5 Ways to Fight the Recession As a Small Business

If you have been watching the news, reading the paper, or browsing the Internet, you have stumbled onto the many hopeless articles written about the recession. It seems as if everyone is depending on a financial analyst to give us the green light that things are on the up and up.

However, there are tremendous advantages that a small business can have during an economic crises of this nature. Keep reading this article that will help you to obtain a bit more focus. Just remember that there are many companies out there that are NOT struggling. We can reap the benefits if we understand a few key concepts with an open mind and are willing to invest the time and dollars into the efforts that bring profitability. If you currently are struggling then I ask, why not try something different?

1. Marketing Budget

Advertising your business has many advantages that can reap long-term profits. Simply put, if you have cut your advertising budget there is a good chance your competitors have done the same or it could be that they are still spending and driving away customers from you. Given those conditions you must continue to advertise your business. Why take the risk when you can also take a piece of the pie?

If your competition has reduced their advertising budget, you now face less competition and can easily acquire that market share. Companies with the largest presence reap the rewards, so do your company a favor – invest in the right type of advertising for your business. This is the time to get creative! We always recommend that you take a closer look at the successful companies. What are they doing right that you are doing wrong?

2. Web Presence

Having a web presence has many advantages. First and foremost, most consumers and businesses conduct research on the web when they look for products and/or services. While they are doing research, they are always looking for a reason NOT to buy from you. That is why your web presence must be polished and well presented. If you don’t have the ‘WOW’ factor for your target market, you will lose to your competition. So do yourself another favor and invest in a website that is setup to turn your business into a selling machine. Be a smart consumer and if you need to pay additional money for a custom solution then trust me it will be worth it.

3. Process Centered

Can a new employee walk into your company, open up an operations manual and run the show? If the answer is no, it is time to start thinking about process. The more you streamline and document, the easier and more efficient your business will operate. Many small businesses constantly face losing a key team member in this market. When that team member leaves, things can come to a crashing halt as other team members lack understanding and/or proficiency to meeting those important deadlines. Therefore, take the time to turn your company into a process-centered organization that operates efficiently without the missing pieces of the puzzle.

4. Weekly Evaluations

In order to understand your business and its efficiency, you must spend a couple hours at the end of the week to evaluate what you accomplished and what went wrong. This evaluation is aimed at opening up a discussion so that future problems can be avoided. It should also be noted that you should also create a system for documentation to record your wins and struggles. It is a great tool that you can use to forecast future growth. If it happens once, it can happen again. Wouldn’t it be nice to have a binder filled with answers?

5. Network Network Network

Business owners should know other business owners. It is the Golden Rule. As a small business it is imperative that you are always expanding your network and reach. There has always been a misconception about networking. It is NOT about how many people you know, it is about how many people know about you. More importantly, what is their perception of you?

Businesses are always in front of other consumers and businesses. It is the belief that you can usually obtain about 3% of your customer reach the remaining might become your client later down the road. So take the time to network and build your referral network. Do not be shy to refer other businesses as a connection. After all, if we work together then we can all build a profitable business.

Use the five criteria points outlined above to help move your business into profitability. All five concepts are key components to running a business that is always in line with the market. Get Creative!

8 Investment Property Documents That Landlords Should Keep

If you are a landlord, or thinking of becoming one, there are certain financial documents that you will need to maintain for your records. These documents generally fall into the areas of rental income, allowable expenses, and capital costs. You should keep detailed records of every dollar of rent that you charge and receive, as well as all documents regarding the lease – including all pertinent dates.

In addition, your allowable expenses need to be recorded and maintained. These include every expense related to managing or leasing your investment properties. Each of these expenses can be deducted from the income you earn from rentals, which will reduce your taxable income. These expenses involve costs such as 1) any documentation of fees provided to leasing agents, attorneys, and accountants; 2) property insurance for both buildings and contents; 3) property loan interest documents; 4) property maintenance and repair records; 5) costs for utilities; 6) rent and service charges; 7) local tax bills, and 8) advertising and other costs associated with leasing the property.

Beside those 8 investment property documents, you should also maintain records of any capital costs for the property – including furniture and appliances you provide. Equipment used in your day to day management can also be included, but only if you keep proper documentation of the dates and costs of each purchase. Your best bet is to have your accountant guide you on what costs can be deducted. Your primary concern should be to document all income and expenses, and be sure to separate your business and personal records.

Of course, should you sell any of your properties and realize a profit from that sale, you will have to pay the proper capital gains tax. Fortunately, some of these costs can even be deducted from your capital gains tax, which is another important reason to maintain the appropriate documentation. As with other financial decisions, seeking the guidance of your accountant is always recommended. He may even have advice as to which time of year is best for selling property, from a tax perspective.

How Many Mental Blocks To Investing Do You Have? Is a Managed Account the Answer?

Average CTA’s, investors, and people in general have an overwhelming desire to be “right”. Who likes to be wrong? You read and hear it every day from friends, fellow traders, (spouses), how important it is to be right, especially when they make a market prediction or, even worse when they put real money into a trade.

The amount of information which an average CTA is exposed to and has to process on a daily basis is staggering. And the scientific fact is that the human mind can only focus on one thing at a time and take in only so much information before it is lost. That’s how professional Magicians / “Street Hustlers” make a living – Misdirection. They get your brain focused on one-thing while they’re pulling off their grand illusion without you even having the slightest clue how they did it. As a result we tend to develop “shortcuts” to thinking and visualizing helping us cope with the multitude of information we are continually exposed to. These “shortcuts” are very useful under most circumstances, however the implications for investors or CTA’s of this mindsets can be most detrimental, and make the probability of being successful in the markets practically zero, unless he or she can deal with these “goblins”. The “goblins” I am referring to are mental biases which are part of everyone’s make-up and just plain human nature, and there are 13 (lucky number), of them which I will list for you and give a brief explanation.

#1: Reliability Bias: This is a bias where a person may assume something to be accurate when it possibly may not be. Example: Statistics and information you may use for back-testing or that comes to you across CNBC, Bloomberg, or the internet are very often filled with inaccuracies. Unless you can wake up in the morning and know that the possibility for bad data and misinformation can and does exist, it will set you up to make countless errors in your trading & investing decisions.

#2: Lotto Bias: Every CTA or investor deep down wants to “control” the markets and specifically price action, and so most totally focus on “Entry”, where they can coerce the market to do a lot of things before they jump in. However, once the position is established, price action is going to do what it is going to do. As Ed Seykota said: The golden rule to trading is “Cut losses, Cut losses, Cut losses, and then you may have a chance”.

#3: Representation Bias: CTA’s and investors will assume that when something is supposed to represent something else, that it is reality. Therefore they assume that a daily candlestick chart is the entire market or that a Fibonacci number is the entire picture. Instead, that is really just a shortcut for interpreting a whole lot of information.

#4: Randomness Bias: Investor’s & some CTA’s love to assume that the market is random and has many patterns (double bottoms, Head & shoulders, Spikes, etc.) that are easily tradable. However, in my opinion the markets are not random. Price distribution does show that over time markets have an infinite variance, or what guys with PHD’s. call “long tails” at the end of a Bell Curve. What they fail to understand is that even “random markets” can have long “streaks” and as a result trying to pick tops and bottoms can be a road to disaster.

#5: Law-of-small numbers Bias: CTA’s, investors and traders alike tend to see “patterns” where really none exist, and in reality it only takes one or two occurrences of this “pattern” to prove and convince a person that it is a “fact”. When you make a cocktail of this particular bias, with a Conservatism Bias (read below) it could create a virtual tinderbox ready to go up in flames.

#6: Conservatism Bias: Once a trader or CTA believes they have found a “pattern” and is convinced it works (by means of cherry picking or selective memory), they will do everything under the sun to avoid scenarios, situations, and confirmation that it does NOT work.

#7: A “Need-to-Understand” Bias: Every CTA or trader has a need to attempt to make order out of price action in the markets and find a rationale and reason behind it. This effort, to “find order” will hinder that CTA’s ability to go with the flow or follow the trend because, for lack of a better phrase, see what they want to see rather than what is truly happening in front of their eyes.

These are the first 7 out of 13 trading / investing biases that many CTA’s and traders are prone to. Again, it is built into our DNA and is human nature. Knowing and realizing them is the first key to unlocking the door to better investing and improvement. I will follow-up tomorrow with the remaining 6 mental blocks that may be holding you back from above average returns in the markets.