Week 8
(question 21)
Never in history has international business been more lucrative. In the past 10 years, so may aspects have come together to make it international business possible on a everyday or 'normal' basis. I can order French wine and have it shipped to house in a few days. I can order a handmade blanket from the Chilie and have it at my door in less than a week. A person in Dubai can order a case of fresh Alaskan King Crab and have them at their resort in a few days. Basically anything anybody wants from anywhere in the world is possible. But how?
A few things are in place that allow for such a easy and lucrative international business atmosphere: The Internet, Extensive Airlines/Airports, Efficient Ground Shipping Businesses, and GPS.
And though I'm sure you can imagine how it all comes together, let me paint a picture, to make it easier.
John is in love with Jane. They have been on a few dates, but he knows he loves her. He wants to invite her over to his house for a special night, and he really wants to impress her. So John sits at his computer, and connects to the Internet. He has his list beside him, and he starts searching. He researches and finds a select bordeaux from France, and adds it to his cart, and buys with with his credit card, and has it expressed shipped to his house. It will arrive in 3 business days. He searches for Kobe Steaks from Japan, and after a few minutes, finds a place that will deliver to the US. Click, Bam, Boom, his done, and they are on their way, due to arrive in 5 days. he can almost taste the sweet marbled filets. After watching an episode of Deadlist Catch, his mouth is watering for King Crab Legs. He finds a place in Alaska that delivers overnight. He arranges 10 pounds to be delivered on X day. Next John finds a place in Eureka, California that makes hand made bees wax candles. Those are Janes favorite, he orders those. The Egyptian Cotton hand woven throw blanket will be perfect on his sofa, click, its on its way. He finds his favorite local bakery online, and places an order for some special chocolate tort to be delivered. A few items later, his list is all checked off, everything ordered and will arrive to his door on very specified days. His credit card charged. He will receive shipping notifications in his email for each item, stating when each will arrive. Tracking info is great! Some of the products are leaving the place of origin, in the belly of an international jet. Upon landing, a courrior picks them up from the respective airports, and now the ground shipping is under way. A few stops later, they are in Johns local UPS or FED EX branch wating for final delivery. They driver checks his GPS and sees a map and exact location of John's house address. When he arrives with the packages, John is waiting anxiously. They arrive within three days of each other. The crab legs last, ofcourse. The smallest package, an engagement ring from Tiffany's is what John is most excited about when signing a electronic signature tablet that is zapped directly to UPS headquarters confirming John's receipt of the package. So much high technology has made this possible. Computers, the Internet, Air Travel, Ground Shipping, Online Banking, and GPS.
Too bad Jane contracted the flu that week :-/
Friday, May 7, 2010
Can A Manufacturing Business Be Successful In USA?
Week 8
Question 18
I am the kind of person that reads lables. I may not be as well read as some folks in history, or american literature, but I am pretty sure I read lables of food and clothing more than most of you. It is tough to find a garmet of clothing nowadays that is manufatured in the USA. Most of our t-shirts, jeans, pants, socks, unders, jackets, and shoes come from places all over the work; China, Bangladesh, Mexico, Guatamala, Hungary, Phillipines, India, Pakistan.... I could continue, but you get the idea. Having the worlds leading economy is a blessing, and a curse. Because the US is the largest consumer of any country, we buy a lot of clothing. However, American owned textile companies have picked up shop, and moved over seas (or south of the border) to increase their bottom line. You can't blame them, they are in business to make a profit. There are two main reasons manufacturing is more profitable in other, "lessor developed" countries. First, and most obvious, people in Bangladesh will work for .35 cents and hour, 10 hours a day doing the same job that an American working would demand $7.50 an hour and only work an 8 hour day (Please realize these figures are just an example, and not based on real figures, but as they say 75% of statistics are made up on the spot). The actual accuracy of the figures is not the point, the point is people in some countries will work for far less wage, because they don't have as much variety and choice of dependable jobs. Another reason it is so profitable for US companies to ship manufacturing jobs to say... China, is clear. The chinese government manipulates their currency to keep the exhange rate with the US very low. So they can sell their stuff cheap.
But I digress.... and want to touch on why I think it is possible for a US small business to turn a profit and be a success in manufactoring. It can be summed up in a word: Niche. Here is how... You want to produce bags. Shopping bags, Hiking Bags, Travel Bags, Clutch Bags.... Design your bags to be stylish, and ergonomic. Create a buzz and clever marketing scheme. Target your clients. use better than high quality materials so your product will last. Base your operation in a "hippie" or "green" type community like Durango, Colorado.... Seattle, WA, or Asheville, NC. Part of your apeal will be that each bag is hand made, hand stiched. Have a small manufactoring facility where your products are produced, by cool, earthy, crunchy people that fit the mold and target crowd you hope to sell too. Build your product around this image: Organic, Hand Stitched, Unique, Quality, Products produced and assembeled in U.S.A.
Thats how you can have a successful manufacturing business in the US.
Question 18
I am the kind of person that reads lables. I may not be as well read as some folks in history, or american literature, but I am pretty sure I read lables of food and clothing more than most of you. It is tough to find a garmet of clothing nowadays that is manufatured in the USA. Most of our t-shirts, jeans, pants, socks, unders, jackets, and shoes come from places all over the work; China, Bangladesh, Mexico, Guatamala, Hungary, Phillipines, India, Pakistan.... I could continue, but you get the idea. Having the worlds leading economy is a blessing, and a curse. Because the US is the largest consumer of any country, we buy a lot of clothing. However, American owned textile companies have picked up shop, and moved over seas (or south of the border) to increase their bottom line. You can't blame them, they are in business to make a profit. There are two main reasons manufacturing is more profitable in other, "lessor developed" countries. First, and most obvious, people in Bangladesh will work for .35 cents and hour, 10 hours a day doing the same job that an American working would demand $7.50 an hour and only work an 8 hour day (Please realize these figures are just an example, and not based on real figures, but as they say 75% of statistics are made up on the spot). The actual accuracy of the figures is not the point, the point is people in some countries will work for far less wage, because they don't have as much variety and choice of dependable jobs. Another reason it is so profitable for US companies to ship manufacturing jobs to say... China, is clear. The chinese government manipulates their currency to keep the exhange rate with the US very low. So they can sell their stuff cheap.
But I digress.... and want to touch on why I think it is possible for a US small business to turn a profit and be a success in manufactoring. It can be summed up in a word: Niche. Here is how... You want to produce bags. Shopping bags, Hiking Bags, Travel Bags, Clutch Bags.... Design your bags to be stylish, and ergonomic. Create a buzz and clever marketing scheme. Target your clients. use better than high quality materials so your product will last. Base your operation in a "hippie" or "green" type community like Durango, Colorado.... Seattle, WA, or Asheville, NC. Part of your apeal will be that each bag is hand made, hand stiched. Have a small manufactoring facility where your products are produced, by cool, earthy, crunchy people that fit the mold and target crowd you hope to sell too. Build your product around this image: Organic, Hand Stitched, Unique, Quality, Products produced and assembeled in U.S.A.
Thats how you can have a successful manufacturing business in the US.
Thursday, May 6, 2010
The 4 Cs of Credit
Week 7
(question 17)
Most businesses need credit at some point, either as start up funds, or expansion funds. A business's creditworthiness is largely dependent on what has come to be known as the 4 C's of credit.
The Four Cs of Credit are:
-Character: size, location, years in business, structure of business, number of employees, principals, media coverage, past or pending lawsuits, stock performance.
-Capacity: this deals with cash flow, and the ability of a company to pay its bills. Also includes debt of a company, whether that debt is secured or unsecured. Also, if the business has any unused lines of credit.
-Capital: assesses whether or not a company has the resources to pay its creditors. Capital is scrutinized most closely during credit analysis (along with cash flow).
-Conditions: things external to a business can effect the business. market flucuation, industry growth, currency rates, and even politics. (i'd like to think the media is an external factor that can help set the conditions of how well your product or service sells).
Probalby the most important of the four is Capitial... as it includes cash flow, sometimes lumped with capacity. If you don't have the capital, chances are your business is not credit worthy.
(question 17)
Most businesses need credit at some point, either as start up funds, or expansion funds. A business's creditworthiness is largely dependent on what has come to be known as the 4 C's of credit.
The Four Cs of Credit are:
-Character: size, location, years in business, structure of business, number of employees, principals, media coverage, past or pending lawsuits, stock performance.
-Capacity: this deals with cash flow, and the ability of a company to pay its bills. Also includes debt of a company, whether that debt is secured or unsecured. Also, if the business has any unused lines of credit.
-Capital: assesses whether or not a company has the resources to pay its creditors. Capital is scrutinized most closely during credit analysis (along with cash flow).
-Conditions: things external to a business can effect the business. market flucuation, industry growth, currency rates, and even politics. (i'd like to think the media is an external factor that can help set the conditions of how well your product or service sells).
Probalby the most important of the four is Capitial... as it includes cash flow, sometimes lumped with capacity. If you don't have the capital, chances are your business is not credit worthy.
What the Fraud??
Week 7
(question 12)
Anybody that pays the slightest amount of attention to the news knows that fraud can really impact a business. Many large companies on Wall Street have gone belly up due to fraud in the past decade. But fraud is far more common than one may think in the business world. And fraud can do paticular damage to a small business, in most cases far more than to a larger company. The reason is simple. Fraud is an ugly word, its an ugly action, and when fraud happens in a small business, if the business is lucky enough to survive, its image will be tarnished. Many small business are family owned and operated, and there is sense of trust there. But with trust comes betrayel, and most fraudelant activity comes from within the business itself. Ordering an extra case of wine for the restaurant, only to take it home upon delivery doesn't seem like much, but its stealing. Writing false billing statements to earn a little extra money on the side may seem harmless enough to your cousin who manages your automotive garage, but if a customer finds out, and goes public, your reputation is ruined. Really, one lost law suit could bankrupt a small business if they didn't have adequate insurance. There are plenty of examples of how fraud can hurt a business, and even cause the failure of a business. And most business minded people probably realize that fraud is usually more damaging to a small business than to a larger company.
So how to prevent fraud? Be sure and have a rigid hiring system in place. Do adequate interviews. Background checks are not a bad idea. If able, obtain a copy of the potential employees credit score. This will let you know if that person stays on top of their budget, a good sign. And don't settle for first person that comes along, be patient and find a good solid person. Be sure and do inventory often, and have staff meetings often. Having closed circuit tv monitors will deter would be frauders. Do internal audits once a year, and perhaps hire an outside firm to perform an audit once a year. If you deal with checks, requiring two signatures for endorsement is a way of limiting fraud. Having a good accountant helps to detect signs of fraud, and could perhaps nip it in the bud.
Don't be naive, fraud happens!
(question 12)
Anybody that pays the slightest amount of attention to the news knows that fraud can really impact a business. Many large companies on Wall Street have gone belly up due to fraud in the past decade. But fraud is far more common than one may think in the business world. And fraud can do paticular damage to a small business, in most cases far more than to a larger company. The reason is simple. Fraud is an ugly word, its an ugly action, and when fraud happens in a small business, if the business is lucky enough to survive, its image will be tarnished. Many small business are family owned and operated, and there is sense of trust there. But with trust comes betrayel, and most fraudelant activity comes from within the business itself. Ordering an extra case of wine for the restaurant, only to take it home upon delivery doesn't seem like much, but its stealing. Writing false billing statements to earn a little extra money on the side may seem harmless enough to your cousin who manages your automotive garage, but if a customer finds out, and goes public, your reputation is ruined. Really, one lost law suit could bankrupt a small business if they didn't have adequate insurance. There are plenty of examples of how fraud can hurt a business, and even cause the failure of a business. And most business minded people probably realize that fraud is usually more damaging to a small business than to a larger company.
So how to prevent fraud? Be sure and have a rigid hiring system in place. Do adequate interviews. Background checks are not a bad idea. If able, obtain a copy of the potential employees credit score. This will let you know if that person stays on top of their budget, a good sign. And don't settle for first person that comes along, be patient and find a good solid person. Be sure and do inventory often, and have staff meetings often. Having closed circuit tv monitors will deter would be frauders. Do internal audits once a year, and perhaps hire an outside firm to perform an audit once a year. If you deal with checks, requiring two signatures for endorsement is a way of limiting fraud. Having a good accountant helps to detect signs of fraud, and could perhaps nip it in the bud.
Don't be naive, fraud happens!
Wednesday, May 5, 2010
Is having a business exclusively online all its 'clicked' up to be?
eCommerce:
(Week 6, question 10)
In the past few years, there has been an explosion of online retaliers. It really makes things conveinent for us, the consumer. I have sat at the desk at work and shopped for birthday gifts, Christmas gifts, vacation deals, and personal items at random. It saves time from running to the local stores, or making an hour long drive to the mall, or the pressure of a travel agency. However, many of the sites I deal with have physical locations. Dick's sporting goods for example. And that helps. I am able to shop in Dick's virtual store and see what I am interested in, then when I go to their actual store, I know exactly what I want. Or like wise, I can go to the mall and try on shoes, but then usually find a better deal from Zappos. Reading reviews on different models of cameras and tvs in the virtual stores is helpful before going to Best Buy or Walmart to make a final purchase after seeing and feeling the product in person. BUT, the examples I have given are all businesses with physical locations, AND an online presence. So, what are the pros and cons about having a business exclusively online, with no phsyical location?
And I am thinking in terms of a business which sells a tangible product, Zappos for example...
Here are some of the pros and cons to having a business exclusively online:
Pros:
-Low Start Up Costs
-Omnipresence on the Web
-International Customer Access
-Business House 24/7/365
-Low Overhead
-Work From Home
Cons:
-You can't see customers phsyically
-Contstant need to maintian site
-Lack of customer trust (due to location, and inability to 'touch' product)
-Disruption of business
Of course these are not the only pros and cons for an exclusive online business. Issues such as shipping logistics come to play, as well as currency conversion when dealing with international customers. But you get the general idea.
Is owning a business that operates exclusively online the way of the furture? I guess wake me in 100 years and I will update my Blog.
(Week 6, question 10)
In the past few years, there has been an explosion of online retaliers. It really makes things conveinent for us, the consumer. I have sat at the desk at work and shopped for birthday gifts, Christmas gifts, vacation deals, and personal items at random. It saves time from running to the local stores, or making an hour long drive to the mall, or the pressure of a travel agency. However, many of the sites I deal with have physical locations. Dick's sporting goods for example. And that helps. I am able to shop in Dick's virtual store and see what I am interested in, then when I go to their actual store, I know exactly what I want. Or like wise, I can go to the mall and try on shoes, but then usually find a better deal from Zappos. Reading reviews on different models of cameras and tvs in the virtual stores is helpful before going to Best Buy or Walmart to make a final purchase after seeing and feeling the product in person. BUT, the examples I have given are all businesses with physical locations, AND an online presence. So, what are the pros and cons about having a business exclusively online, with no phsyical location?
And I am thinking in terms of a business which sells a tangible product, Zappos for example...
Here are some of the pros and cons to having a business exclusively online:
Pros:
-Low Start Up Costs
-Omnipresence on the Web
-International Customer Access
-Business House 24/7/365
-Low Overhead
-Work From Home
Cons:
-You can't see customers phsyically
-Contstant need to maintian site
-Lack of customer trust (due to location, and inability to 'touch' product)
-Disruption of business
Of course these are not the only pros and cons for an exclusive online business. Issues such as shipping logistics come to play, as well as currency conversion when dealing with international customers. But you get the general idea.
Is owning a business that operates exclusively online the way of the furture? I guess wake me in 100 years and I will update my Blog.
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