Tag: Capital
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Business Barriers
No business is instantaneously successful. There are multiple obstacles referred to as business barriers all owners and managers have to overcome. There are three primary groups of barriers for every business out there.
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Debt or Equity in Small Business – Fundamentals
Small business books and manuals explain the formula used to determine whether additional debt increases the return for investors commonly known as return on investment (ROI).
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How Much is a Fair Profit? – Part IV of V Return on Capital
For all investors in business, capital is the fronted equity an investor risks in exchange for a return. This return can range from zero to infinity depending on the success of the business. A fair profit is really a function of four different factors.
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Three Primary Characteristics of Successful Businesses
Over the last 27 years of working in the world of accounting, I have become convinced that to be successful in business, you must have three primary characteristics. It is the common thread that binds all successful operations in every industry I have witnessed.
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Shareholder Agreement – Capitalization Clause
The shareholder agreement lays out the rules of the relationship between the shareholders of a company. Most often the agreement is poorly written because the legal team fails to understand the business aspect of each of the respective sections. One of these sections is referred to as the Article of Capitalization or commonly called the Capitalization Clause.
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Stock
The one single term mostly equated to capitalism is ‘Stock’. When a business is incorporated, stock is the core medium of exchange for the investment. The company issues a certificate referred to as stock in exchange for the investment – most often cash. This is the one true form of pure risk. Most other forms of investments generally have…
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Internal Revenue Service (IRS) Definition of an Expense
The Internal Revenue Service defines a business expense as ‘ordinary’ and ‘necessary’. Ordinary expenses are those costs typically incurred in your industry. A restaurant would not ordinarily purchase vaccines. And a medical practice would not purchase 50 heads of lettuce.
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Capitalizing a New Home Builder Business
Bankrolling any startup business is difficult enough. Capitalizing a new home builder operation is a leap forward in required funds.
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How to Find Investment Capital – The Family Connection
There is one responsibility of all business entrepreneurs that is loathed more than any other. It’s asking for money. First off, you have to find financial resources and then you have to ask for investment capital.
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Do I Need a Business Plan?
Whenever someone wants to start a business, they ask their friends and professionals what they should do. The standard answer is always, ‘You need a business plan’. Really, do you? If I do, what is it and how do I proceed?