short, the key is research. Do research on the affordable businesses that hold potential for you. Research the banks that offer the best deals. And prove that you have the research skills by producing a sound business plan. That’s the key – now unlock.

Categories
Manage Finance

Lawsuit Financing Companies

Attorneys, law firms, lawyers, beneficiaries or clients usually form lawsuit-financing companies. Lawsuit financing companies can also provide appeal finance, firm finance, custom finance or estate finance.

Many lawyers and attorneys create lawsuit financing companies based on their experience and the types of cases they encounter the most. Attorneys and lawyers with expertise in personal injury lawsuits or patent lawsuits help by providing cash advances and support in their fields.

Lawsuit financing companies provide many financing options. With a significant monthly fee, a few lawsuit financing companies may help to settle the case faster. Though a large variety of options are available, the plaintiff has to discuss with the attorney which option is best suited to him.

The lawsuit financing company and the plaintiff can make an agreement of the amount of share the lawsuit financers would obtain after the settlement or the verdict is known. This is called “flat fee”. Apart from the flat fees, the plaintiff has to pay a minimum fee every month, called “recurring fees”, to the lawsuit financing company. This recurring fee can be as low as 2.9% in the case of a few lawsuit financing companies, or could be as high as 15% with other companies.

It is the financing company’s decision as to how much to pay as the cash advance. Lawsuit financing companies pay from $1000 to about a million dollars depending on the case.

Every lawsuit financing company would have a team of lawyers to assess the strength of the case. The key is to avoid funding frivolous complaints. Thus the financing companies will scrutinize the complaint and decide the chances of success of the case.

Lawsuit financing companies do not term their cash advances as loans but as investments. The applicant has to repay after the verdict. Usually the monetary settlement that is obtained after the settlement by the court is larger than the company’s advance. The lawsuit financing company should be paid the principal and the predetermined share of the monetary verdict.

Categories
Manage Finance

Heavily in debt, MU Offer Shares

England football team, Manchester United, said it would offer 16.67 million shares at a price of 16 dollars and 20 dollars. Maximum value will reach 3.3 billion U.S. dollars.
The team chose to list their stocks in the U.S., after a year off in Hong Kong and Singapore.

Manchester United had to fight against the entanglement of debt, after being acquired by Malcolm Glazer finance of Florida in 2005. Glazer and the club will each sell half its shares. Proceeds from the sale of shares, will be used to reduce the debt of 423 million pounds by March 31 to 345.4 million pounds.

Glazer family will remain the dominant shareholder, after removing 89.8 percent of the shares of class A and B. Sales of these shares will likely have a big challenge in the U.S. market, because it looks less publicity compared to the stock offering other sports clubs. Furthermore, football is also not a favorite sport in the U.S..

The club’s financial statements also make investors wonder. Revenue for 2011 was estimated at 315-320 million pounds, down about 3 percent to 5 percent from a year earlier, due to decreased revenue from games such as ticket sales and advertising are both down.

On the other hand, expenditures have increased 4 percent to 5 percent, because there are additional players and staff salaries. The determination of stock prices based on the expected profit of 21 million pounds and 23 million pounds this year. This calculation makes the stock price to earnings ratio for both series A and B 95 times.

The club is only making a fortune, because crediting a tax of 27-29 million pounds.
Details regarding the sale of its shares is disclosed, together with the signing of the sponsorship agreement with General Motors for seven years starting in 2014. Value reached 600 million U.S. dollars.

Manchester United will begin offering on Wednesday, not only to the United States but also to Europe and Asia.

Categories
Manage Finance

Tips to Finding the Right Equipment Financing Companies When Looking to Finance Used Equipment

As you look at different options to get the equipment you need to either expand or keep up with the competition, you may look into leasing used equipment. If you can operate used equipment, this may be a great option for you since it is much cheaper and you do not pay for the expensive first few years. Financing used equipment is a little different than financing new equipment and as you look into equipment financing companies there are several things you should be aware of.

First of all make sure that the equipment financing company actually offers used equipment loans. Due to the increased paperwork and effort in financing used equipment, inventory and dealing with agents and older equipment, many financing companies do not offer used equipment loans. Look for a company that not only does loans on used equipment but sells equipment from their inventory. This could help on lease terms and financing options if they want to get rid of some of their inventory.

Make sure the company isn’t too rigid on their loan terms and don’t have too many restrictions. Some companies have strict rules on the financing used equipment. They may only make loans on equipment that is 5 years old or newer, less than 100,000 miles or limit the terms to 36 months or less. You business or needs may not fit into the companies criteria. If they can’t meet your needs there are companies that can. Each company is different and may be in different financial situations. You are trying to build a relationship with the finance company and they should be able to meet your needs.

Choose an equipment financing company that doesn’t use a third party appraisal. This is especially true for loans under 150,000. The company should be familiar enough with the equipment that they would not need to get a third party appraisal and more importantly have you pay for the appraisal. You should be able to effectively convey to the condition of the equipment so that the appraisal isn’t necessary.

Categories
Manage Finance

Finance Companies – Tips on How to Select the Best

Finance companies are designed to provide leasing or hire purchase contract to many business owners. They are there to help you achieve your business or investment opportunities. There are many things that you need to put into consideration when you are looking for one that will provide you with the services that you need. You will need to do research since there are many finance companies that have come up in the market, making it competitive. Some of them provide funding with the aim of marketing their products and/or services.

Others are part of major banks while there are those who are members of financing and leasing associations. Since there are many finance companies out there, it is only advisable that you search for one that has a reputable background. A good reputation and the fact that the company is a member of the finance and leasing association is the kind of company you want to deal with.

When you settle for a particular finance company it is also vital that you fully comprehend the contract you have with them. It should be in agreement with any verbal or written quotation. They should openly inform you of any penalties that may be incurred in every situation of the agreement. You should avoid companies that have hidden prepayment penalties. It is important that you are aware and understand the terms and conditions of the company before you sign on the dotted line.

If you are leasing equipment from the company, ensure that it is new or in superb condition. Be aware that once you select a finance company that you are in a long term agreement. It is advisable that you go for a company that can give you the flexibility to change between the fixed and floating rates without charging you extra.

Categories
Manage Finance

Car Finance – The Business Funding Kind When Buying Any Car

Presently there is a business funding alternative that significantly rewards car purchasers. This kind of sort associated with business finance is referred to as the car finance. Not simply is it advantageous for these customers who would like to obtain automobiles, but in addition, it advantages many finance organizations and even the vehicle producers and dealers.

Through vehicle finance, the latter are provided the possibility of having more clients buying their cars. In the situation of financing companies, they tend to be able to make significantly more in revenue by acting as middlemen in between the auto manufacturers and the customers.

There are generally 3 alternatives that a consumer may consider when purchasing by means of car financing. A prospective customer has to discuss to a funding manager whom will explain to him all the available car financing options and aid him in choosing the most suitable choice for his automobile purchasing desires.

Auto rental is the very first automobile finance choice, wherein the funding supervisor and customer agree to the terms and conditions within the deal for instance just how to utilize the automobile. With this type of alternative, the financing supervisor would be the someone to purchase the car, which means it will likely be below his name. The agreement stipulates how the purchaser is provided the total rights on the use of the car for that decided period of time, during which, he can pay the necessary vehicle rent on a monthly basis.

Second vehicle funding option is the hire purchase deal, wherein that the buyer must pay for the decided monthly installments along with other active costs and charges. The name of the purchaser will probably be placed within the title, but simply after he has settled entirely for the automobile, including all corresponding expenses. The purchaser should be aware that during the time period that he is still paying for the monthly fees, the automobile business funding company will have the ownership of the vehicle.

Finally, the 3rd alternative is the Chattel mortgage. Using this type of vehicle funding, the customer has to produce collateral to be able to have the correct quantity of loan for that vehicle of his choice. The guarantee must be movable such as bank notes, jewelry pieces along with other related non-permanent properties. Providing guarantee ensures the funding manager that the customer is not going to renege on his payments and that he will pay until total amount of the car has been given. When the consumer has fully paid, the guarantee will be provided back to him.

Categories
Manage Finance

Financing a Business Startup? Details Matter

If you are counting on outside investors to capitalize your start up idea, the details matter. Whether you are seeking an SBA loan, talking to venture capitalists, borrowing from friends or family, or entering yourself into Shark Tank, you absolutely have to know what you are talking about before you go for the capital.

Plan the Business

Simply filling in the spaces of a business plan template doesn’t cut it. It is critical to actually plan the business. That means applying the fundamentals of business to every aspect of your business idea. You must do the homework to ensure the idea is viable, the market has room for another competitor, and that your business model will actually turn a profit. No guessing is allowed, and any assumptions must be fully explained and justifiable. The details matter — they are what separates a good idea that is tossed around for years and a growing, profitable venture.

Know the Numbers

If you are going to talk to a potential investor, you had better know the numbers inside and out. Back-of-the-napkin estimates of sales and expenses are not enough. You need to know the standard ratios for your industry and how your projections compare. You need to know the break-even point under a variety of conditions and how the variable expenses will be affected under those conditions. You must have a reasonable target for how much it costs to gain a new customer…and your explanation must make sense. Throwing around ballpark figures is usually unacceptable. You must be able to discuss and explain the details of your financial projections.

Know the Competition

You also need to do your homework on the competition and market. Know the details of who they are, what they do, and how you are going to compete. If you can’t come up with a single direct or indirect competitor, you either have not done your homework or there is no market for your product. If you are entering a crowded industry, look for unexploited niches to fill and work through the details of how and why that will work. Study the target market to find out what they do, where they go, and what else they spend their money on.

Plan the Marketing

You will need a well-developed marketing plan for how you are going to get your customers to buy. Simply placing ads in the most convenient places doesn’t usually work. Rather, consumers are so inundated with advertising that you will need to find marketing opportunities that are targeted to exactly the right people. You will need details on the reach, expected response, and cost per sale of your planned marketing activities. You should have a plan for the initial wave of marketing and how it will be evaluated as well as some back up ideas in case the results are less than stellar.

The Details are Essential

If you are planning to approach outsiders for help in funding your startup, know the details before you ask. In fact, even those using their own resources to fund a startup would benefit from digging into the details before they launch…the failure rate would drop precipitously. But going in front of potential investors raises the stakes. Smart investors will expect you to know your idea top to bottom, inside and out. Get into the details — you will have a better chance of securing financing and a better chance to succeed.

Categories
Manage Finance

PUSH FACTORS INCREASING ROLE OF FINANCIAL INSTITUTIONS

here are several factors driving the increasing role of financial institutions (Rose & Fraser, 1988: 13), namely:

1) The increase in the income of the middle class families and individuals with incomes sufficient, especially among the middle and has a number of income for savings each year. Financial institutions provide the means favorable to their savings.

2) The rapid development of industry and technology: Financial institutions have demonstrated and have the ability to meet all the needs of capital and the industrial sector funds are usually sourced in bulk and savers.

3) The amount denominated financial instruments make it difficult to gain access to small savers. There are some interesting types of securities and loans in the money market can not be entered or acquired small savers due to such a large denomination. However, by collecting funds and many depositors, financial institutions can provide opportunities for small savers to acquire financial instruments interest.

4) Economies of scale and scope in the production and distribution of financial services By combining resources in producing various kinds of financial services in large numbers, the service cost per unit can be reduced as low as possible, which gives financial institutions a competitive edge against other parties that offer financial services

5) Financial institutions sell services unique liquidity, reducing the cost of liquidity for its customers. Uncertainty of cash flows the company’s business units and individuals, will jeopardize their condition when not in a liquid state when the cash is needed, so it can be subject to fines (penalty cost). To meet the needs of financial institutions selling liquidity services, such as deposits.

6) Long-term Benefits Financial institutions can obtain funding or borrow money and depositors with interest rates relatively lower then utilized loan with a higher interest rate for a longer period of time to the debtor, gains or spread between the cost of funds on the one hand and loan interest rates tend to move together, up or down..

7) the risks of a smaller: Supervision and regulation of the government and the insurance programs cause risks on deposits at financial institutions become smaller and other investments.