Archives for September 2014

Strategic Planning for Business

In businesses, strategic planning is an important step in implementing and maintaining a successful business. The question is ‘What is strategic planning’? Strategic planning is an organizational activity that sets priorities, focuses energies, strengthens operations, and ensures employees and other stakeholders are working towards a common goal. When a company develops a strategic plan, they can use it to lead them into the future while establishing fundamental practices and principals the drive the company forward.

The strategic plan is a document used to communicate the goals of the organization and the actions needed to achieve the goals. It also includes all the other critical elements of development of the plan. When developing a strategic plan companies should look at where they would like to see their company go and how they want to get there. It is impossible to get everyone on board without having a map to see where they are going. The strategic plan provided that map.

The steps to formulating a good strategic plan is:

  1. Analysis: Have an understanding of the current internal and external environments for the company.
  2. Strategy Formulation: Formulate the high-level strategies and basic organization level strategies.
  3. Strategy Execution: Implementation of the high-level strategies that are translated into operational plans and action items.
  4. Evaluation and Sustainment: Ongoing refinement and evaluation of the strategies implemented through performance, culture, communications, data reporting, and other management reports.

When developing a strategic plan companies need to have input from all level of the organization. It important to have everyone on board with the changes and understand the implementation of the strategies. This is an ongoing process that is always needing refined and updated.

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Paying Down Credit Card Debt

Credit Cards are a necessity in today’s society, but that does not mean that they have to rule your life. If you are facing mountains of debt, the thought of getting rid of it can be overwhelming. Unfortunately, there is not a quick fix to reducing the amount of debt. There are, however, tried-and-true methods to paying off debt that if you stay focused and committed will help you achieve your financial goals.

The Snowball Method

This method is more about behavior modification then math. The idea behind it is to pay down debt from the smallest to the largest regardless of interest rates. Once you pay off the smaller debt you take the payment from that and add it to the next smaller debt’s payment until it is paid off. The pros of this method is you are motivated every time you pay down to a zero balance. The cons of this method it is not the most financially sensible, but it does get the job done if you can stay focused.

Pay the Most Expensive Balance First

This is great for someone motivated by numbers. You find the account that has the highest interest rate. This is usually the one doing the most damage to your finances. So focus on this account by reducing the payments of the other accounts, and adding the extra to the highest interest rate account. The pros is you will save more money over time. The cons are you have to be very focused and stick to the rigid plan.

Do a Balance Transfer

When deciding to transfer money from one card to another there are several things to consider so have a calculator handy. The first is how much is the fee to transfer the money? The interest rates have to be lower than you are currently paying and the transfer fee needs to be low. The pros for this method is you will save money over time on interest and you can pay off the principal faster. The con is opening a new credit card can hurt your credit score and if not discipline you can run up more money on the newly cleared card. Stay focused and pay down the balance transfer.

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Starting a Non-Profit

Have you ever thought about starting a non-profit company? Do you have everything you need to start a non-profit? Do you even know anyone who can help? To answer a few question, you probably do not have everything you need to start a non-profit, but never fear we are here to help.

The main reason to form a non-profit is to accomplish a mission, but to be able to accomplish that mission you soon realize that you are running a business. To form a non-profit there most of it is legal requirements, such as forming a corporation, obtaining a tax exemption, etc. there is also other things to consider such as setting up a financial system, payroll, opening a bank account, hiring staff, etc.

The following is a checklist for anyone considering starting a non-profit:

  • Reserve a name with the Secretary of State, Division of Corporations
  • Select individuals to serve on its board of directors
  • Develop a mission statement
  • Develop a non-profit operating plan; this describes the organization’s location, staffing, activities, funding, fundraising plan, and budget.
  • Establish board committees (executive committee; finance committee; fundraising committee; etc.)
  • Create by-laws
  • Hire a bookkeeper to create financial reports
  • Hire an accountant for annual audit and mandatory government filings
  • Incorporate or form a trust to protect the founders and principals from personal liability
  • Hold the first corporate directors meeting to elect the directors and adopt the by-laws
  • Apply for an employer identification number
  • Establish a bank account and signing procedures
  • Designate officers allowed to sign the checks
  • Apply for tax exempt status and receive IRS Determination Letter or advanced ruling letter
  • File for state and local tax exemptions
  • Register with the Charities Bureau of the Attorney General’s Office
  • Obtain an Employer Registration Number from your state for reporting unemployment insurance, withholding and wage data
  • Establish financial management, auditing and internal controls systems
  • Set up a chart of accounts to record financial transactions
  • Establish a general ledger and bookkeeping system
  • Compose job descriptions for staff
  • Hire staff and set payment levels
  • Prepare a personnel manual
  • Establish a payroll system
  • Determine whether individuals are employees or independent contractors
  • Establish a system for preparing and filing Form W-2 and 1099s on behalf of employees and independent contractors
  • Establish a mandatory system for managing employee records including names, social security numbers, employment forms, payroll periods, earnings, etc.
  • Establish a system to meet the mandatory insurance requirements
  • Get the necessary insurance coverage
  • Determine if the directors and officers need liability insurance
  • Establish a system for providing receipts for donations to comply with IRS requirements
  • Create a ‘quid pro quo” statement informing the donors about how much of the donation is tax deductible in they receive something in return for their donation.
  • Get health insurance coverage for employees
  • Establish retirement plans for employees
  • Rent or purchase office space
  • Lease a postage meter and apply for a non-profit permit number in order to mail at a reduced non-profit bulk rate
  • Lease or buy computer equipment
  • Lease or buy office equipment such as fax machine, copy machine, desks, chairs, file cabinets, conference tables, etc.

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Developing a Personal Cash Flow Strategy

We all know that money make the world go round. It is important to have enough money to meet your day-to-day needs and to support you current cash needs. Developing strategies to help generate the flow of cash is important in determining how much cash flow you will have. Developing a personal cash flow helps people maintain their lifestyles and focus on their needs.

There are benefits to having a personal cash flow strategy. It help maintain your lifestyle, you can increase charitable giving, or pass money to heirs. With the appropriate strategies, you can keep a cash flow regardless of the current market cycle, and meet your ongoing cash needs. There are seven steps to help increase and maintain your cash flow:

1.       Define Your Cash Goal: Focus on what you need from day-to-day, week-to-week, and month-to-month. Set financial goals that you are comfortable with and that fit your basic needs and lifestyle. You should set a target amount and establish a date when you want to reach the goals you set. You can set short term that last only months or long-term goals that could last decades.

2.       Define Your Source of Cash: List all the source you expect to receive money from, other than your financial assets, with the amounts and dates for each source. This could be a paycheck, social security, etc.

3.       Define You “Number”: This is your target number that will allow you to be comfortable and pay your bills on time. This number should also include a cushion that could sustain you for six months to two year depending on how much of a cushion you feel you need to sustain your lifestyle over the time.

4.       Define Your “Window”: The “window” is the amount of time you must be “locked-in” to your cash flow for you to feel comfortable that you will be able to maintain your lifestyle. You don’t want a down turn in the market to make an abrupt change in your lifestyle.

5.       Develop an Investment Strategy: Talk with an advisor to help you figure out what would be the best course of action for investments. Establish your risk tolerance, and what would be an acceptable minimum return for each investment. 

6.       Implement and Monitor You Wealth Plan: This is the step where you monitor and adjust you investments to get the cash flow you planned. You can allocate funds into different investments and review the performance making sure that your goals are in track and completed in the time allotted.

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