Simple Financial Statements and their Functions

Simple financial statements include the following

Balance sheet - this reflects the value of the business. In the balance sheet we find assets, liabilities and the capital invested. The simple equation for balance sheet is Assets = Liabilities + Capital.

Income statement - is also known as the statement of profit and loss. It reflects the financial status of the company whether it is incurring profits or losses. In the income statement sales is deducted with cost of sales to get net income before other income. Other income such as bank interests is then added to get the net income before tax.

Statement of Retained Earnings - this explains the changes in the company’s retained earnings for the period. It reflects the profits or losses incurred, dividends paid and the amount retained for future use.

What is the Marketing Process?

According to Kyle (2006) the basic marketing processes are:
1). Analyzing the customers and the business environment in order to
2) identify key opportunities to better and more profitably meet customer needs,
3) figuring out how to act on those opportunities, and then
4) implementing your plan.

Analyzing customers and business environment means identifying your target market, knowing their buying patterns and other pertinent information and also knowing the competition since they form part of business environment.

Identify key opportunities to meet customer needs. Once the market is identified, know the needs that the company can cater to.

Figure out how to act on opportunities is finding ways to explore and exploit these opportunities and translate them into profits.

Implementing the plan means carrying out or executing the plan in the course of doing business.

What is Entrepreneurship?

Entrepreneurship pertains to new businesses which are designed to address particular opportunities. Entrepreneurship is also defined as the process of determining, assessing and utilizing opportunities. Webster defined an entrepreneur as “one who undertakes to start and conduct an enterprise or business, usually assuming full control and risk."

Since a number of new businesses fail, an essential part of entrepreneurship then is taking risks. Entrepreneurship does not deal with calculated risks. Risks cannot be insured nor minimized. And entrepreneurship deals with these risks by creating solutions to problems.

The vision of an entrepreneur is what drives the entrepreneurship. It also takes a lot of hard work and determination to create an entrepreneurship.

Microsoft, Yahoo and Google

Online business has never been more exciting as Silicon Valley giants Microsoft, Google and Yahoo bid for more online presence and get the lion share of advertisements and users.

The past few weeks, we've seen Yahoo negotiating with Microsoft while cavorting with rival Google. Google and Yahoo seem to reach an understanding. Microsoft and Yahoo are temporarily at odds with each other. The Silicon Valley love-hate-triangle seems to be intensifying as deals are being negotiated by all sides.

Is it possible for all three to work together? By the looks of it, this could be a distinct possibility. With Yahoo desperate for more customers, Google, dangling an irresistible partnership deal on advertising and Microsoft, wanting to penetrate the online business world, this scenario would not be far fetched.
Yahoo

Yahoo is in a bind right now. Among the three powerhouse, Yahoo is the one having troubles. In its bid to thwart the competition Google for the best web search company title, it has forgotten to develop its other important features. Thus, they find themselves unwittingly biting Google's dust.
Google

Google is unquestionably the force to reckon with when it comes to web search and brand advertising field. It has dominated the web search industry hands-down and beaten internet media pioneer Yahoo in that area. But Google could not be complacent especially if Microsoft is now making plans to enter the online industry.
Microsoft

Microsoft is the most profitable technology company to date. It is the software giant that also sells personal computers. Being Fortune 500's no. 44 most profitable company in 2007 with net profit margin pegged at $14.1 billion for personal computer sales alone, Microsoft is in a very comfortable position. This year, its most ambitious move so far is to offer Yahoo $44.6 billion. Microsoft is aware of the huge potentials of internet technology. So far, it has lagged behind in internet presence compared to Yahoo and Google. That is why it intends to enter this highly competitive arena in the coming months or even years. Steve Ballmer himself admits that “the future of the way people consume information, the way people socialize and connect is going to change a lot more in the next 10 years even than in the last 10.…... We are absolutely committed to be the leading player in that endeavor.”
Analysis

The name of survival of the game has always been challenge and response. That is why Microsoft and Google have remained on top of their game. It is in their abilities to respond to changes and be able to adapt to it. They also spearhead in introducing innovations in their fields. Needless to say, that is how these two giants manage to stay in shape - their ability to rise up to challenge enables them to lead the pack.

In the same vein, that is the very reason why Yahoo is a step behind. Yahoo's complex organization has somehow failed in responding to competitive threats. Response to the challenge came a tad late hence the reason for its dilemma right now. Yahoo's current status is not a result of one wrong decision or one instance of inaction. It is an amalgamation of various factors and poor decisions which has piled up through the years. It has floundered for the past 18 months but the trouble started two to three years ago.
What's Yahoo to Do?

There is still hope though for Yahoo. All is not lost for this internet pioneer media.

First, Google's strengths could be its own weaknesses. Its specialty is in the web search and search advertising areas. Due to this, Google has to spend most of its time on these two lucrative endeavors. The best strategy for Yahoo then is to could focus on other areas Google is not strong at. What those areas are, that's what their research department should find out. Once they found their niche, they need to develop it and strive to be ahead and stay ahead of the competition.

Second, social networking sites are gaining popularity these days. Google has tied up with Myspace for its advertising endeavors. Yahoo should do the same. They can tie up with Facebook or buy Facebook if they have the financial machinery to do so. If not, they can always start their own social networking site.

Third, Videos are also gaining prominence. This is one area Yahoo could look into and develop. Mobile phones are making it easier to upload videos on the net. Mobiles and videos still have huge potentials. Advertisers follow where the customers are. And videos like youtube are where customers are hanging out right now.

Lastly, leverage their 12,000 strong employees. Too much ideas and too little execution could be Yahoo's undoing. Management should learn to work with those at the bottom to come up with profitable ways to turn the company around. The decision making process is not exclusive to the management. Employees at the lower rung of the ladder should be allowed to contribute.

Google Adsense

Google adsense is a program that serves ad run by Google. Website owners can become a part of this program by registering for an adsense account. Google Adsense is in a nutshell an online advertising platform.

Once a website owner has registered and been accepted to the program, he can then display ads from Google using text, image or video advertisements.

Some webmasters maximize their AdSense income by:

1. traffic generating techniques such as online advertising.
2. provide great content on their sites
3. copies that promote clicking on ads.

For those who want to advertise with Google, they could sign through Adwords. This is the service for advertisers.

Adsense is gaining popularity among websites owners because the ads are not as obvious or distracting as some banners and are often based on the content of the website. A lot of professional bloggers are using this tool to generate income from their blogs.

Successful bloggers like Darren Rowse and Jeremy Shoemoney have been raking huge bucks from their Adsense accounts. Shoemoney received a check worth $132,994.97 from Google Adsense in August 2005. These are but two amongst the thousands of bloggers who made a fortune with Google Adsense.

A word of caution though, clicking your own ad is not allowed. Reloading your page repeatedly to increase page impressions could get you banned by Google. Don not promote your ads extensively or use too much keywords. These will not help in your earning as well.

The things to do though to increase your earnings could include placing your ads near content and navigational aids or at the end of the article. These seem to attract readers. Also, the large rectangle 336×280 is the best paying adsense format according to surveys.

Google Adsense has been hailed as one of the most lucrative money-making venture on the net. And its popularity is soaring high with more and more website owners joining in.

Business Fundamentals and Trends

In order to succeed in business, it is important to know the basics of business. Also, the current trends dictate to some degree the products being sold in the market. A good business strategy would be to keep oneself abreast of the latest developments particularly in technologies and fashion in order not to stay behind the competitors. Take for instance youtube. The latest craze in the internet nowadays is video-sharing. Companies that can promote their products through video-sharing would most likely have the upper hand in marketing compared to their competitors.

Fundamentals of business include proper planning, setting up objectives, promoting customer relationship, promoting supplier relationship, dealing with competition and use of accounting. To be able to manage these aspects well would spell the difference between success and failure in business. It is also important to know the legal aspects affecting the business and the need to adhere to business ethics.

Having a plan and setting up objectives before embarking on a business or during business is essential because it would be hard to provide a direction with which the business will follow without vision.

Customer relationship is very essential to the business. How well you relate to the customers could translate into profits in the income statement. Choosing the target market also falls under this. The target market must reflect the style, image and price point of the product you are selling. Otherwise, you will not be able to penetrate the said market.

Supplier relationship is important because without suppliers securing raw materials to create the finish product would be impossible. It is always good to establish good rapport with supplier as this would greatly facilitate the production process.

Competition is one of the threats to business. It is important to size up the competition to be able to make your products competitive in the market. Allocating proper resources and taking the time are important requirements to remain competitive.

Accounting is fundamental to business because it enables you to determine how the business fares. So one can make sound management decisions and adopt necessary changes. Learning basic accounting such as bookkeeping or making the balance sheet and income statement would be very helpful.



More on Business Fundamentals and Trends here.

The Importance of Branding

According to Diana Rowland, president of Rowland & Associates, Inc., a training firm in San Diego, California, author of Japanese Business Etiquette: A Practical Guide to Success with the Japanese (Warner Books, 1993) and co-author of International Excellence: Seven Breakthrough Strategies for Personal and Professional Success (Kodansha America, 1996), "Global competition is too great to "wing it" when you go abroad. Savvy business people learn about the specific cultural differences for each country where they do business. And the differences are significant."

Take McDonalds for instance. This brand is recognizable worldwide. Their global success is attributed to the fact that they consider several factors before infiltrating a country. This is so because there are factors operating in domestic mix that differs or is not applicable in another.

To be competitive, marketing the product internationally should take into consideration several factors that could play a role in the success of the product. These factors include: country's culture, resources found in that target country, current marketing situation, existing competition for McDonalds products, environmental forces operating in that country, cultural influences such as family, state, church, school and media. The 4P's is essential in coming up with international marketing concepts - product, price, promotion and placement.

An example of this situation is the fact that McDonalds may sell a lot of burgers in the United States but this could not be true in China. Since Chinese prefer to eat chicken more than beef. Necessary adjustments then should be adopted before penetrating international market.

Other factors important in international marketing are: language, culture and religion.

Language and cultural blunders inevitably lead to deals that go awry resulting in lost opportunities. The areas of cross-cultural and language training are essential to conducting international business and marketing strategies.

The development of branding is one way of remaining competitive in the global scene. There are many examples of branding that has operated successfully with similar images that are designed to be culturally generic, such as Pepsi-Cola in United States and Japan. Market placement of goods refers to the methods which define the sectors where the goods need to get delivered to or identifying segments of potential customers. International and local trade laws obviously affect the marketing strategy of a business as these could set limits in the approach they used.

To succeed globally, a business requires an amalgamation of factors - effort, money and time. The multinational company should consider the fact that the international market is four times larger than the U.S. market. Learning how to maintain competitiveness in the international market also enables the business to acquire necessary rudiments to keep their advantage at the local market. To be successful, the best strategy for a business is to weigh risks against the possible benefits.

Understanding Accounting

To understand accounting you must understand the basics which are debit and credit. Debit and credits are used to group the accounts. To understand debit and credit you must understand the equation A=L+C or assets = liabilities + capital. An increase in assets means an increase in debits. Credit is a deduction to assets. In liabilities and capital, the opposite is true. An increase in credit means an increase in liability and capital.

Debit entries are deducted to liabilities and capital. In order to understand the A=L+C equation, you need to understand what are assets, liabilities and capital. Those that fall under the assets are accounts that are considered the resources used by business such as cash, accounts receivables, buildings, equipments and others. Liabilities are what the business owes such as accounts payable, accrued interest payable and others. Capital is the investment used to acquire or produce assets. Accounts under assets, liabilities and capital are found in the balance sheet.

Income statement refers to the income earned by the business in the course of its operations. Income statement requires sales and cost of sales. Sales pertain to the gross sales of the business. Gross sales deducted by the cost of sales would arrive at the net sales or the net income before other income and tax. The amount arrived at in net income after tax could be used as the capital of the business which leads us back to the equation A= L+C. This equation serves as the core of accounting.