Category financial planning

Cash flow is an on-going challenge for independent retailers, as it is for many small businesses. Sales growth remains modest at best, and credit remains largely unavailable to many independent retailers. That puts many squarely behind the eight ball.Here are 6 tips that can help you drive more dollars to the bottom line:

1. Focus your marketing on your proven customers. These are the customers who have demonstrated already that they value what you do and the merchandise you sell. (What else can you offer them?) These are customers who have shared their email addresses with you. This is your List, and it’s one of the most valuable assets you have. Marketing to these customers is much less expensive (and more productive) than marketing more broadly using expensive traditional media, like newspapers and magazines.

2. Turn your inventory. Having more doesn’t mean you’ll sell more, especially when the extra inventory is in unnecessary depth of stock or in items at the fringes of assortments. Lean inventory, closely aligned to support prudent sales plans, promotes a greater sense of urgency with customers to buy now, when they first see it, rather than wait for when it might go on sale. Replenish more frequently, in smaller quantities, continually bringing in new, fresh, exciting merchandise.

3. Don’t compete with yourself. Most independent retailers should adopt a Better-Best or a Best-Only pricing structure. Offering too many options where customers can trade down to a less expensive item leaves money on the table and slows the turn on the higher priced offerings, thus lessening their perceived value. If consignment merchandise is part of your mix, make sure they complement rather than compete against your assortments.

4. Get paid for what you sell. Sales and promotions melt away cash flow, not to mention the fact that they lessen the perceived value of your offering and encourage customers to wait for the next sale. Getting paid also requires, however, that you fully mark up your merchandise in the first place. Markups tend to naturally erode as wholesale costs increase and retail prices don’t fully keep up, unless you actively manage your markups to keep them where you need them.

5. Make payroll a manageable expense. For most independent retailers, payroll is the largest cash outflow after merchandise payables. A payroll that is primarily made up of salaried and full time hourly employees may provide a level of stability but can be pretty inflexible and can create significant cash flow challenges, particularly during slower periods. A more balanced payroll, between salaried and full-time hourly employees and part-time employees, provides the flexibility to more closely align payroll dollars with when they are truly needed.

6. Stop doing things the way you’ve always done them. Familiarity is comfortable, but it leads inevitably to diminishing returns. Customers thrive on newness; on new merchandise, presentations and experiences. Repetition breeds staleness, and that will drive customers elsewhere. The most successful independent retailers are always re-inventing themselves, testing new items, programs, presentations and concepts.After all that we’ve been through, how much cash flow is enough? It’s not enough just to be cash flow positive. The challenge is to generate exceptional cash flow from the sales revenue you are generating, even as you work to grow revenues even further.Copyright ?? 2012 Ted Hurlbut

Top-up covers are, to put it simply, additional health insurance covers that take care of medical expenses that go over your main policy cover.How Do Top-up Covers Work?Top-up covers work on the deductible sum insured concept. Deductible amount means the amount which you have to pay first so as to trigger the top-up cover. You can pay this deductible amount from your existing / base health insurance policy, or out of your own pocket.Here’s an example to explain this better:The question would arise in your mind regarding the necessity of having a base policy to purchase a top-up cover? Though the base policy is a requirement, you can still buy a standalone top-up cover where you do not have any base policy. In this case, as suggested earlier, the deductible amount will have to be paid from your pocket and all the standard waiting periods and exclusions would apply for this as it would for a regular policy.

Standard waiting periods:It should be ascertained that when you purchase a top-up cover the deductible amount should match your base policy sum insured otherwise the difference would have to be borne by youWhy opt for a Top-up Cover?The simplest reason for buying a top-up cover is that your health insurance policy may not always be sufficient when it comes to large medical expenses. Let us take the example of Aditi:Aditi is a young corporate professional. She has health insurance for Rs.3 lakh. One day, she is diagnosed with a serious illness and is hospitalized for treatment. Within 5 months, her health insurance policy has been exhausted due to the treatment being very expensive. Luckily for Aditi, she had taken a top-up cover of Rs.10 lakh, with a deductible of Rs.3 lakh. So her medical bills continue to be paid without any trouble.Top-up covers are also useful if you are a senior citizen, or approaching that age. As you grow older, getting an increase is the sum insured of your base policy will be difficult and expensive. The premium rates will be very high and there will be numerous medical tests to undergo as well. In this case, having a top-up cover means that you can stick with your base policy, while letting the top-up cover take care of any extra expenses that arise.

To illustrate this better, let us see the example of Narayan and Irshad.Irshad and Narayan joined the same company together when they were 25 years old and have been working there for 27 years. All these years, their employer had been providing health insurance for them, for Rs.3 lakh each. Now, at the age of 52, they want to change jobs and move to another company. Unfortunately, this company does not provide health insurance for its employees, and they both have to buy their own individual health policies. They both realise that as senior citizens with greater health risks, a Rs.3 lakh policy is no longer sufficient, so must go for a higher sum insured.Narayan had remained content with the health insurance provided by the company. Now, when he goes to buy an individual policy, he finds out that there are numerous medical tests for him to take, and that when he finally takes insurance for Rs.10 lakh, the premium is extremely high.Irshad, however, had taken the precaution of buying a top-up cover for Rs.15 lakh, to go with his employee health insurance.

Now, he does not need to buy a policy with a higher sum insured. He simply takes a Rs.3 lakh policy. He knows that though a Rs.3 lakh cover alone is not sufficient, his top-up cover will take care of any extra expenses.In the end, Irshad’s precaution of buying a top-up cover many years ago means that now he has to pay far less in premium amount, whereas Narayan must pay a very high premium while having less cover than Irshad.So go for a top-up cover to secure yourself against health-related risks to your lifestyle and savings, and jiyo befikar!To learn more about the Bajaj Allianz Extra Care Policy and how it can extend your health insurance, click here.

Freddie Mac’s recent Primary Mortgage Market Survey shows that the 30-year fixed-rate mortgage slipped to 3.78 percent yesterday, a slim drop from the averaged 30-year fixed-rate mortgage of last week which was 3.79 percent.In the meantime, the 15-year fixed-rate mortgage remained unchanged from last week’s average 15-year fixed-rate mortgage at 3.04 percent, this according to Freddie Mac.”Mortgage rates were virtually unchanged this week with fixed-rate loans remaining at record lows and helping to drive homebuyer affordability,” Frank Nothaft, vice president and chief economist of Freddie Mac, in a statement said.Two home affordability indexes, the National Association of Home Builders/Wells Fargo Housing Opportunity Index and National Association of Realtors (NAR) Housing Affordability Index, show record high home affordability in the U.S.The home affordability index of the National Association of Home Builders/Wells Fargo shows that 77.5 percent of the existing and new homes that were sold in the nation from January to March this year were affordable to families earning the national median income of $65,000.

The composite quarterly housing affordability index of NAR, meanwhile, shows that the housing affordability index jumped to 205.9 in January to March of this year.NAR reported that this is the first time that the composite quarterly housing affordability index hit the 200 mark since 1970, the start of housing affordability index recordkeeping.NAR’s index is based on the relationship of these three factors: median home price, average mortgage interest rate and median family income.”For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present,” NAR President Moe Veissi, in a statement said.Barry Rutenberg, chairman of the National Association of Home Builders, in a statement said, “Homes in this year’s first quarter were more affordable than they have been at any time in more than 20 years, yet many potential sales are not happening because of overly tight lending conditions that are keeping hardworking families from obtaining a suitable mortgage.”The chairman of the National Association of Home Builders added, “Without this (tight lending condition) significant hurdle, the housing and economic recovery could be proceeding at a much stronger pace.”

Most small business have already acquired Sacramento bookkeeping solutions to help them in carrying out administrative and labor expenses for them to be able to take charge with their business affairs. In the process of financial transactions recording, monitoring of cash inflow and outflow is involved. The task comes under the company’s finance department supervision. This is a vital function that helps keep track the profit earned, the money spent and borrowed by the company. This helps in further analysis of the company’s financial status. Utilizing the data collected by the accountants, financial analysts can easily assess the company’s financial health. Most of the big companies hire accounting firms for this function. It is easier to hire professional services rather than hiring full-time employees for this kind of matter. And since the large companies have taken the plunge in outsourcing financial functions to accounting companies, smaller companies have also begun preferring acquiring work from Sacramento bookkeeping solutions.

Employing external agency for this purpose also proves to be a more cost-effective strategy than hiring a full-time employee. This allows organizations to outsource more employees focusing on the primary sectors of the entire business. This aids the companies to hire financial analysts which are very helpful in planning financial undertakings as well as analysis of the every transaction the organization has dealt with. Sacramento bookkeeping firms provide services that adhere to the security and confidentiality of the clients’ data. These firms provide service with consultation and even provide advice for further improvement of the business model. These are geared towards profit boost for optimal benefits. These agencies are armed with expert accountants offering services as desired by the clients. There are also those who provide online accounting services which is preferred by a lot of companies as it is made accessible to everyone at any time of the day. This feature is available in retrieving data anytime. It has user-friendly interface and an updated online system.

Sacramento bookkeeping firms can also aid in various financial planning aspects. They can be a great help in the formulation of forecasts as well as in efficient strategic planning. This can also help minimize the expenses and maximize the profit. The service fees vary depending on the work type, quantity and complexity. There are monthly rates which some companies may charge for each financial report. In order for you to succeed in your business ventures, hiring Sacramento bookkeeping services may prove to be a worthy endeavor.