photo credit: B.O.G.D.A.N.Question:

I’m an entrepreneur and have finished my business plan. I’m getting ready to raise $2 million for my startup real estate company – but a friend of mine said I should only talk to accredited investors. I’m not exactly sure what an accredited investor is and I don’t understand why I can’t talk to anybody I want to about investing in my company?

Answer:

The term, accredited investors, has to do with securities laws – both federal and state – and making sure you comply with the very onerous restrictions that go with the fundraising for your start up company. I’ll give you both the short and long answer to what an accredited investor is in a minute. But the first thing you need to know is that if you raising capital from angel (AKA private) investors, you will almost certainly need more than just a business plan. You need what’s known as a Reg D Private Placement Memorandum – PPM – in order to comply with federal and state securities laws.

If you plan on pitching your deal JUST to traditional venture capital, you do not need a PPM. However, well over 95% of start up companies are too small, too embryonic, to hit the threshold funding levels, growth levels and potential market caps to attract VC funding. Hence, over 95% of start up companies will seek their funding from private investors. Hence, over 95% will need a Reg D PPM.

Reg D is a securities law exemption for private placements that allows companies to raise investor funds without all the costly and overwhelmingly onerous legal and accounting requirements of a public offering of stock. To qualify for the Reg D exemption, you have to follow very stringent rules. One is having the PPM. Another is not soliciting the general public (this is a biggie.) Another is only pitching the deal to those investors who can really afford to take the risk and lose their money. Hence, they need to be accredited. It actually gets more complicated in that you can usually offer your deal to up to 35 unaccredited investors with most offerings, depending on how they are structured – but trust me when I say that you are better off sticking with the more sophisticated accredited investors.

If you want more detail on it, check out my web site – there you can see why you want to do this, some of the onerous penalties for not doing this (e.g. possible but not probable jail time), and the full listing of Reg D I got from the SEC. Also, from that same page, you can jump to the definition of an accredited investor.

Bonus: For more on funding documents, business plans, articles, tips and tools for entrepreneurs and start up company CEOs, you’re invited to visit my blog and web sites…and ask your own questions. While there, I invite you to download both a sample comprehensive business plan and a complete Reg D private placement memorandum (PPM) for FREE…

http://www.ShouldYouStartACompanyToday.com <~~~ The Blog + Free Sample Business Plan / PPM / Audio / More…

http://www.Virtual-Exec.com <~~~ Virtual Executive Mentoring and Consulting Services

Robert Lee Goodman, MBA, Ceo & Chief Dragon Slayer.

If you want to change your life by becoming both an eb-5 investor and a U.S. citizen, you have many options. One of the more popular areas for immigrant investors to settle down lately is Florida. Immigrants from rainy and snowy countries alike appear to enjoy the constant sunshine and populated beaches of the Southeast, and you just might count yourself among them.

According to recent studies, plenty of Europeans and Latin Americans are attracted to Florida, not because of its cheap real estate, but because they want to be American citizens while soaking up the sunshine. In fact, the recent interest in the area could help turn the state’s economy around faster than anticipated. Clearly, the immigrants benefit just as much from the decision to be an eb-5 investor in the area, as they get to come to the U.S. much faster than they would through other visas.

Investors are purchasing everything from condos to restaurants and retail shops. However, if you do not want to completely start a new business, which requires that you have $1 million and hire at least ten citizens, you have other options. There are a few regional centers in the area that will do much of the footwork for you, as long as you have $500,000 to spare. If you’ve ever wondered how some immigrants get away from a life of toiling in 9 to 5 jobs in their home country, only to go to the U.S. legally in less than a year and spend their days on the beach, this is how. As long as you have half a million dollars or more and a desire to get to the U.S. quickly, you should consider becoming an eb-5 investor.

There are currently two regional centers that require the mere $500,000 investment rather than $1 million. Monroe and Miami-Dade counties are the two existing areas that have lower than average employment rates and stand to gain much more from investors than other areas do. Hence, the deal here may be more attractive than in other areas, since all they need from you is the money and an interest in improving the area, even if you receive updates on the project while sunbathing.

A current project, for example, includes finishing commercial space attached to a new condo, which will eventually house retail shops, restaurants, a hotel, a spa, and more. Several other projects like this come up often. Investors cannot simply buy a house and rent it out, but investing in a condominium project does count.

You do not have to leave your family behind when you become an eb-5 investor. In fact, you can bring your spouse and any children up to age 21. If you have always dreamed of enjoying the beach with your family in the United States, and getting away from a daily job, investing in south Florida could be your calling.

For more information on the EB5 visa visit http://eb-5investorgreencard.com website for information on obtaining an EB-5 visa.

photo credit: TheeErin

Some people believe finance lenders are out to get you. This thinking is born out of a misunderstanding of how they determine who to give financing too and on what terms. However, if you know how they arrive at their calculations, you will find the process is far from being ad-hoc and is actually very straight-forward. These lenders all have established formulas that look into the 4Cs: Capacity, Credit History, Capital, and Collateral. How solid you are in these areas will dictate how good of a candidate you are. Here, we take a look at each factor and give suggestions on how you can improve your score in each of them:

1. Capacity

Essentially, takes a look at how much you can borrow. This will look at factors like how much money you make and whether you can pay off the debt. The general rule is that your mortgage payments should not be more than 30% to 35% of your monthly income. This debt percentage should include not only the mortgage payments, but all other debts like auto loans and credit card debt. Obviously, there are several ways you can improve your capacity. One way is to find ways to bring in more income allowing you a large base to draw the percentage from. Another way is to improve your long term prospects to get a larger salary down the line. Some lenders take into account your future income prospects to make this determination. Finally, you can look at finding ways to pay down other debts like car and credit card debt. Each of these will help improve your capacity score.

2. Credit History

FICO scores of over 650 plus get the best rates and terms.

Many financial advisers suggest raising your score if under 620 and avoiding subprime mortgage loans. Basically, you will see interest rates and down payments climb when you have below a 620. Therefore, you be sure you allow yourself enough time to repair your credit history and fix any errors in your credit report. Another thing you consider is building up a history where you are paying off the two main kind of debts: (a) credit card debt and (b) loan debt. Both types of debt are viewed differently by finance lenders and you should have a history of both kinds being paid back over time in your credit history.

3. Capital

Capital is essential money you have beyond your basic monthly income. This can take many different forms ranging from checking and savings accounts, 401k plans, IRA plans, Insurance policies, valuable belongings, stocks, and essentially any other investments or investment property. The key here is the larger amount of capital you have, the less of credit risk you are. This translates into a better score for financing. Obviously, this will be the hardest factor to improve upon because it is either something you have acquired over time or through inheritance. The one thing you can realistically do in this area is start making an effort to save extra money in the event you have paid off all your other forms of debt. In addition, you should take advantage of free money situations where your employer matches your contributions in your 401k plan as this is essentially free money for you.

4. Collateral

This factor takes a look at how valuable the actual home is. The more valuable and market worthy the home is, the higher your collateral score will be. This is essentially a safety standard where the finance lenders want to know that you won’t simply walk away from the deal if things go south. Areas they look at to score the house are looking at potential problems of the home like electrical issues, foundation issues, regular maintenance needs of the home, roofing problems, etc. Naturally, the fewer the problems, the better. By selectively choosing homes that are in better condition, you can go a long way towards getting a higher collateral score. The use of good inspectors can help considerably here.

By keeping these different factors in mind, you can actually improve your standing to get the best financing from finance lenders. Hopefully, this has taken away some of the mystery surrounding home financing.

For more information on Finance Lenders, visit the previous link or http://www.homeloansandrefinancing.com to get some solid tips and information on various home loans and refinancing options.

photo credit: david.orban

Starting up in business is tough so if you want to make it a success you have to posses the right attitude and leadership qualities; you need to be a confident and motivated entrepreneur.

To make a good entrepreneur there are certain qualities that you need to have such as the following:

• Be a good leader
• Self confident and organised
• Confident and a risk taker
• Good communicator and competitive
• Prepared to work long hours
• Provide a unique service or product

It is said that anyone can be an entrepreneur but I strongly believe that you won’t get very far without having the above qualities. You need to be a strong leader and determined to make it in the world of business if you are going to make it past the first two years, let alone build a successful business. The reason I say this is because within the first two years of a new business most new ventures fail mainly due to a lack of experience and lack of funding; don’t let your business just become another statistic; get everything right first time not second.

The life that is led by an entrepreneur consists of hard work, long hours and continued devotion to a business idea. So before you start up your business you need to make sure that you feel ready for the challenge and the ability to take on your venture.

If you feel that you have the skills and motivation to build up your own business the next thing that you need to gain is funding to start up your business.

There are many places that you can approach to gain the funding that you need to start up your business such as a bank loan, overdraft, credit cards, savings, friends and family as well as private investment. Private investment differs from traditional business finance such as bank loans for the fact that private investments are known as equity, which is when the money that is invested into your business doesn’t need to be paid back, instead a percentage of ownership of your business is handed over to the investor.

Private investors not only provide you with the money that you need to get your business off the ground but they also provide you with all of their expertise and industry knowledge; you are also allowed full assess to their list of contacts who could potentially help to get your business known, meaning you are equipped with everything you could possibly need to make your business into a success.

So if you are in the process of starting up your own business then I strongly urge you to consider bringing on board the help of a private investor to give your business the best possible chance of becoming a success as both parties (entrepreneur and investor) will benefit from this situation, leaving everyone involved happy!

So what are you waiting for? Get your search for the perfect private investor started today.

If you are a Private Investor join the Investors Club here at Angel Start-ups today, where you are bound to find the best new business venture to invest in before anyone else.

photo credit: ItzaFineDay

photo credit: apesphere

Acquisition/Investment in Indian Companies by Foreign & Domestic Investors – Six Steps Mantra

Joint ventures, strategic alliances and acquisitions are the flavor of the day that enable fast growth focused companies to have rapid inorganic growth and expansion in new sectors. However, prior to engaging in a joint venture relationship or acquisition of an operating Indian company (“Investee company”), either by way of private placement, or secondary market, or subscription of substantial equity share capital, it is advisable for the Investor to carefully and stringently undertake the following six step mantra to avoid future surprises and heartburns:

(i) Due Diligence/Operations Audit: Extensive legal and financial due diligence of the Investee company is advisable to assess Investee company’s track record in compliance with Indian laws, statutory obligations and regulations applicable to it. The due diligence exercise (which usually takes between three (3) to four (4) weeks depending on availability of documents) not only enables the Investor to assess potential liabilities, evaluate unknown and potential, disclosed or undisclosed liabilities but also enables the Investor to assess the feasibility and viability of the proposed acquisition and rationalize enterprise valuation. If required, Investor can demand creation of an escrow account for safe deposit of a part of the acquisition cost, parked for an agreed period to mitigate against any future liabilities of the Investee company.

(ii) Resolution of Preliminary Issues: Preliminary issues, if any, arising pursuant to the conduct of the Due Diligence exercise would need to be resolved and a decision taken whether or not to proceed with the acquisition. For example, whether a change of control would affect the ability of the Investee company to carry on its business operations under the current regulatory framework and the approvals and licenses required. Unresolved issues that are not fatal to the acquisition may be identified and negotiated.

(iii) Regulatory/Pricing/Tax Issues: Identification of regulatory and tax issues that may impact the transaction is critical. In case the Investor is a non-resident, foreign direct investment (“FDI”) guidelines will also need to be assessed.

FDI either by way of acquisition/transfer of issued equity capital or fresh subscription to the equity capital of Investee company in most sectors is presently unregulated and most sectors barring a few do not require the FDI approval from the Foreign Investment Promotion Board. However, the price at which the transfer takes place will need to conform to the pricing guidelines prescribed by the Reserve Bank of India (“RBI”), i.e., the fair valuation of shares have been done by a chartered accountant as per the prescribed guidelines; and the price per share arrived at has been certified by a chartered accountant. The share consideration in respect of the shares purchased by Investor will need to be remitted to India through the banks authorized to deal in foreign exchange.

In case of transfer of shares to the Investor the transaction would be subject to levy of stamp duty ranging from 0.25% to 0.75% of the value of the shares transferred and payable in accordance with the applicable rates prescribed by the respective State where is the Investee company is registered. The transferor usually bears the stamp duty for the transfer of shares in the absence of a contract to the contrary. Alternatively, Investor can consider to subscribe to the equity share capital of the Investee Company by way of preferential allotment and avoid the stamp duty payable on transfer of shares.

Capital gains arising from transfer of shares (in the event of an acquisition instead of an issue of fresh equity) would attract tax in the hands of the seller, i.e., the existing shareholder of the Investee Company.

(iv) Contract Documentation Preparation: Upon successful resolution of preliminary issues and an affirmative decision to proceed with the acquisition, parties would need to identify and prepare commercial documentation to record their understanding of the transaction and the manner in which such transactions would be closed.

(v) Closing: A reasonable time frame is agreed within which the share acquisition would be consummated. If Closing is delayed, parties may consider to put documents/consideration money in an escrow pending resolution and satisfaction of the closing conditions.

(vi) Post Acquisition Compliances: This would usually include corporate compliances such registration of the share transfer in the statutory books of Investee Company and intimation of change of control that may be required pursuant to any regulatory approvals and licenses already obtained. For instance, Investee Company will need to inform Registrar of Companies and the RBI about the change in the equity structure of the company.

The risk of acquiring an existing operating company with its past baggage of liabilities versus setting up a new company is a critical question that most Investors face. Needless to say, the cumbersome process of setting up a new company, obtaining necessary authorizations from regulatory authorities for establishing an Indian company and growing a new business is always challenging. It is for this reason that mergers and acquisitions are not only common but the preferred way for expansion and growth in the today’s fast growing economies.

Areas of Practice:

Infrastructure, Telecommunications, Power, Mergers/Acquisition, Software/Information Technology, Business Process Outsourcing, Media & Entertainment, Private Equity and Venture Capital, General Corporate and Commercial, International Arbitration.

Professional Summary:

Seema Jhingan’s practice spans over fourteen years during which she has acquired substantial expertise in representing developers, sponsors/lenders, venture capital investors, international corporations, financial institutions, and other strategic investors involved in the establishment, development and financing of major infrastructure and IT projects in India.

Seema is a Partner with a Delhi Based Law Firm LexCounsel Law Offices and regularly contributes to journals and publications and often takes up speaking engagements. Seema can be reached at sjhingan@lexcounsel.in

photo credit: teresawer

There has been a recent wave of websites and TV shows about people starting their own business and following that path from bright idea and individual entrepreneur to small business start-up and then potentially to multinational, depending on the product or service. But what kind of audience are they broadcasting to? Well, it turns out a lot of us Brits want to start up our own small business. According to Business Link, over 10 million of us would like to start up our own business at some point.

So the encouragement is there and let’s face it, a lot of us like to be the boss. However, the whole process is easier said than done. The people who took part in the survey were asked what the main obstacle to starting up their own company was. Many cited financial concerns, be it the current UK financial climate or perhaps their own overdrafts, mortgages and debts. How would they cope if they started, but couldn’t generate enough initial funding to keep it going? After all, they’ve got the idea, the business plan, the desire, and maybe even a few colleagues. But how do they find the right people?

Well, for most of us non-millionaires, the main thing we need to do is to generate capital for the business. Since start-up companies have no established brand name and no financial records, loans are pretty much impossible. This means the entrepreneur needs to look at other ways of finding potential investment. This can be done via venture capital funding, courtesy of private investors that can run the business with you (basing their funding terms on how your business performs in the early stages of investment) or with business angels, also known as angel investors, who are usually individuals or groups of people that provide the investment in exchange for partial ownership of your company.

Where can we find these people? Well, several websites have made that gap a lot smaller. Sites like the Angel Investment Network allow UK entrepreneurs to post ideas for start-up businesses, along with details such as which market sector (be it within the UK or globally), industry niche, and what sort of investment you are looking for. The network also allows angel investors (both in the UK and abroad) to browse through entrepreneurs’ proposals based on their own investment criteria and interests. Business partnerships and new start-up companies are evolving on a daily basis, and the Angel Investment Network database now has over 60,000 members.

Mike Lebus works with UK entrepreneurs seeking investments, via the Angel Investment Network, which has since expanded into a worldwide network of websites that help entrepreneurs connect to angel investor groups around the world.

photo credit: sergeant killjoy

Do you treat your patents as a fence or a tollbooth? If you wish for your start-up technology company to obtain investment from or acquisition by a bigger player, you had better understand the difference.

Most start-up technology company entrepreneurs and CEO’s understand that patents can be key to establishing the value of a new business idea. Typically, entrepreneurs and CEO’s such as yourself will engage patent attorneys to build an IP portfolio that protects the start-up’s technology and products to the fullest extent possible. The motivation for this effort and expense is, of course, to to protect your start-up’s idea from use by others. As management of a start-up you may be seeking to build an ongoing business around the patented technology, but often the goal of building a solid patent portfolio is to make your business an attractive target for investment or acquisition by a larger company.

As an intellectual property and business strategist, I believe that such an inwardly focused patenting strategy is a misguided approach for companies that wish to obtain investment from or be acquired by larger companies. Why do I think this? Let me use a simple analogy.

Let’s say you have worked diligently for several months of weekends to get your yard perfect–and it is perfect. When you finish the yard, you realize that if someone walks on your lawn, perfection will be lost. So you put an expensive fence around your lawn–and it is the best expensive fence you can buy: a virtual masterpiece. But what good is the fence if no one wants to walk on your lawn anyway? You wasted all that money on the fence.

The great majority of patent seekers (including those at otherwise sophisticated large companies) believe that patents are best used to keep others off their “technology lawns”. As such, patents are generally focused inwardly–that is, on the patentee’s own technology or products. This is known as “defensive patenting”. Defensive patenting is a tried and true patent strategy, but it can be a poor choice for companies that wish to obtain investment from or be acquired by bigger players. Like the example above, if these bigger players have no interest in walking across your technology lawn, your defensive patent fence is a wasted expense.

So how does a technology start-up company such as yours get the attention of these big players? It is quite simple–by putting a patent fence around the big company’s technology lawn. When properly formulated and executed, this strategy (which is not surprisingly called “offensive patenting”) makes technology or products patented by your company an attractive target for a bigger player. Your company’s patent(s) will reduce or prevent the bigger player’s free movement in its desired business space. Such a savvy offensive patenting strategy effectively requires the bigger player to ask your start-up company for permission to play on its own technology lawn. Your start-up company can provide that permission in the form of a licensing of the patent(s) at issue or by sale of your company to the bigger player. Either way, the your start-up company is benefiting financially from this smart offensive patenting strategy.

Of course, if offensive patenting was easy, smart entrepreneurs and CEO’s such as yourself would already be executing on it in droves. In truth, however, offensive patenting can only be effective against big players through use of expert competitive patent and business intelligence. Such techniques have unfortunately not been readily accessible outside of the large corporate and investor environments.

This is changing, however, as more intellectual property professionals with corporate business experience, such as myself, are entering the consultancy business. I have been able to work with clients using patent filing data analysis to identify where a large company was likely going to be focusing its technology or product efforts in 3-5 years. Together, the clients and I will brainstorm a “next generation” improvement to that technology or product. We then will work with the client’s patent attorney to draft, file and prosecute patent applications that are directed toward reducing or preventing the large company’s future ability to freely compete in that business or technology space. The objective is to end up with the client owning patent(s) that would be infringed by the large company’s future business plans. Rather than change its business plans, the large company will pay a patent “toll” in the form of a license or acquisition of the client.

Admittedly, offensive patenting is a bit like looking into a business crystal ball. However, the information needed to successfully execute on this patent strategy is out there and, when collected and analyzed by the right person, it is actually hiding in plain sight. Experts believe that those who collect and act on available data are more likely to be successful in today’s data-driven economy. I believe that smart entrepreneurs and CEO’s of startup companies can achieve the investment or acquisition they want for their companies by collecting and analyzing patent filing data to make it necessary for big companies to pay for permission to play in their desired business spaces.

So stop thinking about patents as a fence, but instead as a toll booth. One can usually walk around a fence, but if the toll booth blocks the only road to a big company’s business destination, the toll is likely to be paid.

Jackie Hutter is Principal of The Hutter Group, a leading provider of IP (“Intellectual Property”) business counseling and competitive analytics to forward-thinking organizations that seek to maximize firm asset value by capitallizing on the power of intellectual property. She has over 13 years experience counseling innovation-driven companies, universities and business development and investment professionals in maximizing their firm intellectual asset value. Jackie was named a SuperLawyer(R) in Intellectual Property in Georgia in 2004, and she has been a frequent speaker on IP issues to her fellow lawyers. Jackie was formerly Senior Patent Counsel at a Georgia-Pacific LLC, where she had sole responsible for Dixie(R) patent matters and, later, the company’s Chemicals business.

Prior to joining Georgia-Pacific, Jackie was a shareholder at the prestigious IP firm of Needle & Rosenberg, PC (now Ballard & Spahr), where she represented mulit-national companies, universities and innovators in protecting their IP to create maximum asset value. Jackie has also been a patent and IP litigator, which gives her a unique perspective in how to maximize firm IP value by avoiding litigation. Prior to attending law school on a full academic scholarship and where she graduated with honors, Jackie obtained her M.S. in Pharmaceutical Sciences and she spent several years as practicing chemist at Helene Curtis (now Unilever). She is a named inventor on one U.S. patent. Jackie lives in Decatur, Georgia, in a groovy mid-Century modern house with her husband, 2 daughters and several pets.

photo credit: A. www.viajar24h.comThe number one issue on the plate for nearly everyone is the economic meltdown that occurred in 2008 and is carrying through to 2009. Although we here bad news in the media, most don’t describe the really ugly things occurring.

The Banks

2008 was a bad year for banks. Given what you hear on the news, most of us would think things were calming down. They are not. If anything, they are worse. For instance, are you area that regional banks are failing at a rate of more than one a week? How about the fact the federal government cranked $165 billion dollars into the 8 biggest American banks, but they still lost $418 billion in value? The latest estimates place the total capitalization of all banks in the US at 1.8 trillion dollars. That’s not bad until you realize the latest estimate of bad debt in the industry is 3.6 trillion dollars.

The facts spell out a fairly predictable path for banks in the coming months. The entire system appears to be insolvent. The federal government is the only entity with any money. It can’t let the banking system fail. The obvious choice is to nationalize the banks, close those that can’t be saved, recapitalize those that can and then launch the banks again as private entities traded on the stock markets. Taxpayers will take a bath, but there appears to be no other choice at this point.

Trade Protection Wars

The United States is the great consumer nation. By consuming like mad, we drive the world economy. Well, there is one problem. We are no longer consuming. Americans are worried and holding on to every penny they have. The cut back in spending is killing companies in the United States and causing massive job losses. The same is occurring overseas for China and other countries that import to the United States.

When a cycle like this starts occurring – reduced spending, job losses, more spending reductions – one thing always happens – protectionism. “We need jobs! Why should we be shipping jobs to India? China?” If you thought the immigration debate got people riled up, wait till this movement gets moving. If politicians fall in line with this way of thinking, then we can expect trade wars to break out.

The Good News

Unfortunately, there is a dearth of good news at the moment. Still, there are some hints that things are beginning to bottom out. Housing sales were up in December 2008. Financial gurus were surprised by this, but should not be. It was inevitable. The increase in sales signified a collective view that the bottom of the market has either been hit or is getting very close. How do we know this? Most of the buyers are investors. They are in the business of making money on property. When they start moving into the market, it is a signal that demand is going to increase. Is it a sign of a massive turn around? No, but it is a sign things may be stabilizing.

As predicted by many, 2009 is shaping up to be a rough year. If you are in financial straights or worried, it is a time to live frugally. 2010 should see a rebound, so getting there in as good a shape as possible should be your goal.

Stephen Teak writes about economic news for FactoringCompanyInformation.com – find a factoring company that will solve your small business cash flow problems with small business factoring.

photo credit: the tony santos

t is not the end. Dark clouds of recession are certainly hovering around the financial horizon. The economic indicators point towards a downtrend in business, which means problems for real estate investors, businesses and job seekers. Gas prices have hit an all time high. It is certainly time to prepare for a rainy day.

Banks are reeling under subprime losses. Real estate seems so unreal. The U.S. Government is finally seeing red in their economic predictions. What options do individuals, investors and regular employees have in this economy? What should small businesses do to prepare for the recession? Certainly none of us can afford to take things lightly.

Survival tips for employees

Recession means the axe will fall on the employees first. What we are going to witness is an exodus of sorts. Keeping our job intact will itself be a full time job. The best advice during recession is to find ways to make yourself indispensable. You should take on some more work load which ultimately would mean savings for the company. Your job would pay for itself and would make sound financial sense. It is another matter that someone else’s job would become redundant. But that’s least of your problems. Your company’s financial situation would dictate whether you keep your job or not. It is possible to keep your job safe from recession.

Every employee should start behaving like owner of the company. Your job depends on it. Where can you cut costs? What innovations can be implemented? How to sell? All these questions need to be addressed by you. This will not only mean survival of your company but yours as well.

There are hundreds of job aspirants out there. Among these many have spent a small fortune educating them to be MBA’s, engineers and what not. A bleak economy is something they have to prepare for. Forget about huge pay packets. Look at the ground reality and grab whichever job you can get. Financial security should be your first aim. Climb the job bandwagon first, secure a job. During recession, you can’t wait for manna to fall from heaven.

Survival tips for investors in the stock market and real estate

Investors in the stock market have to be extra careful during times of recession. The economic indicators will bring down the market and the investors along with it. That’s for sure. An investor should therefore have a serious look at his portfolio. Get rid of the junk stocks quickly, if you have already not done so. These penny stocks appreciate smartly during the good times. They also fall flat like a fat puppy during an economic downturn. Many millionaires have become paupers overnight due to holding on to these stocks. Stop loss if you have already lost. The economy is in bad shape; don’t let it drag you along. Go for the blue chips. Even in recession they are likely to hold on to their price. Over a period they would give reasonable returns. You may not become a millionaire but then you never know.

Another piece of advice for investors is not to purchase stocks with borrowed money. We are all optimists at heart and a hardcore investor is the biggest optimist of all. This sometimes forces them to borrow, in the hope that they will make a killing. A hot tip here, a slight upward movement in a certain stock or a credible rumor. All are sure signs of big bucks for a compulsive investor. This is a recipe for disaster. Reign in your financial horses and wait for better days. The economy will rebound sooner than later.

Subprime losses are the engine which drove the economy into recession. Gross avarice and greed on the part of Bankers and a knowing wink from policy makers has lead to this situation. It is therefore unlikely that real estate investments would pick up in the near future- if ever. It is best to cut losses and move away from the real estate market. Sale of property at prevailing rates is the only option even if it means loss.

Many of us have purchased real estate as an investment. Some use them as weekend gateways. Letting out your second home is a good option you must consider. This will bring you a steady monthly income while you wait for the real estate to appreciate. Idle real estate is no longer viable. If you have a farm house you should explore the possibility of growing fruits and vegetables. This can fetch you a tidy income.

Survival tips for the common man

Many highly popular books have started giving the impression that one can become rich only by investing passively. This mindset has taken root in many US citizens. Work is only passé. Taking financial risks means rewards. It is only now that millions have realized the fallacy of it all. For some it is too late. We have to get out of this apathy and disregard for hard work. In good economic times even the craziest ideas seem to work. But during recession one has to tighten ones belt.

It is an age old saying that money saved is money earned. Save a part of your income. Even ten percent is enough. You must not touch any of it for a whimsical expenditure like a holiday or on a luxury. Your credit card is your biggest enemy. You must bring your credit card liability to zero and then keep it away altogether. You must live within your means even if it hurts and pinches your lifestyle. Look at the recession on its face. Bad economy does not mean becoming poor. It is simply a warning to get your act together.

It is a great idea to start planning for early retirement. This will force you to think about your economic future. Investment in pension and retirement funds will secure your future. If you get laid off, at least you can retire to your little financial nest. Retirement is not a bad word any longer. It may even turn out to be the best part of your life.

Survival tips for businesses

The small businesses would be the hardest hit due to the worsening economy. It may sound depressing, but the truth is that many would be closed down. But one need not take it lying down. The smart guys have already started preparing for the days ahead by doing secretarial work on their own.

Modern technology is a boon for small businesses. Rather than renting out an expensive office, one can innovate and work from home. Finance and investment consultants, CPA’s, real estate agents and a host of other business can operate from home.

It is time to look at your accounts receivable. Businessmen should closely monitor their outstanding and reduce it as much as possible. If you hold stock, inventory should be minimized. Shift the cost of carrying inventory to your principal by using ‘Just in Time’ policy, which will save you from investing in dead inventory.

Have another look at your fees. Can you become more competitive? Instead of charging $100 can you get by with $75? Customers are looking for a bargain and reducing your professional fees will make them happy. Consider this to be one of your effective marketing tools during times of recession.

Recession is a big economic bully. It can make you do things which you would not otherwise consider. At the same time it is not necessary to surrender and succumb to it. Taking measured, well thought out steps to counter the threat is the only prudent way out. It is all a question of managing your finances.

Brian Schwartz, owner of various online businesses, encourages individuals to think outside the box and sharpen their creative skills, so they can live a more fulfilling and meaningful life. Follow Brian on Twitter at http://www.Twitter.com/EZas123

photo credit: eyeliam

A question I commonly hear is what reports should I use for my businesses and investments? I have several customized reports I use, but today, I’m going to share the 3 standard reports I use – these are reports that can be pulled from my accounting software. I use QuickBooks but these reports are standard in all accounting software packages.

- Report #1: Statement of Cash Flows -

Where does my cash go?

Does this question sound familiar? Many business owners and investors are constantly trying to answer this question as they scramble to make payroll or mortgage payments.

Whether it’s your business, your rental properties or your option trading, the Statement of Cash Flows report tells you exactly where your cash goes.

I like this report because it gives me a ton of information in one shot. It tells:

- My cash balance as of the start date of the report
- My cash balance as of the end date of the report
- My net income or loss for the period of time being reported
- How much cash went in and out from my normal operations
- How much cash went in and out from my investing activities
- How much cash went in and out from my financing activities

Here is an example of how the Statement of Cash Flows report helps me analyze my rental property investments.

When I pull a Profit & Loss report (also called an Income Statement) for my rental property investments, I see a net loss of $10,000. This loss information is helpful in my tax planning but not when I’m trying to assess how my properties are performing.

The net loss is due to large depreciation deductions, which are non-cash deductions, claimed on my rental properties. So, I have to pick apart the Profit & Loss report to figure out if my net cash flow from the property is positive or negative. While I want the information, I don’t want to spend a lot of time digging for it. This is why I l love the Statement of Cash Flows report – it does the work for me!

The Statement of Cash Flows starts with the net loss from the Profit & Loss report and makes all the non-cash adjustments for me. For example, it adds back depreciation. It factors in cash spent buying a new property (which isn’t on the Profit & Loss report because it’s an asset that gets reported on the Balance Sheet). And it shows the cash I spent to pay down the principal on my mortgages. (Remember that if your mortgage payment includes principal and interest, then the interest portion is included in the Profit & Loss report but the principal portion is not).

The Statement of Cash Flows answers the nagging question – where does my cash go!

- Report #2: Accounts Receivable Report -

As a business owner, I want to know who owes me money! I use this report to not only make collection calls, but to study my customers’ habits. Who pays me quickly? Who is very slow to pay me? I use this information to help focus my efforts on customers who pay me without any hassle and better manage those who don’t.

- Report #3: Accounts Payable Report -

I always want to pay my vendors on time. My accounts payable reports enable me to do this. Plus, these reports help me identify opportunities to negotiate discounts with my vendors, such as discounts for early payment. Those savings go right to my bottom line!

These are 3 reports you can access right now from your accounting software!

Tom Wheelwright is the founder, CEO and creative force behind ProVision Wealth Strategists, a full-service CPA and wealth strategy firm headquartered in Tempe, Arizona. ProVision coaches investors and business owners all over the world to financial freedom, creating vast amounts of wealth and business success for its clients. For more information, please visit http://www.ProVisionWealth.com.