How To Dig Yourself Out Of A Bad Financial Situation

Have you recently found your company in a bad situation financially? The good news is that you’re not the only one. The bad news is that you need to fix the situation as quickly as possible before it ruins your company’s credit and reputation. Thankfully, there are plenty of things that you can do to right the ship.

Within this guide, you will discover ways to correct your company’s business finances and get out of debt.

Cut Expenses Immediately

If you’ve gotten your company into a bad situation, you need to take action immediately. It is absolutely pertinent to balance out your expenses and your revenue. One way to fix the problem is by cutting your expenses. There are plenty of ways to cut the costs of your business. For instance, you may want to order less supply for the money. If necessary, you may also be required to lay off some of your workers. This is never a fun idea, but it is something that you may need to do to save your business from bankruptcy.

Selling Assets

There is also a possibility that your company owns valuable assets. Perhaps you own a building that you no longer need? Or maybe your company owns a few valuable patents? The possibilities are really endless. If you’ve gotten your company into a tight spot, you should consider selling some of its assets. The money that you earn will prove to be immensely beneficial right away. Just make sure that you do not sell core assets. Keep everything that is considered crucial to your business and its daily operations.

Outsourcing Work

Hiring employees can be incredibly expensive. There is no doubt that having your own employees is beneficial, but it might not be feasible at the given time. With this in mind, you should consider reducing your expenses by outsourcing some of your work. Outsourcing is often frowned upon, but you need to do whatever you must to ensure that your company survives and thrives. Therefore, you should not hesitate to outsource work when you feel it is absolutely necessary to do so. After you’ve managed to correct your financial situation, you can always hire new workers.

Getting A Loan

It is essential to get the money that you need when you need it. If you do not, there is a possibility that you’re going to be forced into an untimely bankruptcy. Thankfully, there are plenty of ways to obtain money. There are personal loans for bad credit and peer to peer lending. You should always consider each and every one of your options. Carefully inspect the loans and their interest rates. A loan could help keep your business afloat for a little bit longer.

Hire An Accountant

If your company doesn’t have an accountant, you need one as soon as possible. Their presence can really make a world of difference. They’ll be able to help you set up a budget and stick with. In return, this could keep your company out of debt in the first place! Just make sure you find someone trustworthy and reliable.

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3 Key Ways Your Small Business Can Save

Keeping down costs as much as possible without sacrificing quality is critical to any small business if it’s going to stay competitive, maintain a high customer satisfaction rate, and ultimately grow into a medium or even large-sized business somewhere down the road.

Many small businesses these days can be run by only one or a few people, at least in their “infant stage,” and sometimes can even be run entirely from a home office with no physical business property.

But no matter how minimalistic your business may be, there are three areas you probably can’t do without: a quality business phone system, a good website hosting service, and fast, affordable shipping. Learn to shave down expenses in each of these three key areas, and it adds up fast and bolsters your bottom line. Here’s how.

1. A “Virtual” Business Phone System

Poor customer service is the number one reason for customer loss, and the high turnover rates typical with most businesses present a great opportunity: create high customer retention rates and almost all of your new “converts” are “real” growth.

Having a professional aura to your phone system is a big part of maintaining high customer service standards. But business phone systems, both hardware and software, can be very expensive for small businesses. How shall we solve this dilemma?

Virtual business phone system

UniTel Voice allows you to transform your cell phone(s) into a virtual business phone system that sounds and feels truly professional to your contacts. You get toll free, local, and vanity numbers; professional greetings with department and/or employee extensions; voicemail and faxing; multiple numbers per phone or multiple phones per number; and more. It all adds up to complete mobility, incredible versatility, and unexpected affordability.

2. Affordable Website Hosting

Everyone has to have an online presence these days to make it in the business world, at least, in most industries. But how can you find affordable Web hosting that still meets all of your needs?

The link above will introduce you to some answers to the question of how to have a great website and hosting service at a price penny-pinched small businesses can afford. Unless your Web pages are delivered with reasonable speed, you’ll lose customers.

And you may also need email marketing, a blog, ecommerce capability, file sharing, online chat or other customer support, and more to keep your site visitors happy enough to return. Plus, you need 24/7 support to ensure you can keep your site up and running and correct any problems quickly. All of this can be done with customized Web hosting that’s trim enough to be inexpensive but big enough where it counts to get the job done.

3. Mail Delivery

Almost all small businesses will send at least some products through the mail to customers, and finding the most cost-effective mail delivery options in each instance adds up savings fast.

While there are other options out there, the three main senders are USPS, FedEX, and UPS. US Postal delivery is usually the cheapest for smaller packages, but check out the rates in the link above to see how heavier packages are often better priced and faster delivered with UPS or FedEx. And anything over 70 pounds will have to be delivered by some entity other than the US postal system.

Finally, there are also postal delivery and warehousing outsourcing partners out there that can greatly simplify your customer delivery at very competitive price points.

Trim down overhead on postal delivery, Web hosting services, and business phone systems while still maintaining high standards customers approve of, and you’ll save big on your bottom line.

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Former spy Sergei Skripal was poisoned by Russian nerve agent smeared on his car door, report says

UK officials reportedly believe Sergei Skripal was poisoned via his car door.

They told The Daily Mail that the deadly Novichok nerve agent was smeared Skripal’s car door.

It could explain why both Skripal and his daughter Yulia were poisoned.

British officials believe former spy Sergei Skripal was poisoned when he touched the handle of his car door, according to a newspaper report.

Novichok, a Russian-made nerve agent used in the attempted assassination, could have been applied to his vehicle, leading to the hospitalisation on Skripal and his daughter on March 4.

Unnamed British government sources told The Daily Mail that Novichok, the Russian-made nerve agent that was administered to him, was smeared on his car door.

The theory could explain why both Skripal and his daughter Yulia were affected.

Philip Ingram, a former British military intelligence officer, told the Mail: “Using the car would explain why both Mr Skripal and his daughter got a dose.”

It remains unclear when the perpetrator, or perpetrators, spread Novichok on Skripal’s car. Chemical weapons experts say that Novichok can remain dangerous for a long time after being applied to a surface.

According to the Metropolitan Police, Skripal and his daughter used the car, a red BMW, to visit Salisbury city centre on the day they were poisoned.

They parked in a Sainsbury’s supermarket car park, then visited a pub and a restaurant. Shortly after leaving the restaurant, they were found clearly suffering from the effects of Novichok.

Investigators this week started examining the section of the car park the Skripals used before entering The Maltings shopping centre, where they collapsed.

Neil Basu, a senior officer in London’s Metropolitan Police, on Tuesday also appealed for witnesses who saw the Skripals or their car, a red BMW, in the 45 minutes before the Skripals arrived at the car park.

British Prime Minister Theresa May is preparing to set out her plans to retaliate against Russia for failing to explain itself over the poisoning. The Kremlin has repeatedly denied and openly ridiculed speculation of its involvement.

Sergei and Yulia Skripal remain in critical condition.

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Stephen Hawking was rumored to run over the toes of people he didn’t like with his wheelchair

Stephen Hawking was a legendary physicist, science communicator, and public intellectual – but he was also human.

And rumour has it, he had a mischievous way of getting back at people he didn’t like: he’d deliberately run over their toes with his wheelchair.

Hawking died peacefully at his home in the early hours of Wednesday morning, his family has said in a statement. His death has prompted an immediate outpouring of grief and tributes to his talents.

And while he was well-known for his amyotrophic lateral sclerosis (ALS) diagnosis that left him wheelchair bound for decades, the Cambridge professor may have used his condition to his advantage where he could.

In the 2012 biography “Stephen Hawking: An Unfettered Mind,” author Kitty Ferguson wrote that it was rumoured that Hawking would try to run over the toes of people who annoyed him.

In 1977, Prince Charles got his feet crushed beneath his wheels during the royal’s induction into the Royal Society, she wrote: “The prince was intrigued by Hawking’s wheelchair, and Hawking, twirling it around to demonstrate its capabilities, carelessly ran over Prince Charles’s toes … People who annoyed him, it was said, found themselves a target.”

It was even rumoured that one of the politically outspoken scientist’s great regrets was that he never got a chance to run over the toes of Conservative prime minister Margaret Thatcher.

Hawking, it has to be said, denied these allegations – albeit fairly unconvincingly.

“A malicious rumour,” he told Ferguson. “I’ll run over anyone who repeats it.”

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The Epic Signing Of The Magna Carta

Magna Carta signed 796 years ago on June 15, 1215 at Runnymede, From this historic document: (38) In future no official shall place a man on trial upon his own unsupported statement, without producing credible witnesses to the truth of it.

+ (39) No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgement of his equals or by the law of the land.

+ (40) To no one will we sell, to no one deny or delay right or justice.

The Magna Carta is often thought of as the corner-stone of liberty and the chief defence against arbitrary and unjust rule in England. In fact it contains few sweeping statements of principle, but is a series of concessions wrung from the unwilling King John by his rebellious barons in 1215.  However, the landmark "Magna Carta" established for the first time a very significant constitutional principle: that the power of the king could be limited by a written grant.

King John's unsuccessful attempts to defend his dominions in Normandy and much of western France led to oppressive demands on his subjects. Taxes were extortionate; reprisals against defaulters were ruthless, and John's administration of justice was considered capricious. In January 1215 a group of barons demanded a charter of liberties as a safeguard against the King's arbitrary behaviour. The barons took up arms against John and captured London in May 1215.

By 10 June both parties met and held negotiations at Runnymede, a meadow by the River Thames. The concessions made by King John were outlined in a document known as the 'Articles of the Barons', to which the King's great seal was attached, and on 19 June the barons renewed their oaths of allegiance to the King. Meanwhile the royal chancery produced a formal royal grant, based on the agreements reached at Runnymede, which became known as Magna Carta (Latin for 'the Great Charter').

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Pros and cons of academic journals

Do scholarly journals warrant high subscription fees? Yesterday's post about the movement to make academic journals more affordable -- or at least to promote the revolutionary idea that their authors and reviewers should be paid -- generated such interest on both this blog and facebook, that I had a look at what the internet is saying.  

And I found that it is a LOT. Google (perhaps because of a vested interest?) seems to actively encourage discussion, but it is definitely a very hot topic, originally triggered by the boycott of Elsevier, the Dutch publisher of many of these journals. See, for instance, gigaom -- but there is much, much more.

Traditionally, students are strongly recommended to use journals in their research; indeed, they are considered so important that the University Library of the University of New England has a page with tips for telling academic ("peer-reviewed") journals from other types of publication. To summarize:

In academic journals there is a list of editorial board members at the beginning 

The articles include sourcing, such as footnotes, endnotes, and bibliographies

The papers are often illustrated with charts and graphs 

The authors are NEVER anonymous 

The language is very formal: "sensational, highly emotive language is almost never used"

Most specialize in original research

So, okay, these students are captive to the scholarly journal arena, and university libraries include hefty subscription fees in their budgets as a matter of course.  But is this system coming to an end? Have internet search engines such as google guaranteed the demise of these publications in their present form?

A forum which discusses the issue in an intelligent manner is based at Slashdot. What makes it interesting is the input from people who have been involved in the author or reviewer process -- people like Dale, who posted very interesting comments on this blog.  And, there are very definite pros and cons:

PRO:

Reliable scholarship

Junk is more likely to be rejected

Internet data is easy to obtain, but the recipient has to do all his or her assessment, while with scholarly journals the assessment has already been done

The current journal system employs people with high level filtering expertise, and no search engine can match that

It allows significant advances to be seen more easily

"Saner content than a crackpot with a webpage"

CON:

Anonymity of reviewers cannot be guaranteed when there are only a few experts in the field

Vulnerability to academic rivalry

Immense time-lag between submission and publication: one author commented that by the time his technology-related paper was printed it was obsolete and not worth reading

Despite the peer review system idiotic and plagiarized material has been published

It panders to intellectual elitism

Reviewers can be emotionally biased

Most papers are work in progress, and not a complete understanding

Because of high charges "these publishing bodies are actually slowing down the advancement of mankind!" 

 Obviously, the discussion is only going to get more lively. Watch this space.

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Developers pay developer charges

I have a new paper out — Developers pay developer charges in Cities: The International Journal of Urban Policy and Planning.

In this paper, I estimate the economic incidence of developer charges (taxes paid upon approval to use land for a higher value purpose) using a natural experiment in Queensland, Australia, where a surprise political announcement varied the charges. Using data on developer charges and dwelling prices during this ‘natural experiment’ period, I estimate their economic incidence. The data clearly shows that the administrative incidence on the landowner (developer) happens to also be the economic incidence. An increase in the charge comes at no cost to the buyer of a new dwelling but instead decreases the land value by an equal amount.

The motivation for doing this analysis was an article in The Conversation that suggested the opposite — that the economic incidence was on the buyers of new dwellings, against all logic and reason. In fact, this research showed a significant correlation between developer charges and home prices at a ratio of 1:4. Erroneously interpreting this relationship as causal means would mean that increasing charges by $1 would increase home prices by $4.

Can you see the nonsense here? If there really is a causal link, property developers would be lobbying to massively increase charges in order to earn a 400% markup on them! In reality, the development industry has been lobbying hard to remove them.

In my paper, I demonstrate the problem with this causal interpretation, which arises because the variation in the developer charges is due to the way they are set by regulations. The regulations state that the charge per new dwelling of 2 bedrooms or less can be a maximum of $20,000. The charge for a 3 bedroom or larger dwelling can be a maximum of $28,000. Because councils had no incentive to charge less than this maximum, this was the size of the charges in the data. The regression analysis merely showed that the average 3 bedroom or larger dwelling is 4 x $8,000, or $32,000, more than the average 2 bedroom or smaller dwelling (controlling for other quality and location factors).

Because my study covered a period where surprise political decisions varied the charges themselves for each dwelling type, my analysis show no relationship. In fact, if you take out this surprise variation in my data and leave the charge at the fixed price for each size dwelling, I replicate the earlier results of a 1:4 correlation.

Why is this important? 

This result is significant because the economics of property is almost the exact opposite of the economics taught in most modern university degrees, and bad economics is being used to justify bad policy. All too often I see the following implicit assumption about causality:

Cost of capital ⇒ Rental price of capital.

If you increase the cost of investing in capital, you increase the rental price of capital. That is the logic behind the idea that developer charges, or any land tax, can be passed on to users.

But this clearly makes no sense in the case of land. Land is costless to produce. It is obviously not costless to buy it from someone else, but ultimately, there is no prior investment that provides its value. It is merely a legal right to claim certain incomes associated with that location. So for land (and ownership rights in general), the direction of causality must be:

Rental price of capital ⇒ Cost of capital.

This is not a secret. It has been widely known for hundreds of years in the property valuation profession, which uses variations of the ‘residual value’ method to determine the cost (price) of land from its net rental price.

So what? 

Vested interests in the property industry continue to argue that shifting the tax base to land will increase the cost of housing — after all, they argue, the rental price is caused by the cost of land plus other costs, including taxes and charges.

We know this argument is bogus because it simply begs the question that if prices come from input costs, why does land have any value at all? All land rents should be zero.

And again, if the rental price of capital was the result of a summation of costs, the property industry would have nothing to fear from increasing developer charges, as they could pass on those costs in the price of new dwellings.

One step further

We can take this logic another step and see that because the economic incidence of land taxes (or development charges) is on the landowner, increasing these taxes can encourage more development sooner since it reduces the payoff from delaying investment in new housing.

Consider the table below. It comes from my paper. I use it to demonstrate the changed incentives to delay or bring forward new housing development from increasing land taxes (which effectively decreases the net rental price of land).

The table shows three scenarios where the discount rate is 5%. In each scenario, the price in time one (t=1) reflects the expected rate of growth. The present value (PV) is the price at t=1 discounted at the 5% rate. Where that present value is higher than the current price, there is an incentive to delay sales, which feeds back into delayed construction [1].

If the rate of price growth is higher than the discount rate (the rate of return on the sale price available from investing it elsewhere) it makes sense to delay the sale to get the higher price (Scenario A). If the rate of price growth is low, there is an incentive to bring forward sales to get your money out of this property to put it somewhere else an get a higher return (Scenario C).

The property industry likes to promote the myth that they would never delay selling. Yet, when I worked for a major property developer during a price boom period, we did exactly that. The decision was made to close the sales office one Saturday because there were too many sales. These rapid sales meant that the price was too low and that delaying the sales would fetch a higher price (and a higher PV of that future price). So instead of selling the whole building in one day and starting construction, the prices were raised, and it took years afterwards to sell the whole building and massively delayed construction.

The absolutely crucial lesson in from the Scenarios in this table that the imposition of a developer charge can turn Scenario A into Scenario C by reducing the net revenue from each future dwelling sale to a developer due to the charge. For example, if a charge of $10,000 is announced to be imposed in the next financial year in Scenario A, it becomes Scenario C in net terms, and the developer will prefer to bring forward planning applications to get a lower charge and incur sales in the current period.

Increase taxes on land to get more construction, not less!

To be clear, this is not some crazy idea I just invented. This is the standard result of real options theory, and it applies equally to increasing costs to landowners and decreasing their future development options. Here’s a 1985 paper from the AER making the point.

… the initiation of height restrictions, perhaps for the purpose of limiting growth in an area, may lead to an increase in building activity in the area because of the consequent decrease in uncertainty… 

Imposing height restrictions can turn Scenario A, where future revenues (price x number of dwellings) are higher because of the option for increased density, to Scenario C, where future revenues are lower because the number of dwellings able to be built on the site is fixed.  This brings forward sales and construction.

In sum

My new paper is a small contribution that demonstrates the well-established economics of property markets, but which flies in the face of conventional theory. Understanding land and property markets helps to understand how backwards the standard economic understanding of ‘capital’ really is.

fn [1]. Another thing many economists get wrong about the property market is they ignore the fact that most sales come before construction, not after. This means that when people just say “increase supply” they don’t realise that market incentives mean this will never happen — supply only responds to demand. Only a housing developer without a profit motive would increase supply at a rate that would depress local prices, and yet we hear nothing from the ‘supply-siders’ about the creation of a public housing company that could do just that.

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