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Archive for the ‘Financial Tips’ Category

Make a proper financial plan is an exercise that requires significant knowledge of basic financial tools. First of all we have the basics of corporate finance and accounting very clear, and you have to master the structure and different components of a company’s financial statements. But to build a good financial plan is also very desirable to have a solid background in business management and have experience estimating and modeling business variables.

It is very common for a professional who has worked primarily in technical areas or an entrepreneur who needs to create the financial plan your business have deficiencies in some of the points mentioned. It is unusual for a professional or an entrepreneur ever have modeled a business financially, so they find a particularly difficult and complex, and they feel very inseguros.fiananzas

After years of reviewing financial plans for business development projects of the students in the MBA program at the EOI Escuela de Organización Industrial, I like to point out five tips that may alleviate the sometimes insurmountable deficit of experience of not having made a variables and estimate a company’s financial modeling.

1. Understand the business

We must become a little expert in the field in which you want to work. Even if it is a very technical field is desirable to learn a minimum knowledge allowing us to understand the business. This will, contrast and understand all information used in the plan. The aim is to prevent parts of the project has become for us a black box that can only be interpreted by the business manager or a technician in an area.

Conclusion: You can not model something that is not well understood.

2. Use common sense

It is very usual common sense left out of the spreadsheet that we created. Take the basic assumptions of the model using common sense. Seek the arguments you would use if someone rebutting these hypotheses to contrast and see if they are solid arguments or not. As you progress in modeling occasionally look back and be critical of what they’re doing. It is customary to take hardly defensible hypothesis or disprove the initial hypotheses also to get into the modeling exercise.

Conclusion: It is essential to use common sense and be very critical of our model.

3. Make a simple exercise

The spreadsheet is a very powerful but very dangerous tool. It is common to find an entrepreneur bogged down with cumbersome financial model that has gotten out of hand and without being able to square it. Experience shows that make a very detailed planning exercise does not imply that a better financial plan. The aim is to anticipate what will happen, and this is best done with a simple model but correct.

Conclusion: It is always best to make a simple financial model and complicate later.

4. Simulate the cash flow statements in the long term

Many books state that the cash in the financial plan allows you to square the balance. Many entrepreneurs believe that it is therefore necessary to create a box to reach cash flow equal to the duration of the project. That’s true if you have modeled everything right in the profit and loss accounts and balance sheet. But usually the first modeling of a project to have some inconsistencies, so it is recommended to estimate the three financial statements (income statement, balance sheet and cash flow) and try square. The probability of not having treated uniformly an element of the plan in the income statement and balance sheet is reduced so much.

Conclusion: use the cash to match the balance is very dangerous because it does not detect inconsistencies in the financial model to operate the cash balance as a cushion to hide any errors.

5. Create scenarios

Sensitivity analysis is an exercise that attempts to see the sensitivity of our business plan to the variation of the main variables of the project. Despite having such a powerful tool for this task as the spreadsheet is not usually enough time to devote to this exercise. Experience shows that the probability that the key variables behave as we estimated in the model is not very high, so creating scenarios is essential to understand what actually might happen.

The act of negotiation has always been a reliable weapon for customers and a terrible fear of business. In the case of credit card debt, you can go and negotiate with credit card companies and banks, but you must be prepared to combat the situation. But before you seek the elimination of credit card debt, you need to digest some personal financial advice, so do not lose track in the middle. As we all know, the whole world has witnessed a roller coaster of financial stability in the past year. Also this year, the crisis is being felt, we are never sure before major disaster. Programs to combat the negative effects of the recession will be hired to support customers and have many attractive offers. However, there are some requirements you need to contact us, and make sure that we also meting convince these conditions, be eligible for trade.

Once you realize that you are a candidate worthy of the negotiations, you must cross your fingers and do your best. The cream of the personal financial advice is the best show in the debt settlement company that you can navigate through this wind and to make sure to find an attractive offer. The only purpose of the scheme, there is a bridge between business and the lender so they can synchronize their financial obligations. You should be aware that they have the reputation and history of the history of the company a much more established. You should try to find the best performance in your environment and allows them to present their case, so you can be sure to get an exemption of beauty.

Another important part of personal financial advice is your relationship with the company’s liquidation. It is very necessary to have a degree of transparency in their business and become self-sustained. You should explain all the reasons not to repay the amount, and should also highlight their plans to use the second chance. You also have to demonstrate to all states and not try, do not hide a party to them.

Expectations and forecasts of the experts are uncertain, some guarantee a better year for SMEs and some others, on the contrary, predict a difficult year. Thinking about the economic welfare of SMEs is closely related to its ability to maintain a constant capital income to their coffers because their margin of savings are not allowed to function for long without obtaining financing and to help our readers whatever the economic situation facing SMEs, here are a few tips to help you get financing for your business:

* Clear objectives

Before beginning the search for sources of financing for SMEs have to analyze your financial needs superimposing their business goals. A detailed analysis of the current and future financial status of the company is the first step to getting the most appropriate financial service to the company.

* Tie financial services needs

On the market a broad portfolio of financial services that help SMEs obtain liquidity so the job is to find one that goes better with the goals and needs of our company or business.

* Order

Once the SMEs have been selected for the service they need the main thing is to put order at full operational documentation, fiscal, credit and financial

* Select the best creditor

SMEs have to make an intensive research on which company would be the best option that will provide the financial service they need. The aspects that must be taken into account in its selection is the time the credit company operates in the market, its customer base rapidly in the credit approval process and funding, flexibility, commissions, interest …

* Making a payment plan before acquiring credit

Finally, once the selected SME financial service provider this, the company has to make a financial strategy to amend its budget so as to cover the monthly payments, bi-or half-yearly return to the credit purchased.

Remember, for a financially fit and healthy you should be informed, analyze and act according to your needs, situation and objectives. SuDinero.com.mx wishes you success in your company or business.

Tips for business financing

When talking about economic issues, one of the major problems in small financial planning business is because “generally know how to properly manage their resources and prepare to have an emergency fund during bad times,” say experts.

It happens with many companies, when they start to go well they forget to plan and lose sight of the risks they may suffer, especially in times like this that the economy is so volatile, said the director of the Administration degree from the Technological Institute Autonomy de Mexico (ITAM), Maria Gomez Albert.

“The cost of a consultancy, such as an independent accountant to the business may represent about 10% of total company expenditures,” which is not much when considering the results that this decision could represent the future, expressed Vabella specialist and Associates, Lorena Brandis

By creating management strategy for your business, it is important to think about issues like the recession. That does not mean life thinking that the company may quit overnight, but be conscious of the evil ‘spells’ that may arise and how to avoid it. Here, some tips for making good use of your resources. Read the rest of this entry »

The following commands in a macro financial cover the aspects of high finance have in mind for structuring a financial strategic direction.

1 – Profitability.

Dupont analysis will show the profitability generated by the company, if it’s affected the final outcome Leverage also show the return for shareholders, is actually more economically viable financial return. A higher rate, the better.

2 – Insolvency.

The model includes 9 indicators that Fulmer interelacionados properly will show an index which indicates the possibility of bankruptcy. The higher the outcome, the better. Below 0 the liquidity problem will be great if conditions do not change immediately.

3 – Growth.

One of the most important aspects to evaluate; growth for growth makes no sense, you have to grow profitably requires favorable.Se 2 indicators relate, EBITDA and productivity of operating net working capital, on which has already referred the author’s previous article. If the relationship shows a result less than 1, the company will not be able to finance the largest turnover. Currently, this index becomes a critical tool for making high financial management. Read the rest of this entry »