starting a business...during the recession :S

Summary

This article talks about tips for launching a small business during the recession. It gives four good reasons for yes to starting one, and they are as follow:

1) There is less competition.

2) Costs can be lower because it's a buyer's market for real estate, equipment and labour right now.

3) It can be easier to recruit new employees because people who have been laid off are eager to find new jobs.

4) last but not least, There is less pressure on youto expand your buesinss. You don't have to worry about fighting with other companies for market shares.

But before all these, another 4 things that one has to take in consideration before starting a business is to:

1) Do your research, and that means figuring out who your competitions are, and offering something new and refreshing to attract customers.

2) Secure enough funds, and that means don't even think about starting a business undercapatalized! Talk to a bank teller, and ask them for advices on loan borrowing...

3) Get creative with your marketing. People are natually attracted to things that are different, interesting, and full of surprises. Eye-catchy ads are important, as finding cheap and efficient ways to do so as well. (ps. there are a lot of free advertising available online and cheap ones on the ever popular ones like Facebook.)

4) Be prepared for the goods and the bads. In simple words, WORK YOU ASS OFF, AND PREPARE FOR ANYTHING... and that is... anything POSSIBLE :)

Connection

This article is related to the overall of chppter 11 - 16 in the accounting textbook, by they how it talks about what businesses are and the processes and procedures that may be related to one.

There would be the need of accountants to keep the business's financial status updated and well regulated.That includes, payroll accounting - salaries and wages, tax deductions...etc. Analyzing financial statements - making appropriate comparable statements for the insiders and outsiders.

Last but not least, Banking:

- safekeeping of the business's $$$
- processing cheques and bank credit card vouchers, and electronic transfer of funds.
- lending money to businesses.

- and handling of foreign currencies.

Reflection

I know it is a scary move to make, to head out on your own and start your own small business. The comfort and security that working for someone else goes away. You become 100% responsible for 100% of everything involved in running your own business.
The big question is trying to figure out if your idea is one that will catch on
But hey, a recent report shows that small business shines in tough economy. One more thing, you must have faith in your self, and the determination to succeed, else there will be no point of starting anything.

CHAPTER 16

GIMME GIMME MORE ..... $ :)

SUMMARY

This article talks about some of the new government regulation and policies on income taxes in 2009.

According to the Canadian Taxpayers Federation, the higher employment insurance and Canada Pension Plan payments will wipe out skimpy tax cuts for many Canadians in 2009.

In the past, CPP contribution limits are nomally raised each year while EI rates are lowered, which makes the overall increase to payroll taxes very small. (Payroll taxes are federal taxes that an employer is required to withhold and/or to pay on behalf of the employees. the employer are required to withhold federal income taxes as well as social security and Medicare taxes from the employees' wages. The employer is also required to pay a matching amount of social security and Medicare taxes for the employees and to pay Federal unemployment tax.)

But next year, both the EI and CPP contribution limits are giong to increase. Canadians will pay an additional $188 in payroll taxes, said the federation in its annual new yer tax change calcualtions.

CONNECTION

Part of this chapter talks about payroll dedcutions (as described above as payroll taxes)

employment insurance - designed to replace a portion of lost wages to qualified employees who are laid off because of lack of work or who become ill for an extended time. Working Canadians pay a percentage of their earnings into this government-run insurance program.

and the Canada Pension Plan - which are retirement plans administered by the government. Generally, the amount you receive when you retire depends on the amount you paid into it. Canadians are fortunate to have access to a wide range of government programs and support services. To cover their cost, every working Canadian pays a portion of their earnings to the federal and provincial governments in the form of income tax. Higher-income earners pay more than those who earn less.

These payments all have a certain amount of contribution limits in order to receive the desired amount of renumeration and tax returns.

REFLECTION

Canadians are fortunate to have access to a wide range of government programs and support services. To cover their cost, every working Canadian pays a portion of their earnings to the federal and provincial governments in the form of income tax. Higher-income earners pay more than those who earn less. Some people deabte about our income taxing system, where it is unfair for a higher income earner to pay more income tax, this restricts the individual to advance for a higher paying job. But some argue that the higher income earners have the responsiblity to help contribute, usually to the lower income earners.

CHAPTER 15

TOUGH TOUGH TIME...

SUMMARY

Toyota, the world's largest automaker, sank into the red for the October-December quarter, heading for its first annual net loss since 1950 because of the plunging global sales and the strong yen, which reduces the value of overseas earnings, adding salt to the wound.
Until the U.S. financial crisis erupted last year, Toyota had been on a roll with its fuel-efficient models, boasting rising profits for seven straight years.
"the downturn came extremely suddenly," said Yasuaki Iwamoto, analyst with Okasan Securities Co. in Tokyo, "the world's auto demand just changed in a flash."
Just a few hours before the earnings were released, Moody's Investors Service lowered its top credit rating of "Aaa" on Toyota by one notch to "Aa1," citing fears about its profitability.
A turnaround promised by Kinoshita, Toyota executive vice-president assured investors that Toyota will get back on its feet through cost cuts and new products. He said Toyota continues to be committed to developing gas-electric hybrids as a pillar of its growth strategy.

CONNECTION

Chapter 15 talks about how people would analyze a company's financial statements in order to make decisions within and outside the company, and how they will affect the insiders and outsiders in relation to the values and information presented on financial statements. As mentioned from the article, it has been told that investors have lowered its top credit - "Aaa" on Toyota to "Aa1", something that doesn't necessarily sound so great anymore. This indication shows that investor's confidence in Toyota motor corporation have decreased; Probably an outcome resulted from the recent values and percentages stated on the financial statements of Toyota. While this unfortunate event have happened to the all mighty Toyota, the insiders, also known as the managers, and other executive management members of the company have made promises and decisions as to the commitment to continue offering excellent quality and high performance vehicles for the upcoming eco-friendly products.

REFLECTION

From newspapers to radio broadcasts, televisions, and even on the worldwide internet, news about numerous businessses and companies closing down are no longer any big surprises to the people living in the current state of an unknown period of financial downturn. Globally, it is obvious that everything is slowing down, but natioanlly, everyone (governments, especially) is trying their best to boost their economy back up and in turn to drive the global economy back to it original state, more or less, every bit of efforts counts. We can see this phenonmenon in the article above, where the all mighty Toyota Motor Corp. is currently expericing its first ever loss in decades, and yet, they are not beaten down by the downturn scare and are trying their best in everyway to maintain its status in the industry and concentrating on their research development int he effort to bring back up its sales and what not. They want to ensure their investors that they will not give up and is down for any obstacles that comes to them.

CHAPTER 14 - Tougher credit rules for consumers

Article Source: http://www.contracostatimes.com/ci_10906553

Summary

Easy loans are no longer a case for many consumers. Many of the country's major credit card issuers are almost "in defense" to reduce credit limits, increase their interest rates for customers with problematic credit scores, and sending out fewer applications for new customers in response to tougher economic times and rising default rates.

Bank of America and Capital One has been posing new and stricter policies for their Visa and MasterCard holders. "In this environment, particularly now, do always make your payment on time and pay as much as you can. Don't do anything to increase your credit risk. Don't be late on your payment. Don't exceed your credit limit," as a tip provided by Bill Hardekopf, chief executive officer of http://www.lowcards.com/

As we can all see, the ripple effects are enormous. With this tightening up for credit requirements, a great deal of lives will be affected in many ways, and harsher policies are something definite that we can all be expecting for.



Connection - Bank Credit Cards

As told from the text book, Credit cards are used so much in our society that we can visualize a society without money -- a cashless society. We are so used to credit cards that many individuals and merchants would be badly affected if their use were ever discontinued. With bank credit cards, consumers can make purchases on a short-term credit at any retail outlet that accepts the bank's credit cards.
The article talks about how major chartered banks that sponsor and provide the credit card system are lowering their credit limit, and uping the interest rates for many. Also, the increasing reluctance to accept new customers since mid-2007, when the global economy encountered a disruptive turmoil and creating an uproar of confusion in prices across the country and worldwide. Since then, a "disorderly chaos" has developed in the financial states of many.


Reflection

The declining availability of the plastic money is a sign to the financial state of a country, and currently, people around the world are experiencing a declining in both of their disposable (cash) and "disposable" (plastic) money. With the increasing minimum payments and tightening terms and conditions on existing cardholders. I think that it will for sure be changing the daily living patterns of many.

Chapter 12 - Retaielrs fight Shopping blues with discounts

Aricle Source: http://www.miamiherald.com/business/story/729611.html

SUMMARY

This article talks about how retail companies are starting their Christmas sales and cash discounts early-early; mainly because of the weakened global economy, and therefore, leading to the lack of confidence among consumers.
As described by a mother from Hollywood, "The economy is so extremely out of control; even with a job it's very expensive. You have to cut back on food, clothes and everything.''
It is the lack of confidence (money-wise) among consumers that have retailers worried about the holiday season, which is certain to be one of the worst in years. The credit crisis, collapsing housing market, crashing stock market, rising unemployment and increasing food costs add up to a deadly combination.
Retailers have been trying hard to jumpstart the season by promoting early sales and deals to customers... so to help them gain back a little more confidence and start spending money again.
Wal-Mart even kicked the season into gear earlier than ever before - on Oct. 1 with 10 toys priced at $10 each, as well as other 'cheap deals'...

CHAPTER CONCEPT - CASH DISCOUNTS

So in Chapter 12, we learned that a cash discount is a reduction of the amount of a bill if payment is made on or before the discount date stated on the bill. And the purpose of a cash discount is to encourage the customer to pay promptly. In this article, businesses, in particularly the retail industry, is trying to get through the global economic slowdown by treating their consumers to early sale events and or cash discounts that will allow them to take advantage of the available discounted amount, while receiving the money on time; so it's like a win-win situation. With the economic recession period that the world is currently facing right now, It would be safe to say that it is not only the retailer industry, but many others as well, that are struggling through the hard times; yet, trying their best to think of possible ways to retain and attract customers by making them becoming more confident in their spending... regardless of all the hidden problems that may be lurking...

PERSONAL REFLECTION

After reading the article, I realized that there has really been a mood shift among consumers. There is an emerging trend towards buying what we need vs. what we want, and for most consumers, including me as well, the buzzwords this year are definitely low prices and the best value possible. No need to say more, it has some been very visible weekends that we are seeing less people going to the mall for the purpose of fun shopping; rather, just people getting their groceries and other basic needs, such as food. Another large portion of others are just there roaming around, hanging out with friends, and window shopping... Inevitably, this is going to be one of the slowest season for everyone this year.

China stops tainted sweet sales

Article & Pictures: http://news.bbc.co.uk/2/hi/asia-pacific/7637001.stm#melamine

SUMMARY
This article is basically expanding on the latest topic on another scandalous Chinese food product involving milk contaminated with an industrial chemical called Melamine. This time, the lucky "winner" is a popular sweet called the White Rabbit candy. The producing company, Guanshengyuan, has been halting all export sales of the White Rabbit candy to more than 50 countries, and consequently, its well-established name is ruined. Both Canadian and British regulators have already taken down all of the White Rabbit candy, and on top of that, all Chinese-made dairy products are also to be pulled from shelves. While in Europe, a ban has been made on all children food containing any traces of milk imported from China, and in the United States, regulators have warned consumers to avoid seven instant coffee and milk tea products that were made in China; even Mr Brown products had been recalled to be possibly contaminated with melamine. :OOO
Below is a map showing all the affected countries from China's tainted food products:





CHAPTER CONCEPT - INVENTORY

In the text book, we learn that businesses that buy goods for the purpose of selling them at a profit are dealing in merchandise, and the quantity of merchandise on hand is known as merchandise inventory or stock-in-trade. So this article that I've chosen talks about how food retailers all over the world are experiencing a food scare in their major suppliers (wholesalers) from China, and that they are forced to take down all those poisonous food products that they paid for as inventory and was expecting for a profit; but now it has became an "expense and a LOST!



PERSONAL REFLECTION
I was shocked at the news when it first came out, but at the same time, was kind of expecting this to happen one day, just because of the reputation that China have always been tagged with (fake Gucci and phony drugs). But with the food product, this has just gone a little to far. On the last news, it is said that four babies have died and more than 53,000 children have been affected from drinking contaminated powder milk in China, this is awful, and the fact that it happened in its own domestic country makes it worst! Having kidney stones and not being able to pee/poo for no reasons is absolutely terrible, especially to the youngs and prematures! I find this very unacceptable, and that the ugly truth of money > people's ethics is making me sick!

Just look at all the sweets that kids used to crave for, now they're just silent killers that ruins your life for no good reasons.