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Financial Consulting

Perhaps your business is conducting business for many years but still start from the start that the establishment of a new business. In the first stage we can say that your business is worth the money you invested in it. If the cost of building your business costs a million dollars on paper at least that’s what it’s worth before adding values ​​granted to the reputation of the contractor or the degree of leverage in its construction (= part of foreign capital investment). Unfortunately, looking at the many businesses that were established financial planning usually biased downward and many developers, especially inexperienced ones, do not take into account the capital costs resulting from loans (interest rate is the price of money), the minus and growing every month order of hundreds of thousands of dollars (millions large businesses) to reach operational break-even point, which is the moment when revenues compare to operating expenses, the time it takes to return the cumulative minus bank and only then begin to gain operational business and still have to recoup the investment of one million dollars.

In fact, at any time to evaluate the solvency of the business. Solvency = ability to pay. It is a condition in which the organization can pay all his bills and does not depend on the business cycle or salary but on whether the petty cash income + Construction of a reserve.If a business can pay off all debts immediately then you could have a solvency of 100%.

In practice, managers often times they also own the business, tend to produce excessive costs, those that do not generate more income, and “msdrgim “the conditions of their employment by purchasing / leasing a new vehicle, pulling a higher salary, etc. at the expense of” business “, but business belongs to them and the meaning is actually unnecessary. An important rule in business is to invest in what generates more income. A good friend I knew was a very successful year in business then at the end of the year he decided to buy a jeep. Tax savings claim is unfounded because no purchase that he made expenditure reduces the reserve and if it also increases running costs. Now he may go in the jeep but paying more each month and have lost several thousand dollars on a decline in value. If you had bought the vehicle for increasing the capacity of income, such as the taxi rank, then I would encourage him to do so. Similarly, I came across managers seemed good to them going to their fitness club due beautiful success in recruiting members and therefore upgraded their salary, car or house. They just forgot to return service to subscribers while costing hundreds of thousands of dollars a month and a few months a little less successful in the business have left them with a hole in my pocket, a high tax on larger salaries and more expensive car worth less now.

Another common mistake is using the financial conduct payments. I once heard someone say, “Never will the money of others dear to you as your own,” Really? True meaning of the payments is that we do not use the money in fact no longer belongs to us. If for example we purchased LCD screens in the gym – 12 payments, then we have someone else the whole amount of money raised screens and we use the money belonged to him. Of course we intend to return the money in full but at the same time significantly decreased income requirement (requirement is faith and thought that must achieve a certain thing).

An extreme example of this situation is dealt with (name withheld in) assisted by providing credit to commence at any time with any amount of money customers actually pay fee in installments and that it transfers the full amount in cash. Business came to him created an 11-month lag due to payment of an annual subscription money received and has been exhausted and contrast the business was still rests with the duty to provide a full year of service to its customers. To better understand the point I will note that the business’s operating costs were approximately – 300,000 ₪ month or so and really means that this conduct business has debt of about ₪ 3,300,000 they amount required for 11 months of activity.

Therefore, if you want to buy something, buy it new money or savings. If you fancy buying new LCD screens for business and they cost ₪ 15,000 to Get them out of the savings or the pot. Now there is new demand more money so I just worked and worked some required that produces 15,000 ₪ more month and then bought the screens the LCD after you have accumulated the required amount. Remember, your customers also practiced before. Do not kid yourself that because it would leave. Invested in the business but do so in new money. My particular customer, who is also a skilled administrator, was needed more as – 20,000 ₪ end of the month. So he just told them of his team. He set them a target of 10 more additional subscribers in recent days of the month and told them that with it will take them out to dinner at the expense of business. The team joined the mission, made phone calls graduates to plow, call abandon not renewed, those interested who have not joined, and finally was the target. In fact this is a victory on all fronts, the team challenged, raised his confidence in his ability, improved business income and enjoy a few more customers benefit from a good fitness club.

Purchase payments, loans and future liabilities are recipe for future debts, and often bring financial collapse. If you can keep paying in cash. First you’re not operate instinctively discretion and ask yourself again Is this purchase really necessary? Is she expected to generate more income? You also will find uncomfortable part of the amount of money in cash because that usually was not easy to accumulate it. Receive a cash often significant discounts as well as save money.

Even if the business was a good month to rest and get back the level of the previous request – set challenging targets and higher. You have complete certainty what will happen tomorrow. War, recession, stiff competition and other factors can adversely affect the business situation. Many businesses in the north were closed after the Second Lebanon War because they did not have enough money to spare go through a difficult period of two to three of them suffered from lack of customers. Keep extra emergency savings income.

Another error is to conduct financial planning for future purchases on money not yet received. The money should be such as customer payments may not be time (returned checks, cancellations, etc.) then your program undertake to others becomes a debt and arrears paid. The same thing happens in private life, people find money for acquisitions and rely on to cover them next payday. Unfortunately life is full of surprises and just spoiled in that month you created your vehicle and unplanned expenditure of several thousand dollars.

Pay on time. Compliance payments with your suppliers, compliance with obligations in front of your employees and your customers will create confidence on their part.Confidence on their part it was worth a lot of flexibility and help them if necessary or in crisis. Basically, money is a matter of trust as well as credit. When my client suddenly received a surprising request retroactive payment of property tax information from the municipality at hundreds of thousands ₪ He needed no little flexibility from all those to whom he has to pay. Because I trusted one hundred percent not had a problem let him and because of my own creation and I reserve to myself “have” the money now. Due to the excellent reputation that this customer, so were many others with him also.

Do not rest even when everything goes well for you. Do not settle for status quo, continue to produce a positive impact and contributed to improving the lives of others. As you work more for improving the lives of others and produce more positive impact on your environment, they will reward you additional purchases and ensure the continued existence and expansion of your business. Wishing you create a positive impact, improving the lives of others and making plenty of money in compensation.

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