Success Digest

Creating a workplace at home

The nature of your workplace has an impact on your productivity and business, according to experts. SIMON EJEMBI provides tips that can help you set up a suitable workplace at home  It is not unusual for entrepreneurs to run their businesses from home these days. Also, it is increasingly common for people to work from… [Read More...]

Five qualities of a good manager

Five qualities of a good manager

It is vital for a manager to possess certain qualities that enable them to give employees a sense of direction and purpose at work. A good manager contributes to an organisation’s success by using these qualities to maximise the potential of the employees they manage. Here are five must-have qualities of a good manager. Leadership… [Read More...]

Success Digest NG

Financial windfalls: Fleeting good fortune or lasting wealth?

What would you do if you suddenly came into a large sum of money? Would you make a down payment on a property, buy yourself a new car, start a business, put it away for your retirement, or just go on a wonderful spending spree? A financial windfall presents you with unique opportunities as well… [Read More...]

This has better been good

FG plans local manufacturing of motor spare parts

The Federal Government has disclosed plans to begin local manufacturing of auto spare parts. Minister of Mines and Steel Development, Mr. Muhammed Sada, said this at Ota, Ogun State, during the inauguration of a new factory, Sun and Sand Industries Africa Limited. Sada said his ministry would incorporate products from Sun and Sand Limited, ferrous… [Read More...]

EFCC to probe N16.4bn ALSCON asset loss

EFCC to probe N16.4bn ALSCON asset loss

The controversy surrounding the management of the Aluminium Smelter Company of Nigeria has assumed a different dimension as BFI Group is set to invite the Economic and Financial Crimes Commission to investigate the N16.4bn loss in the company’s asset. Chairman of BFIG, Dr Rueben Jaja, confirmed the development to our correspondent in Abuja on Friday… [Read More...]

More bad news for student loan borrowers

Young, educated workers were once seen by banks as the most promising borrowers. That's no longer the case, thanks to student loan debt.
FORTUNE – Graduation season is upon us. It used to be that in the years after hopeful 20-somethings bid farewell to campus life, they'd start borrowing to buy many things typically associated with adulthood – namely, a car and a home. Many had college loans to repay, but that's partly what made brainy go-getters so attractive to banks and lenders. They typically earn more over a lifetime, so they seemed like a safe bet.
They may still be, but times have changed. College debt may have once been the good kind of debt, but the scale has grown so big that in many cases it has become more burdensome than helpful.
For the first time in at least a decade, 30-year-olds – the median age of first-time home buyers – with no history of student loans are more likely to have a mortgage than those with debts from school, according to a new report by the Federal Reserve Bank of New York. Studies have shown young people aren't borrowing as much as they used to, and the Fed says the burden of student debt may be the culprit.
The topic is especially important as the U.S. struggles to recover from the financial crisis and subsequent recession. Consumption makes up the bulk of the economy, and the spending power of young people has certainly helped drive that part of the growth equation.
MORE: Why gold is falling even as global economic fears intensify
Between 2003 to 2009, home ownership rates were significantly higher for 30-year-olds with a history of school loans versus those without such debts. The difference widened during the boom years, peaking to 4 percentage points by 2008. That all changed during the recession, however. Home ownership declined across the board, but fell faster for those burdened by student loans. By 2012, one of the cheapest times to buy, the home ownership rate for student debtors was almost 2 percentage points lower than those without a history of student debt.
Indeed, the housing market still hasn't fully recovered from record foreclosures that caused prices to crash in 2007. But the burden of college loans has also hit the auto industry. Oddly enough, it comes at a time when auto companies from General Motors (GM) to Toyota (TM) report some of the strongest U.S. sales in years. As with home ownership, those with student debt are less likely to have a car loan than those non-borrowers.
All this reflects how college grads feel about their job prospects. During economic downturns, young workers usually feel the brunt of it, but the aftermath of the latest recession has been the longest period of economic weakness the U.S. has seen in more than seven decades. For young graduates under 25 years old today, the unemployment rate is 8.8%, compared with 5.7% when economic times were much better in 2007, according to a report released last week by the Economic Policy Institute. The underemployment rate, which includes those working part-time, is 18.3% compared with 9.9% in 2007.
MORE: Behind the foreclosure surge in New York, New Jersey
Graduating in a bad economy has long-lasting impacts. Over the next 10 to 15 years, graduates of the class of 2013 will likely earn less than if they had graduated when jobs were more plentiful, the EPI says.
If they haven't already, lenders are bound to view grads carrying student loans differently, the Fed suggests. Credit scores, which provide a snapshot of the risks of a borrower, have diverged between those with student loans versus those without. In 2012, the average credit score for a 25-year-old without school debt was 15 points higher than that of student borrowers. The picture is bleaker for college indebted 30-year-olds normally ready to buy their first home. Their credit scores are 24 points below those without student loans.
The Obama administration has tried to ease the burden for young borrowers. Officials earlier this month cut commissions paid to private collection companies that chase overdue students loans. This may reduce the incentive to squeeze borrowers for all they have, but it does not help the job prospects of America's young people.
And until their career prospects improve, they'll continue to lag behind the economic recovery.

Latest

America's Low Labor Participation Rate: Now For the Really Bad News

By J.T. Young

America's jobs figures reveal more than high unemployment, they show a declining productive capacity. Job loss remains a major U.S. problem, but the loss of productive capacity, which lies beneath it, is an even greater and longer-term problem. And unlike unemployment, it is something the vagary of statistics cannot long hide.
March's jobs report showed a curious anomaly: low job growth (just 88,000), yet a fall in the unemployment rate from 7.7% to 7.6%. The reason such a push-me-pull-you result could occur was a fall in labor force participation by 663,000 and in the participation rate from 63.5% to 63.3%.

Looking askance at this interaction is not looking a gift horse - job creation and unemployment's rate fall - in the mouth. It is about asking a fundamental question: How long is the continuing decline in America's productive capacity sustainable?
To understand the increasing number of nonparticipants' impact is having to consider the following. Nonparticipants now number 89,967,000. That is slightly more than the U.S.'s employed total in 1976. At 63.3%, the labor force participation rate is at its lowest level since May of 1979, and that means there are less than two workers for each nonparticipant. When America last saw such rates, it was when the participation rate was growing - not shrinking.
Put into context: in December, 2007, when the recession was just beginning, the labor force participation rate was 66% and the unemployment rate was 5%. If today's labor force participation rate matched 2007's, today's unemployment rate would be 11.4% - 50% higher than today's and over twice 2007's. The highest unemployment rate in the recent recession was 10% (in October, 2009) and in BLS's records (going back to 1947), 10.8% (in December, 1982).
However these dismal statistics still fail to communicate the true scope of America's productivity loss. Adding the 11,742,000 million unemployed to the nonparticipants yields 101,709,000 eligible, but not in the workforce. America did not have annual employment reach that total until 1984. Today, it means we have an employment population ratio of just 58.5% - less than six out of ten eligible are working. If maintained as an annual total, that would be the lowest since 1947.
Much has been made of a dichotomy between "makers and takers." However this is too basic and does not capture the true economic complexity. The real relationship is not an either-or one, it is one of consumers and producers.
We are all consumers - we must do so to survive. However as basic as consumption is, it is secondary to production. Without production, there is no consumption.
The problem is, that despite production's essential role in this most basic economic equation, while all are consumers, all are not producers. Of course, not all can be. Yet for all to not be, it means producers must willingly produce surpluses. And the higher the ratio of consumers to producers, the greater the producers' surplus production must be. Again, there is no other way.
And there is one final wrinkle: producers in a free society must do their part voluntarily. Unless we are talking about slavery or communism, even where the state taxes away a part of production - even a large part - the producers produce without coercion. They must be willing to play their role.
Such a system of willing surplus production becomes increasingly threatened when an increasingly large number of eligible workers are not working. It is impossible to see how such a system would not be greatly more productive if more of its consumers were not also producers.
America's employment statistics raise serious questions as to how long producers will be motivated to produce if they too can see circumstances where they too could consume without producing.
If consumption can take place without it - as is evidently happening in our economy and at a greater rate than seen in decades - the remaining more marginal producers will have even greater incentive to not produce. Is the increasing level of nonparticipants evidence of this?
Also, why is a producer motivated to continue producing increasing surpluses, if an increasing amount of those are taken in the form of taxes - as our tax system is doing, and as many are proposing it do to an even greater degree?
The answers are no more appealing than the questions. Either eligible workers are opting out, or being driven out...or both.
Our economic problems threaten to extend well beyond employment statistics and into the fundamentals of America's economic system itself. Is it no longer simply about employed and unemployed, but about the consumer and producer relationship itself? If so, it will be far harder, and take far longer, to fix than many currently understand.

J.T. Young served in the Treasury Department and the Office of Management and Budget from 2001 to 2004, and as a congressional staff member from 1987 to 2000.

Biz News

Hedge Fund Gold Wagers Defy Worst Slump in 33 Years: Commodities

A salesperson shows gold bangles to a customer at the Dwarkadas Chandumal Jewellers store in the Zaveri Bazaar area of Mumbai, India.

Hedge funds increased bets on gold rallying after prices plunged the most in 33 years, underscoring billionaire John Paulson’s view that bullion will rebound.

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April 19 (Bloomberg) -- Nigel Moffatt, treasurer at the Perth Mint, talks about the demand outlook for gold. Shoppers in China lined up for gold this week, while in Hong Kong they rushed to buy bracelets and in India sought jewelry for weddings not set until December. The metal’s biggest price drop in three decades provoked the clamor. Moffatt speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)

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April 17 (Bloomberg) -- David Mazza, principal at State Street Bank and Trust, talks about an exchange-traded fund for investing in gold. He speaks with Adam Johnson and Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

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April 17 (Bloomberg) -- Sean Darby, chief global equity strategist at Jefferies Group Inc. in Hong Kong, talks about global financial markets and his investment strategy. He speaks with Susan Li and Rishaad Salamat on Bloomberg Television's "Asia Edge." (Source: Bloomberg)

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Fake gold ornaments sit between calculators on a shelf in the trading hall of The Chinese Gold and Silver Exchange Society in Hong Kong. Gold futures slumped 7 percent to $1,395.60 an ounce on the Comex in New York last week, the biggest decline since September 2011. Photographer: Lam Yik Fei/Bloomberg

Fund managers and other speculators increased net-long positions in gold by 9.8 percent to 61,579 futures and options in the week ended April 16, U.S. Commodity Futures Trading Commission data show. Investors turned bullish on silver for the first time in three weeks. Wagers on higher prices across 18 U.S.-traded raw materials climbed 5.1 percent to 453,467 contracts, the first gain in three weeks.
A two-day, 13 percent drop in gold through April 16 drove prices to a two-year low, erasing $560 billion from the value of central-bank reserves since the metal peaked in 2011. Official- sector purchases and demand in Asia will support bullion, Paulson & Co. said in a letter to clients last week, joining BlackRock Inc. (BLK), the world’s biggest money manager, in predicting a rebound. The U.S. Mint’s sales of American Eagle gold coins surged eightfold this month from a year earlier.
“Given the price action, this rise in holdings was pretty surprising,” said Dan Denbow, a fund manager at the $1 billion USAA Precious Metals & Minerals Fund in San Antonio. “People may have been looking to get back into the market and are taking advantage of the price to do so. There are people who still have a long-term belief in it. Physical buyers have also stepped up.”

Prices Slump

Gold futures slumped 7 percent to $1,395.60 an ounce on the Comex in New York last week, the biggest drop since September 2011. The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 2.5 percent. The MSCI All-Country World Index of equities slid 2.2 percent and the dollar rose 0.5 percent against a basket of six trading partners. Treasuries rose 0.1 percent, a Bank of America Corp. index shows. Bullion for June delivery gained 2.7 percent to $1,433.10 an ounce on the Comex in New York by 6:44 a.m. local time.
Since reaching $1,321.50 on April 16, the lowest since January 2011, bullion rebounded 8.4 percent. The China Gold Association said retail sales surged April 15 and 16. Imports by India may jump by 36 percent in the three months through June compared with a year earlier, the Bombay Bullion Association Ltd. said April 18. The U.S. Mint sold 167,500 ounces so far in April, heading for the biggest monthly total since May 2010.

Paulson View

Central-bank stimulus will “eventually lead to inflation,” Paulson & Co. said in a letter to clients obtained by Bloomberg News, reiterating a bullish outlook for bullion. The hedge fund is the biggest shareholder in the SPDR Gold Trust, the largest exchange-traded fund backed by the metal. The price plunge was a “panic event,” Catherine Raw, a fund manager in London at BlackRock, which oversees about $3.8 trillion, said in an interview April 16 on Bloomberg Television.
While the net-long position in gold climbed last week, most of the gain was attributable to a retreat in short holdings rather than an increase in long wagers. The divergence shows that the gain in the net position may reflect short traders taking profit, rather than investors becoming more bullish, according to Stanley Crouch, who helps oversee $2 billion as chief investment officer at New York-based Aegis Capital Corp.
“Sometimes you have to peel the onion when you look at this data,” Crouch said. “It looks like that after such a big drop, people who were short were ready to take their gains. That might also be why the price stabilized, and it could mean that it’s even more vulnerable now.”

Short Holdings

Short positions narrowed 8.2 percent to 59,742 contracts, and longs gained 0.1 percent to 121,321. The short holdings reached a record 70,126 in the week ended March 12, and are still more than triple the average since 2006, when the CFTC data begins.
Assets in ETPs backed by the metal tumbled 11 percent this year as investors shunned the metal in favor of equities and inflation remained subdued. Societe Generale SA said April 2 that the metal was in bubble territory and would fall to $1,375 this year, when it was $200 higher. Goldman Sachs Group Inc. advised traders on April 10 to sell the metal. Prices may need to drop to as low as $1,050 after gold entered a “new reality,” Deutsche Bank AG said April 18.
“This drop happened so fast and so violently,” said Mary Ann Bartels, the chief investment officer of portfolio strategies at Merrill Lynch Wealth Management, which oversees more than $2.2 trillion in assets. “People are asking ‘Why do I have this in my portfolio?’ But when we run the analysis, nothing has changed, gold adds diversification. Unfortunately, sometimes a diversifying asset doesn’t go up.”

Central Bank

Central banks are divided on whether the metal is cheap enough to increase investment. Sri Lanka’s central bank governor said April 16 falling prices are an opportunity for nations to raise reserves. Reserve Bank of Australia’s assistant governor, Guy Debelle, said at a lunch in Canberra the same day that gold has no “intrinsic value.”
Money managers took $3.7 billion from commodity funds in the week ended April 17, said Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Outflows from gold and precious-metals funds totaled $3 billion, he said.
Investors are holding a net-long position in silver of 7,694 contracts, the CFTC data show. That compares with a short position of 560 a week earlier and is the most bullish outlook since Feb. 26. The funds trimmed their net-short holding in copper to 27,412, from 32,850 a week earlier.

Crude Wagers

Wagers on a rally in crude oil slid 6.8 percent to 183,032 contracts, the second consecutive drop, the CFTC data show. Bullish platinum holdings slumped 9.3 percent to 20,005, the lowest since August. Those for palladium retreated 16 percent to the lowest since mid-January.
A measure of speculative positions across 11 agricultural products surged 87 percent to 105,246 contracts, the biggest jump since September 2006. Holdings a week earlier reached the lowest in more than six years. Soybean wagers jumped 19 percent to 74,569, the largest gain since Feb. 5, and hog holdings are at the highest in seven weeks. Bullish corn bets gained for the first time in three weeks.
Cold, wet weather delayed corn and soybean planting across the U.S. Midwest. Sowing of the grain on April 14 was 2 percent completed, the slowest since 1993, government data show. U.S. soybean sales since Sept. 1 are 13 percent higher than a year earlier. China is the largest buyer of the oilseed, used to make cooking oil and animal feed.
“Agriculture is going to be very weather-dependent, and the change in diet in China will support demand,” said Jeffrey Sica, who helps oversee more than $1 billion as the president of SICA Wealth Management in Morristown, New Jersey. “For gold, until we see a meaningful decrease in the short positions, it’s going to be very volatile. It’s no longer a safe haven, but a momentum investment.”

Biz News

Caterpillar cuts full-year 2013 outlook

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NEW YORK (MarketWatch) -- Caterpillar Inc. CAT +0.90% said Monday its first-quarter profit dropped to $880 million or $1.31 a share, from $1.59 billion or $2.37 a share, in the year-ago quarter. The equipment maker's revenue dropped to $13.21 billion from $15.98 billion. Wall Street analysts expected the company to earn $1.36 a share on sales of $13.8 billion. Looking ahead, the company cut its 2013 outlook for EPS to $7 at the middle of the sales and revenues outlook range, from $7-$9 a share, and sales revenues to $57 billion - $61 billion from $60 billion - $68 billion. "In China, first quarter economic growth was slightly less than many expected, but in our view, remains consistent with slow growth in the world economy," said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman. Caterpiller shares were down 0.5% in premarket.

Biz News

U.S. economy below trend in March, index shows

WASHINGTON (MarketWatch) -- The U.S. economy ran below trend potential in March, according to the Chicago Fed national activity index released Monday. In March, the index swung to -0.23 from an upwardly revised +0.76 in February, and the three-month moving average fell to -0.01 from +0.12. The index weights 85 different economic indicators and is designed so that readings above zero indicate the economy is growing above average historical trends, and readings below zero indicate the economy is running below-average trend growth. When the three-month moving average moves below -0.70, there's an increasing likelihood a recession has begun.

Biz News

U.S. Stock Futures Rise as BOJ Stimulus Unopposed at G-20

U.S. stock futures rose, signaling the Standard & Poor’s 500 Index will rebound from its biggest weekly drop in five months, as the Group of 20 finance ministers failed to oppose Japan’s monetary policies at a meeting.
Power-One Inc. soared 56 percent in early New York trading after ABB Ltd. agreed to buy the maker of solar-power inverters for about $1 billion. Eldorado Gold Corp. and Barrick Gold Corp. each gained more than 3 percent as the price of the precious metal rose. Caterpillar Inc. (CAT) fell 0.9 percent after cutting its revenue forecast for the year.
S&P 500 (SPX) futures expiring in June advanced 0.4 percent to 1,554 at 7:39 a.m. in New York. The equity gauge fell 2.1 percent last week, its biggest drop since November, as earnings from Bank of America Corp. and International Business Machines Corp. missed estimates and as China’s economy unexpectedly slowed. Contracts on the Dow Jones Industrial Average climbed 50 points, or 0.4 percent, to 14,520 today.
“It’s encouraging to see that there’s no resistance from the G-20 leaders to Japan’s monetary policies,” Veronika Pechlaner, who helps manage about $1.5 billion as investment manager at Jersey, Channel Islands-based Ashburton Ltd., said by phone. “Markets are taking that as a positive as they expect the trend in quantitative easing and yen weakness to continue.”

Japan’s Stimulus

At a meeting in Washington late on April 19, the Group of 20 finance chiefs didn’t oppose the Bank of Japan’s plan to buy more than 7 trillion yen ($70 billion) of bonds a month. The central bank’s Governor Haruhiko Kuroda said he would proceed with his campaign to end 15 years of deflation. The Bank of Japan (8301) aims to increase inflation to 2 percent within two years.
“Winning international understanding gives me more confidence to conduct monetary policy appropriately,” Kuroda told reporters after the meeting. “We will continue our qualitative and quantitative easing for the next two years.”
In the U.S., sales of previously owned houses rose for a third month in March, economists said before a National Association of Realtors report at 10 a.m. in Washington. Sales increased to a 5 million annualized rate, from 4.98 million in February, according to a Bloomberg survey of economists. That would be the highest number since November 2009.
Eight S&P 500 companies including Netflix Inc. and Texas Instruments Inc. post their quarterly earnings today. Of the 103 that have reported so far, 72 percent have exceeded analysts’ predictions for earnings, data compiled by Bloomberg show. Profit at S&P 500 companies dropped 1.1 percent in the first three months of the year, according to forecasts compiled by Bloomberg. That would mark the first year-over-year decrease since 2009.

Stocks Rally

The S&P 500 has surged 130 percent from a 12-year low in 2009 as the Federal Reserve embarked on three rounds of bond purchases to stimulate the economy.
The gains in U.S. consumer stocks, combined with a retreat by global equities this month, have made American companies the five biggest in the world for the first time in eight years. Exxon Mobil Corp., Apple Inc., Google Inc., Berkshire Hathaway Inc. and Wal-Mart Stores Inc. are now the largest by market value, according to data compiled by Bloomberg.
Power-One surged 56 percent to $6.29 after ABB (ABBN), the world’s biggest builder of electricity networks, said it will buy the company for about $6.35 a share. The price is 7.7 times Power- One’s earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg.

Gold Stocks

Eldorado Gold Corp., a Canadian producer with mines in China and Greece, rallied 3.4 percent to $7.29 as the price of the precious metal climbed for a fifth day, its longest rally this year.
Barrick Gold Corp., the biggest producer by sales, climbed 3.2 percent to $18.76 in early New York trading.
Caterpillar dropped 0.9 percent to $79.73. The world’s largest maker of mining and construction equipment forecast revenue of $57 billion to $61 billion for this year. The company had predicted sales of $60 billion to $68 billion in its previous estimate.
B/E Aerospace Inc. may be active after posting first- quarter earnings of 87 cents a share, exceeding the average analyst estimate of 81 cents.
“The company expects continued strong bookings in 2013,” the maker of cabin interiors for commercial aircraft said in a statement.

Success Digest

Does Your Small Business Have Enough Insurance? By Melinda F. Emerson

I am concerned that small business owners do not have adequate liability insurance for their businesses, and I wanted to provide information so that you will know what you need to be protected. I reached out to a few insurance experts to help me explain your options and what is needed in a typical small business.

So what triggers the need for business insurance?  When you are renting a property, a landlord will often require a general liability policy as part of your lease agreement. If you are doing business with a Fortune 500 company, you will often be required to have general liability insurance with at least $1,000,000 in coverage.  If you are consulting or providing expert advice you could be required to have errors and omission insurance. But too many small business owners overlook key insurance needs.
Alice Niles, President of A. P. Orleans Risk Management said small business owners need to make sure they are properly insured. “You should manage your risk, you should not let it manage you. It’s what you don’t know that always hurts you”, said Ms. Niles.
Hiscox insurance expert Kevin Kerridge said, “You actually don’t have to make a mistake to have your company sued, the insurance could cover the cost to defend your business reputation.”
Edmund C. Nelson of State Farm Insurance, suggests that you check with your existing insurance agent about what is available first, and if they are unable to cover you for certain specialty insurance needs, they can provide a referral to another provider.  The good news is that business insurance is not terribly expensive. There are a host of internet providers that provide business insurance at affordable prices.  Here is a list of the types of insurance you may want to consider for your business

• General Liability Insurance: This insurance covers products, completed operations, and premises operations. So if you are a restaurant and someone gets food poisoning you are covered. Or, if you build a new floor in a home, and the floor warps because of the way it was installed, you are covered. If you rent a facility and someone falls and gets hurt, you are covered.

• Errors and Omissions Insurance: This professional liability insurance covers anyone who presents themself as an expert and provides advice or consulting services. If a project goes poorly and the client sues, you will be covered for your legal fees and defense costs. For an average $1,200 per year cost, you could have $1,000,000 worth of professional liability coverage or more.

• Auto insurance: Commercial auto insurance is needed if the vehicles are owned by your company and operated by employees or yourself to do business. You should also consider adding, a hired and non-owned automobile liability rider. This is in case, you or an employee rents or borrows a car to do business during work hours, and someone is hurt by the vehicle, you will be covered.

• Worker’s compensation insurance: It is the law; you must have this insurance if you have employees. The pricing is regulated by the state you operate in.  If you do not collect certificates of insurance from all 1099 or subcontractors, you will be liable for them on your insurance policy. Ms. Hines added, “Worker’s compensation policies are subject to audit. If you can’t prove your subs have insurance, you will have to pay for them under your worker’s compensation policy”.

• Employment Practices Liability Insurance: This extra insurance covers incidents like sexual harassment, discrimination, hostile workplace claims, and unfair employment practices.

• Medical malpractice insurance: If what you do is FDA regulated, you could be subject to medical malpractice insurance.

• Commercial Excess Liability insurance: This is extra insurance if you exceed the limits on your general liability policy or commercial auto policy. It typically costs $300 per year for $1,000,000 more coverage.

• Cyber Theft of your Business Bank Account: Over $1 billion a year is stolen from business bank accounts, according to Bloomberg News. Seventy-three percent are stolen via fraud attacks. There’s a new product on the market that will cover your commercial business account against cyber theft or fraudulent wire transfers.  Under the current banking laws, FDIC insurance doesn’t cover small business bank fraud, it only covers you against your bank becoming insolvent. The Commercial Deposit Insurance Agency is providing this insurance and will cover up to $50,000 for a premium of $175.00 per year.

What is piece of mind worth to you in your business? Call an insurance provider today and find out how much coverage you have or need. Start investigating what it will take to protect your business, before it’s too late.

Success Digest

How to Avoid Risks When Becoming a Solopreneur By David Hing

Going it alone when it comes to your means of generating an income opens you up to all sorts of risks. Cash flow can no longer be guaranteed following the abandonment of a full time contract and instead, you will live and die by your own ability, focus and commitment.
Of course, there is definitely some attraction to this risk. It’s an opportunity to spread your wings and see just how much you are capable of, to say nothing of the financial boon that it can be to work for yourself. More than 480,000 new businesses started up in 2012 according to Startup Britain, meaning the entrepreneurial pull is definitely attracting a lot of people.
Setting up on your own is tough and risky, but actually going it alone without any business partners or additional staff at all can be even more daunting and risky. Here are a few of the more common risks that you face.
Financial miscalculation
Many a business has fallen to an errant miscalculation that has seen the company simply fail to make as much money as anticipated. This is especially true of the solopreneur who is up against the added danger that they don’t necessarily have someone to bounce their financial predictions off. A lack of solid financial predictions or general forethought is probably the fastest way to destroy your business and not having anyone else around could make it harder to catch this very common mistake.
How to avoid: Plan. Planning can save a lot of time and heart ache in this area. Also, just because you’re on your own with this business, doesn’t mean that you are prohibited from seeking outside advice, either from a professional or a trusted friend.
Burnout
Launching a business is exciting. There’s so much promise and potential in a freshly launched business venture, but whilst you can find yourself effortlessly ploughing 12 hours of your day into it at first, it can quickly deteriorate into a tedious slog that makes you just want to quit. Maintaining motivation and output is crucial to your survival and keeping up this pace and enthusiasm is very difficult if you’re on your own.
How to avoid: Part of avoiding burnout is making sure your day is adequately balanced. Being on your own means you’ll have to wear a lot of different hats, but this can work in your favour as it means that when one task becomes tedious, switching to another can be much more effective than simply quitting altogether.
Being uninsured
As a solopreneur, you might feel insurance is either a luxury or something you just won’t ever need. Although it is sometimes the case that solopreneurs won’t find any business coverage particularly useful, it is largely dependent on the work that you do and it could be that not having insurance in place could be opening you up to an unnecessary risk. Just as an example, public liability claims can hit the millions in some cases, and it is unlikely that you’ll realistically be able to cover that sort of figure even if you do become hugely successful in your venture.
What many don’t realise is that insurance premiums for business insurance tend to scale depending on the size of the business itself, so if you’re on your own, those premiums are likely to be much lower.
How to avoid it: Contact a broker to confirm whether you actually could benefit from insurance or not. Being a solopreneur might mean that there’s nothing that you really need, depending on your field. Public liability insurance might be something you could take advantage of if you have lots of visitors to your premises, but the type of coverage you could use will largely depend on the sort of work you do.
Over-expansion
Work flow is the problem of many small businesses, especially when starting out, but most people assume that it will only ever be a problem of not getting enough paid work through and struggling to find sufficient clients to pay the bills. Surprisingly, the opposite can be just as true and it is very easy to over-extend yourself when you’re starting out, especially if you are on your own. Sadly, the consequences of imploding under the weight of the extra work can be disastrous. If you let down your clients, they are very likely to take that disappointment away with them and not only seek other companies for themselves, but to warn others away from your business.
How to avoid it: Know your limits. If you have to say no to the occasional bit of work, this could help you out in the long run, especially when you are just setting up.
Not a lifestyle for the risk averse
Starting a business is never going to be an entirely safe past-time, much less if you are on your own, but the financial rewards can be great, as can the sense of satisfaction of being able to stand on your own with your company. If you are taking this difficult and challenging path, then make sure you do everything in your power to reduce the risks you face as much as you possibly can.

Success Digest

Navigating Through Negative Feedback Online by Kelly Gregorio

As an entrepreneur you have been able to blast away boundaries. You’ve beaten the odds of slim-to-none success and crafted your abilities into a genuine, professional promise for your customers.

Considering your continued hard work and extended efforts, accepting negative criticism can be a tough task. However, if you can achieve insight from feedback and implement it into your performance, the lessons learned can serve your business for the better; but how?
How do we navigate through negative criticisms and come out the other end still motivated (and sane)? Here are four help strategies that will help you manage honest feedback about your small business.
It’s all about attitude
Put a positive spin on every criticism by pledging to find a lesson learned. After reading negative feedback ask yourself: How has reading this afforded me the opportunity to improve? Then, command yourself to find an answer.
Reply back…quickly
It’s a fact of social media life; the worst thing you can do in a negative feedback situation is ignore the commentator. You’ve built online platforms to interact with your customers, which means you should entertain all forms of interaction, even the negative ones.
Remember that while the issue may be between one customer and your company, you have an audience. Not responding sends a signal that you’re not proactive about problems and not concerned about your customer’s experiences – impressions we all want to avoid.
So reply, and reply quickly; social media tracks times and dates, so everyone watching will be clued-in to your customer service’s attentiveness, or lack thereof.
But plan first
A simple discrepancy can turn into a viral conversation should things get out of hand, so have a response plan in place before your carefully chosen words ever strike a key.
First, weed out the wronged from the wailers. Some people just want to complain and online forums provide the perfect stage for theatrics. Being able to differentiate truly wronged customers from those who want to rant will save your sanity.
Still, everyone deserves a response, so find one thing to agree on.  Jenny, I’m sorry to hear about your experience, getting conflicting information would completely frustrate me as well.  It’s important to avoid counter criticisms like: We’ve had some staff issues recently and…  No one needs the excuse, they just need the apology.
Keep in mind that the wronged might deserve an extension of your apology in the form of compensation.  Remember to be personable and specific.
Replying with: I’m sorry to hear you had  a bad experience is not as redeeming as: Jenny, I am sorry to hear about the conflicting information you’ve gotten from different staff, and thank you so much for taking the time to comment.  You’ve opened my eyes and I’m currently remedying our efforts to make sure no other customer has a similar experience.  In the meantime, I’d like to email you an exclusive coupon code to use anytime during our Spring Sale.
Notice how the conversation is encouraged to be finished up in a private realm rather than the comments section? Whenever possible opt for moving the discussion off public platforms.
Focus on the positive
You didn’t ignore the situation, you apologized and you may have even extended an offer; now that’s that.  Allowing yourself to get consumed by negative feedback is a one-way ticket to trauma town so do not dwell on it.  Instead relax, take a break, do something enjoyable and move on.  After all, you’ve got a business to grow.

Success Digest

The Basics of Good Bookkeeping for Your Small Business By Robyn Bolt

The thing that every small business owner needs to know in order to remain profitable, healthy and sustainable is to stay on top of the financial records. Having a monthly bookkeeping regimen is essential for business success. Bookkeeping focuses on three basic concepts, revenue and expenses, assets and liabilities and debits and credits. Bookkeeping often gets confused with accounting as the two encompass the same principles; however, there is a difference. Accounting is really about financial reporting, analyzing of data and filing of tax returns. An accountant relies on the bookkeeping of a business to be accurate and compliant. Bookkeeping on the other hand is recording, organizing and managing all of the business transactions and receipts. The main goal of bookkeeping is to keep the records up to date and accurate. This is vital, as the books will show how a business is doing on an ongoing basis and they enable the accountant to do the tasks they need to perform without experiencing expensive time delays. Let’s investigate the three financial concepts.

Revenues and Expenses A good bookkeeper needs to organize and record all transactions. It is all about of the ins and outs of the business; the revenue and the expenses. Revenue is the amount of income received for goods and services delivered, and are tracked by invoices. Expenses are the items that a business purchases to operate and earn income and these are tracked through receipts. There are various types of expenses such as advertising, phone, inventory, supplies, wages etc. In tracking revenue and expenses you can see if your business made a profit or incurred a loss.

Assets and Liabilities A business’s assets and liabilities are another important factor in bookkeeping. You have probably seen the formula; assets = liabilities + owners’ equity. This equation is what makes up the balance sheet which shows the financial health of a business at a certain point in time. It is important for any business to know what the company has and owns as well as any debts that are owed. It gives a clear picture of the liquidity of the company at any given point. Being highly liquid means you are able to pay off the company debts quickly, or using your current assets (amongst other things). This is statement of your company’s short term health and efficiency. To learn more about short term health and efficiency, then read this article on Business Checkups.

Debits and Credits Finally, the last concept we are going to talk about is double entry bookkeeping which refers to recording business transactions twice, once as a debit and once as a credit.  Double entry bookkeeping is important because any business transaction usually affects two accounts, a debit and a credit.  For instance, if you are purchasing inventory with cash, the two accounts affected are cash and inventory. The inventory account is debited (occurs when increasing an asset or expense and decreasing a liability) and the cash account is credited (occurs when decreasing an asset and increasing a liability or revenue).

The key to bookkeeping is to be organized and know how to record and learn from these three flag posts. The revenues and expenses will give you a snapshot of the businesses profitability. The assets and liabilities can serve well in forecasting a business’s health and understanding debits and credits can help with staying accurate and organized which is great for sustainability of a business.