Archive for the 'Budgeting' Category
Monday, August 11th, 2008
Thanks to Chris Metcalf for permission to use this Photo.
In the hyper-competitive business environment of today, there are millions of dollars invested and mistakenly often wasted by companies looking for the “next big thing,” the elusive innovation that will electrify the marketplace. When most people think of innovation, they automatically consider it in the technological sense, but innovation means much more than producing a faster computer or a telephone that doubles as a home entertainment system; innovation is ultimately about ideas. In the following video, innovation expert Charles Leadbeater discusses how innovation isn’t just reserved for the corporate giants with infinite capital, but rather how independent thinking entities, people like you and me with a vision, are now empowered like never before to compete in the marketplace on our own terms. I found this presentation both informative and inspiring. I hope you feel the same way after viewing it and approach your next lesson with a sense of enthusiasm. Click on the image above to watch this video.
Ryan Rode
Interactive Services Manager
Ashworth University
Posted in Branding, Blogs, Interactive, Innovation, Viral, Advertising, Life and Work, Business Culture, Customer Service, Budgeting, Retail, Emerging Markets, Economics, Consumers, Internet Marketing, Marketing, Business 2.0, E-Commerce, Finance, Career Enhancement, Sales, Video, Gaming, Networking, Websites, SEO, Leadership, Small Business, New Media, Management, Entrepreneurship | No Comments »
Tuesday, July 15th, 2008
Thanks to jean poole for permission to use this Photo.
I’d like to discuss the challenges of accounting for stock options used as compensation. Stock options are very popular with start-ups and firms expecting high growth. The reasoning is simple. Both types of firms have huge cash flow needs today. If they had to rely on salaries to attract employees, they most likely would not be able to afford the talent they really need to grow the business. By awarding their employees stock options, the right to buy stock in the future, they delay part of their compensation expense. Stock options give their holders the right to buy stock in the future at a specified exercise price. Typically, the exercise price is higher than the current market price of the stock. This gives employees incentives to take actions that will raise stock prices, including actions that favorably distort earnings.
The problem with stock options is that the company records no compensation expense for them. When an employee exercises an option, the firm must have a share to sell to the employee at the exercise price. Usually employees do not exercise their options until they are “in the money,” meaning the market price is higher than the exercise price. At this point, the company has to buy back stock at the higher market price to sell to employees at the lower exercise price or issue new shares or issue shares from treasury stock. In any event, this is a real cost to the firm. Currently, this expense does not appear on the income statement. It has only recently become a requirement to disclose the expense in the footnotes to the financial statements. For a company like Microsoft that makes extensive use of stock options, this severely overstates reported earnings.
I discuss a couple of increasingly popular tricks used by struggling companies to boost reported earnings in your lesson reading assignments. The first is stock buybacks for the purpose of reducing the number of shares outstanding. By reducing the shares, the EPS rises. This causes the stock price to rise. The important point is that no value is created in this transaction. The same earnings are now concentrated in fewer hands, so price per share will go up even though total market value is constant.
Another troubling development is the creation of earnings definitions other than net income. In order to distract attention from earnings reported according to GAAP, companies will often present alternative definitions of earnings such as pro forma earnings, core earnings, or EBIDTA. Their argument is that GAAP earnings are not representative and the firm is trying to present a more accurate figure for its true earnings potential. The problem with this is twofold. There are no accepted definitions for any of these alternative earnings measures. Second, in practice, the items excluded from these earnings calculations tend to be ones that lower the firm’s earnings in that accounting period. Beware of the firm that presents “pro forma” earnings. The correct use of that term means forecasted earnings in the future. Firms today are increasingly using the term to mean, “This is what our earnings would have been if all these bad, non recurring things had not happened to us.” Often these things include depreciation and interest—I certainly don’t think these are non-recurring expenses!
Lee Woodward, CPA
Financial Statements Instructor
Ashworth University School of Business
Posted in Economics, Retail, Budgeting, Stock Market, Management, Sales, Finance, Accounting | No Comments »
Tuesday, July 1st, 2008
Consumer confidence (the term used by the Conference Board) and consumer sentiment (the label used by the University of Michigan) are not quite at their all-time lows, but they are very close to them.
This seems a little odd because two of the biggest elements of consumer attitudes, unemployment and inflation, are quite benign.
Unemployment, at 5.5 percent, is a hair below its long-run average (5.6 percent). Inflation (all items) is 4.1 percent, only a little above its long-run average of 3.7 percent.
Why the doom and gloom? (more…)
Posted in Debt, Emerging Markets, Consumers, Economics, Life and Work, Business Culture, Retail, Real Estate, Consulting, Recession, Budgeting, Customer Service, Credit, Stock Market, Innovation, Career Enhancement, Finance, Sales, Entrepreneurship, Investing, Business 2.0, E-Commerce, Small Business, Leadership, Management, Loans, Savings, Accounting | No Comments »
Wednesday, June 11th, 2008
Image courtesy of Mike Maddaloni.
There’s that store over on the corner. It is one of your favorite stores or you just go there once in a while. But the next time you go by, it’s closed. Not just closed for the day, but closed for good. You feel bad as you liked going in there, but you may not have gone in there that often. You think to yourself if you only knew that they were near that point you could have done something – blogged on them, told your friends or simply went in there more.
For me there were 2 such places, an awesome Vietnamese/fusion restaurant and a coffee shop. Now a jeweler and a check-cashing store stand in each respectively. But what if each owner reached out to its customer base for help, would I have responded? I asked myself as I read about Toscanini’s, an ice cream shop I have visited in Cambridge, MA in a recent issue of Inc. magazine. In this case, getting behind on paying their taxes resulted in the store closing, and after an Internet appeal they were able to raise enough money to reopen.
As I said before, you can’t mess with the numbers. However, they did and paid the price for it, literally. Had they reached out earlier to their customers, how would they have reacted? How would I have reacted? (more…)
Posted in Life and Work, Business Culture, Blogs, Branding, Interactive, Consumers, Emerging Markets, Consulting, Recession, Budgeting, Customer Service, Retail, Innovation, Advertising, Business 2.0, E-Commerce, Finance, Career Enhancement, Sales, Management, Small Business, Internet Marketing, Marketing, Websites, Leadership, Entrepreneurship | No Comments »
Wednesday, May 28th, 2008
Thanks to freeparking for permission to use this Photo.
One of the strongest characteristics associated with successful entrepreneurs is the ability to lead. As a small business owner, it’s impossible to be everywhere at once, directly involved in every aspect of the decision making process, therefore you must be able to trust your employees to make sound decisions on your behalf. This is one area where leadership plays such a vital role. Your ability to communicate your business vision and get your employees to buy into that vision is deeply connected to building a productive workplace environment. Here is an interesting podcast interview with Marshall Goldsmith, a leadership training expert who specializes in training small business owners how to be leaders and in turn cultivate leadership qualities in their employees. Goldsmith makes some good points about common issues limiting the growth of small businesses, then prescribes concrete methods to resolve these issues. Click on the image above to listen to this podcast. I think you’ll learn some lessons that will stay with you throughout your career. Take care.
Ryan Rode
Interactive Services Manager
Ashworth University
Posted in Life and Work, Branding, Innovation, Websites, Business Culture, Economics, Budgeting, Customer Service, Retail, Leadership, Small Business, Career Enhancement, Sales, Podcast, Finance, Business 2.0, Management, Savings, E-Commerce, Entrepreneurship | No Comments »
Friday, May 16th, 2008
Image courtesy of jeff magnum-orange twin.
From Brian Grinonneau:
Dare to be different. A look at why advertising professionals should consider standing out from the competition, not copying them. To make your advertising work, follow the principle if your competition is doing it, don’t. To succeed in today’s crowded marketplace where most of the products and advertising look exactly the same, a small business owner must stand out, shouting above the din with a message so clear and compelling that prospects stop and take notice. It’s a matter of business survival. Unfortunately, most entrepreneurs quickly retreat to the supposed security of sameness, soon to be lost in a sea of anonymity and a tidal wave of frustration.
In effect, albeit at a subconscious level, they are saying , “I don’t want to be different”. In back room offices and store fronts everywhere, salespeople are telling business owners they should do this or that kind of ad because it worked so great for their competitor. The owners nod and sign on. It’s already proven to be a winner, right? WRONG! Change the name, background color and a font style and you’ve got sameness. Put those ads in the yellow pages, a coupon magazine or a TV commercial cluster and you’ve got advertising death. Want proof? Get the latest statistics on small business failures.
About the author: Brian Grinonneau is the general manager of McMann and Tate advertising, an agency that works with small business owners helping them stand out from the crowd.
Article Source: http://EzineArticles.com/
Copyright © 1996 - 2008 Experience, Inc. - All Rights Reserved
To read more of Brian Grinonneau’s great article, login to the Ashworth University Career Center through the student portal and click here.
Ryan Rode
Interactive Services Manager
Ashworth University
Posted in Interactive, Branding, Innovation, Internet TV, Advertising, Affiliates, Blogs, Portfolio, Budgeting, Economics, Business Culture, Life and Work, Viral, Internet Marketing, Finance, Business 2.0, Career Enhancement, Video, Sales, E-Commerce, New Media, Marketing, Websites, Leadership, Management, Entrepreneurship | No Comments »
Tuesday, May 6th, 2008
While the “experts” continue to debate whether our economy is in a recession, the rest of us working in the real world have already determined that the semantic definition of this crisis is the least of our concerns. In the following podcast interview, Dale Collie, a former corporate executive and elite U.S. Army Ranger shares the lessons he has learned throughout his life on how to cope with the stress caused by difficult circumstances. Although focusing primarily on how the business manager of today can effectively lead, inspire, and provide stability to workers during times of economic hardship; this podcast also offers some “big picture” perspectives that anyone can apply in their personal lives as well. I think you’ll enjoy this podcast. Please share your thoughts in the comments section of this post. I’d also like to thank Bill Conerly for conducting this outstanding interview. Thanks…
Ryan Rode
Interactive Services Manager
Ashworth University
Posted in Consumers, Debt, Economics, Business Culture, Life and Work, Retail, Credit, Recession, Consulting, Budgeting, Customer Service, Stock Market, Blogs, Finance, Business 2.0, Career Enhancement, Sales, Entrepreneurship, E-Commerce, Loans, Advertising, Leadership, Small Business, Management, Investing | 2 Comments »
Wednesday, March 26th, 2008
Thanks to Rashida Simmons for permission to use this Photo.
OK, I know what you are all thinking! It’s spring; the daffodils are blooming; the cherry trees are in full blossom; the birds are singing their happy springtime songs; the sweaters have been packed away; love is in the air; so, what is the problem? Why would someone begrudgingly say, “It’s THAT time of year, again?” What could possibly be the problem with spring?
April 15th is upon us and this is a date which strikes fear into the fiercest of hearts! It is a time when the good citizens of our country must file their income tax returns. “The National Bureau of Economic Research has concluded that the combined federal, state, and local government average marginal tax rate for most workers to be about 40% of income” (Wikipedia, 2008). According to Brigham and Houston (2000), that figure could reach about 50% for some taxpayers (p. 61). What does this mean for all of us? It means that a large portion of your total earnings are due in the form of tax payments. In other words, you must work from January through April or May to pay your tax debt.
Those of you who have been working for several years understand this concept more than some who have not yet held a job or filed their first income tax return. For the entrepreneur, this concept takes on an additional meaning. Not only will you have to file income tax returns for your own personal income, but you will also be responsible for filing corporate tax returns. This is the reason why folks, who are about to start their own small business, need the services of a qualified tax accountant.
If the thought of deciphering tax laws makes you a little crazy, do not worry! According to Eugene Brigham and Joel Houston (2000), authors of Fundamentals of Financial Management, “Taxes are so complicated that university law schools offer master’s degrees in taxation to lawyers, many of whom are also CPAs” (p. 61). The good news? We don’t have to know all of the tax laws to own and operate our own businesses and to be successful; we just have to hire the right CPA.
As an entrepreneur, you should be aware of the following taxes: Payroll taxes, Corporate, State, Local, Government, Income, Sales, and Property taxes. To emphasize the importance of understanding the objectives of taxation, let’s take a closer look at just one form: payroll taxes.
Payroll taxes include Social Security and Medicare tax. Employees are required to pay taxes on all wages and salaries from their place of employment; however, individuals must also pay taxes on investment income and on profits which are generated by proprietorships or partnerships. The Social Security tax, listed as FICA on your paycheck stub, is a 6.2% tax of the income generated by the employee and matched by the employer. How does this affect the small business owner? You actually have to pay double tax on your earned income to the tune of 12.4% because you are the employee AND the employer. One piece of good news, this tax is not applicable to income which has not been earned (i.e., income from interest, dividends, or royalties). (more…)
Posted in Debt, Consumers, Credit, Budgeting, Taxes, Economics, Life and Work, Finance, Savings, Management, Small Business, Investing | No Comments »
Monday, March 24th, 2008
Photo courtesy of Hussein Alazaat
The Small Business Trends blog has an interesting article, Four Mistakes Entrepreneurs Make in a Recession (the title of which I’ve modified for the title of this post, for SEO reasons).
I’m going to add another mistake, but first let’s review Scott Shane’s four mistakes:
1. Failing to take advantage of decreasing costs. [good point; I made this in Businomics]
2. Thinking the only way to increase demand is to cut price [also a good point]
3. Failing to recognize increased competition. [sometimes true, especially across normal industry lines; for instance, residential contractors may move into non-residential work when their sector weakens.] (more…)
Posted in Budgeting, Recession, Debt, Economics, Business Culture, Finance | No Comments »
Wednesday, March 19th, 2008
Thanks to PQZ for permission to use this Photo.
With regard to marketing your residential property, it is imperative to remember that first impressions can be made only once. That is why curb appeal is so important. Renters want a clean, attractive, safe, and comfortable environment. When you provide that environment, potential renters will leave with a positive image of your complex.
You have 30 seconds to make a positive impression on the prospective renter. Be polite, positive, and interested in their specific needs when you’re touring prospective tenants through the property. “Read” the customer to see what he or she is interested in when renting. If you can find out what interests renters, you can gear your presentation to their needs.
Marketing is essential for the success of the property. Most residential properties lease units for a term of one year. Even though many residential renters continue to rent the same unit, there is still the possibility that each unit could become vacant if the existing renter does not renew. With that in mind, you need to be prepared to fill a vacancy at almost any time.
When preparing your budget, look over the past year’s expenses to get an understanding of what the needs of the property are. However, never simply take last year’s expenses and add a percentage to predict the next year’s expenses. Properties age differently, and you must perform periodic inspections to determine what fixtures and components are starting to wear out and when they will need to be replaced.Some properties host excellent tenant social functions that the renters love. Give them entertainment and a way to mingle with each other, and you can create a very solid community of people who will stay year to year even when the rental rates increase. Remember, some groups of people like apartments for their social life, and capitalizing on that could reap your owner excellent financial returns.
Chuck Perme
Property Management Instructor
Ashworth University
Posted in Credit, Real Estate, Customer Service, Budgeting, Property Mgt., Consumers, Economics, Career Enhancement, Management, Marketing, Advertising, Sales | 1 Comment »
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