How do you measure the risks and rewards that are associated with your business

How Do you Measure the Risks and Rewards That are Associated With your Business?

Entrepreneurs are risk takers by nature. Whether it is the formation of a new venture or the expansion of existing business, entrepreneurs face different types and degrees of risk before any rewards can be realized. In pursuit of their dreams, entrepreneurs come to realize the delicate balance that exists between risks and rewards.

It’s a given fact that starting and running your own business is inherently risky. In fact, according to the Small Business Administration, the risk of failure is extraordinarily high for entrepreneurs starting new ventures. Nearly 10% of all firms fail each year and nearly 61% of manufacturing firms close their doors within the first five years of operation.

The small business failures are sobering statistics. So, before you “bet the farm” on that new business venture or the expansion of your existing business, calculate and understand the potential risks and rewards. First, it’s critical that you understand and assess how much risk you can tolerate in your new venture or the expansion of your existing business. Make sure you have a realistic view of your business opportunity and the upsides and downsides associated with pursuing it.

The rewards for launching a new business or expanding an existing business, however, can be great. Studies show that entrepreneurs account for a large proportion of the country’s wealth and entrepreneurs have higher savings rates than that of traditional workers.

It is important to determine how much risk you can withstand in a new venture or the expansion of an existing business. Before you even consider launching or expanding an existing business, you need to have strategies in place to offset potential losses or unforeseen challenges. As you assess your potential risk factors, be brutally honest and consider these questions:

* How many years can you go without making a profit?

* Can you tolerate possible financial loss?

* Can you survive the loss of all your invested capital?

* Have you taken steps to mitigate risk with insurance?

* Are you sharing personal risk with investors?

* Have you set aside savings to cover potential losses or dry spells?

* Do you have a contingency plan if you lose a key client or employee?

* Can you afford to risk your capital, services, and reputation?

A feasibility study is a great tool that can help you to assess risk and reward. It provides a detailed investigation and an analysis of factors that influence your project to determine whether or not the project is viable. The study examines the economic, marketing, technical, managerial, and financial aspects of your proposed business idea. The feasibility study is based on a cost benefit analysis of your actual business, and the study is used to support your decision-making process. A feasibility study is an effective way to safeguard against the waste of resources of time, people, or money that may be exhausted before an idea or project is deemed viable.

Whether you are applying for a SBA business loan, seeking funds for expansion or plant modernization, or deciding which steps come next in growing your business, a detailed feasibility study will give you the professional support that you need to make your case. A thorough feasibility analysis investigates the impact that each of following issues can have on your idea or project:

* Economic (labor, utilities, transportation, economic impact, etc.)

* Marketing (availability, plans, competition, targets and potential, etc.)

* Technical (site, equipment, modernization, constraints, etc.)

* Financial (cash flow, costs)

* Managerial (assessments, recruiting, training, and development)

The result of the feasibility study is a thorough analysis of the feasibility of your proposed business idea or project. If your idea or project is deemed feasible from the results of the study, then the next step is to proceed with a formal business plan.

How can organizations make the most out of rail freight services

How can organizations make the most out of rail freight services?

A goods train or freight train is a group of goods wagons or freight cars hauled by a locomotive on a railway. This enables the transportation of cargo between two places as a part of logistics chain. The trains might haul intermodal containers, bulk material, specialized freight or general freight in purpose-designed cars.

If we consider in terms of ton-miles hauled per unit of energy consumed, rail transport is more efficient as compared to other means of transportation. Economies of scale are often realized when bulk commodities are hauled over a long distance. However, rail freight is subject to transshipment expenses. At times, transshipment expenses exceed the operating cost of a train. Therefore, practices like containerization try to minimize these expenses. Moreover, bulk shipments are less affected by transshipment expenses.

Under suitable circumstances, transportation of freight through trains is more cost-effective than transportation of freight by road. You can make the most out of rail freight services when bulk freight is carried over longer distances. However, it is less suitable for shipments of small loads over shorter distances.

The increase in shipping, trucking and air freight services has forced rail freight companies to change their methods of operation. This would help them compete with other forms of freight services. In the present scenario, majority of companies utilize a combination of transportation methods for shipping their goods that includes the use of freight trains. This makes sure that products are shipped as well as received in a more quick and efficient manner.

The increasing concern about climate changes has made businesses realize that transportation by train is an energy efficient method for shipment of goods. Therefore, the governments of many nations are encouraging the transportation of freight through trains. Not only is rail transport energy efficient, but would also bring environmental benefits.

Despite a lot of benefits, rail freight suffers from a disadvantage. Rail transport lacks the required flexibility. This is the reason why it has lost a major part of its freight business to road transport. Moreover, the shipment by rail is not as flexible as by highways. Therefore, majority of freight is being hauled by trucks, even over long distances.

Household budget spreadsheet and its importance

Household Budget Spreadsheet and its Importance

A household budget spreadsheet is the most efficient tools to manage the different aspects of personal finances including debt. It lets you keep a check on the expenses that are incurred due to the household activities. These are versatile mediums to keep track of unexpected and unnecessary expenses. Making such a spreadsheet is an easy task.

The first step is to select a budget template that best suits you. Wide varieties of budget templates are available on the internet and can be easily downloaded without incurring any cost. You can even design your own template using excel. A self made template is ensured to have all the attributes as per your requirements. You need to make six pages with the following titles: income, utilities, calendar, debt, seasonal and budget.

The budget page is used for balancing all the income and expenses. Subsequently you need to create the following list: income, utilities, seasonal, and debt. The income page is created so as to enter all the sources of income and the respective amounts. Then you need to total the amount column and this has to be linked to the budget page. However before you have the exact numbers you should key in the lowest expected income; which needs to be totaled and linked to the amount cell on the budget page.

The utility page consists of payments that are not debts namely electricity, natural gas, transportation, groceries, etc. After you have listed all the proximate values the total needs to be calculated and a link is to be established with the budget page. The calendar and seasonal pages are used as agents to remind you of yearly, bi-yearly and other payments. A column for every month is to be made and the respective payment for each month is to be entered in the corresponding column.

In the Household Budget Spreadsheet the debt page is used to list all the debts due, interest rates and the minimum monthly payments. At the end comes the budget page which consists of all the amounts from every page.