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Small Business Finance – Finding the Right Mix of Debt and Equity

Financing a small business can be most time consuming activity for a business owner. It can be the most important part of growing a business, but one must be careful not to allow it to consume the business. Finance is the relationship between cash, risk and value. Manage each well and you will have healthy finance mix for your business.Develop a business plan and loan package that has a well developed strategic plan, which in turn relates to realistic and believable financials. Before you can finance a business, a project, an expansion or an acquisition, you must develop precisely what your finance needs are.Finance your business from a position of strength. As a business owner you show your confidence in the business by investing up to ten percent of your finance needs from your own coffers. The remaining twenty to thirty percent of your cash needs can come from private investors or venture capital. Remember, sweat equity is expected, but it is not a replacement for cash.Depending on the valuation of your business and the risk involved, the private equity component will want on average a thirty to forty percent equity stake in your company for three to five years. Giving up this equity position in your company, yet maintaining clear majority ownership, will give you leverage in the remaining sixty percent of your finance needs.The remaining finance can come in the form of long term debt, short term working capital, equipment finance and inventory finance. By having a strong cash position in your company, a variety of lenders will be available to you. It is advisable to hire an experienced commercial loan broker to do the finance “shopping” for you and present you with a variety of options. It is important at this juncture that you obtain finance that fits your business needs and structures, instead of trying to force your structure into a financial instrument not ideally suited for your operations.Having a strong cash position in your company, the additional debt financing will not put an undue strain on your cash flow. Sixty percent debt is a healthy. Debt finance can come in the form of unsecured finance, such as short-term debt, line of credit financing and long term debt. Unsecured debt is typically called cash flow finance and requires credit worthiness. Debt finance can also come in the form of secured or asset based finance, which can include accounts receivable, inventory, equipment, real estate, personal assets, letter of credit, and government guaranteed finance. A customized mix of unsecured and secured debt, designed specifically around your company’s financial needs, is the advantage of having a strong cash position.The cash flow statement is an important financial in tracking the effects of certain types of finance. It is critical to have a firm handle on your monthly cash flow, along with the control and planning structure of a financial budget, to successfully plan and monitor your company’s finance.Your finance plan is a result and part of your strategic planning process. You need to be careful in matching your cash needs with your cash goals. Using short term capital for long term growth and vice versa is a no-no. Violating the matching rule can bring about high risk levels in the interest rate, re-finance possibilities and operational independence. Some deviation from this age old rule is permissible. For instance, if you have a long term need for working capital, then a permanent capital need may be warranted. Another good finance strategy is having contingency capital on hand for freeing up your working capital needs and providing maximum flexibility. For example, you can use a line of credit to get into an opportunity that quickly arises and then arrange for cheaper, better suited, long term finance subsequently, planning all of this upfront with a lender.Unfortunately finance is not typically addressed until a company is in crisis. Plan ahead with an effective business plan and loan package. Equity finance does not stress cash flow as debt can and gives lenders confidence to do business with your company. Good financial structuring reduces the costs of capital and the finance risks. Consider using a business consultant, finance professional or loan broker to help you with your finance plan.

Fertilizer Production Displays Adverse Effects On Phosphate Industry Workers

Fortunately for the United States, Central Florida is home to the largest known phosphate reserves in the world. Phosphate and its derivatives are essential to continuing life on Earth, based on phosphorus and related nutrients from nitrogen. It is safe to say, phosphate reserves located in the United States are critical to the economy and national security concerns as well.Both the U.S. economy and safety depend on phosphate reserves in the U.S. and around the world. The United States is known to have over seventy percent of the world’s phosphate reserves. Florida reserves are over ninety percent of phosphate reserves found in the U.S. Basically; Central Florida is ground zero for phosphate mega-mining. Phosphate is needed for one’s health, but phosphate mining and fertilizer production are linked to severe illnesses and even death.Historically, Florida’s phosphate industry has little if any oversight from state and federal level officials. Until recently, industry practices were overlooked or regarded as benign to Florida’s environmental health issues. Interestingly, the industry today is alleged to be responsible for the greatest threat to Florida’s environment, based on comments from the Department of Environmental Protection.Phosphate companies have stripped mined central Florida for over 60 years which benefits local economies located near one of the many phosphate mining plants. The industry in central Florida employs hundreds of workers and seems to offer stability for one’s livelihood. From the outside looking in, it appears industry workers have employment longevity to support a comfortable lifestyle. Industry employs many good people and their jobs can be dirty, dusty, smelly, hazardous, and back breaking as well.Florida’s phosphate industry workers seem to have stable incomes and can afford health, dental, and life insurance policies for themselves and their families. Now that health care is affordable, industry workers pay their premiums and begin seeing their doctors for illnesses, checkups, and prescription medicines. Phosphate mining workers now have medical histories and can track their health problems over time, in some cases, years of employment with the industry.One may expect healthy industry workers due to continuous health care over time. However, statistically, research shows industry employees have higher than average adverse health effects, reportedly from exposure to phosphate mining and the production of fertilizers. The primary illnesses with industry workers are respiratory and esophageal health related. (1)Health Threats To Phosphate Industry Workers DocumentedResearch results completed in the late 1980′s, statistically show increased adverse effects on industry workers including higher incidences of respiratory illnesses such as lung cancer and cancers related to the esophagus. Data indicates the longer one works for the phosphate industry; the greater one’s risk to become ill due to respiratory, esophageal, and radiation poisoning issues. This is called a “dose-response relationship” (2). Historically; the mortality rate for phosphate industry workers is much higher than Florida’s state average mortality rate for similar illnesses and ages. The research also considers similar habits such as smoking or chewing tobacco. The illnesses discussed here are related to respiratory, throat, and radiation exposure as well. (1) The research reflects phosphate industry workers employed for longer than eleven months.Research indicates employees directly exposed to the process of producing fertilizer from phosphate are the industry workers most likely to display adverse effects concerning respiratory illnesses and diseases related to alpha and gamma radiation emissions. The emissions are based on uranium and radium existing in fertilizer production waste by-products. Research displays the further away one’s job is from the production of fertilizer; the less likely one will contract related illnesses. The statistics show a greater number of illnesses directly linked by one’s proximity to the manufacture of fertilizer from phosphate.Florida’s phosphate industry offers employment stability for local economies adjacent to mining facilities. However, phosphate industry employees may be at risk for serious respiratory and esophageal illnesses due to their proximity to the production of fertilizer.Reference1. Cancer Morbidity and Mortality in Phosphate Workers1, Departments of Epidemiology [G. B., G. M. A/., R. S.] and Environmental Health Sciences [T. M.J, The Johns Hopkins School of Hygiene and Public Health,Baltimore, Maryland 212052. [CANCER RESEARCH 48. 7298-7303. December 15. 1988]

Construction Marketing

Overview Of The Construction IndustryMany construction businesses are struggling currently; due partly to the changing economic climate, but also to the countries recession.The nations population is ballooning however houses are not being built to house the population sufficiently. With growing population comes the need for facilities (schools, libraries, businesses) also which are not being build quick enough.The problem lies with the funding; because many clients are being careful with their money it is not being spent on capital projects. The big construction firms are therefore struggling due to big projects being put on hold or canceled (which costing millions of pounds each is a big loss) which is then cascading down to the smaller construction firms, electricians, builders, plumbers etc.The large companies have financial reserves that they can draw on, or can cost cut in order to ease cash flow up; however the smaller companies (or freelancers) are hardest hit as they may rely on the feed of work.Marketing In The Construction IndustryConstruction companies historically do not really market themselves (as a general rule) but do historically rely on word of mouth or on recommendations from friends in the trade.The need therefore needs to be on construction companies being more proactive and actually hunting down work. This is a change from years gone by when work did used to be plentiful and business was booming construction companies had the freedom to pick and choose. However as work had dried up, it is a case of taking what they can get. One other thing that makes things harder is that during the boom years of the 2000′s many new construction companies started up and quickly grew, now things are hard many are now competing on the existing projects that are left so competition is high.Construction businesses are great at construction but not very good at construction marketing; most have not done marketing in the past and do not really understand how it works. Many construction companies do not have websites or done any marketing historically – as the industry has been busy, word of mouth has been used.Marketing Options For Construction CompaniesAll construction firms are different (architects, builders, M&E etc) but there are marketing options that each can utilise.As the industry is deep in recession, all construction companies need to ‘shout’ in order to pick up new business. Shouting would be done through marketing – by being seen an heard will mean they will pick up contracts and construction projects.Websites For Construction CompaniesFirst and foremost, all construction businesses would benefit from having a website. This gives a ‘virtual’ presence and a chance for customers to find out more without the need of a phone call or visit.As we are now in a digital world, the construction industry as a whole needs to modernise and get on board.PR for Construction CompaniesAnother good marketing tool for construction firms to do for starters, would be to talk to construction experienced PR agencies that may well be able to help them with industry exposure.PR is all about generating exposure and by talking to a industry experienced PR agency construction firms should be able to stand out in the crowd and get more sales enquiries.The type of marketing that construction firms would need would depend on the sector that they are involved in. PR has been generally known to be effective for most industries however within the construction sector; there are other forms that may be more suited.Telemarketing For Construction CompaniesConstruction companies may well benefit from using telemarketing as a way to generate new sales leads; this is generally acclaimed to be a fairly quick form of marketing in generating new sales enquiries. Although it may be expensive in the short term, in the long term it should prove worth while. Telemarketing is a very pro active form of marketing and as such would certainly boost new enquiries in the short term.The Need For Construction MarketingThere are numerous different forms of marketing on offer, each one does it’s job effectively; however it would be wise to talk to a specialist marketing company that knows the construction industry in order to find the right one for your construction business.The problem is that the work is out there, it is just that the work is not as plentiful as the boom years – so construction companies need to be aggressive in their marketing, pro active and shouting louder than the competition.