Business Marketing & Finance Resources

Whether you want to create a new company, to develop a new product, opening a branch, purchase new machinery, breaking into a new market or enter a new business category, the most effective way to evaluate the profitability of these investment projects is using NPV.

Simply find the NPV of an investment project, to see if the project is viable or not.

Also, if you have several investment options, the NPV lets us know which of these projects is the most profitable.

Net Present Value (NPV) is the result of subtracting from Net Profit Updated (BNA), the investment of the project:

VAN = BNA – Investment

Net Profit Updated (BNA) is the resulting amount of total project cash flow, but converted to a current value via a discount rate.

The Discount Rate is the minimum rate of return we expect for our investment.

To better understand these concepts, we see an example of how to find the NPV of an investment project:

Suppose we want to find the NPV of a company you want to create.

To do this, based on our budget revenue (sales forecast) and our budget expenditures (costs and expenses), we have developed our projected cash flow for the next 5 years (usual to find the NPV is using this term).

The last line of the projected cash flow (revenue minus expenses) is:

If, for example, we calculate that the investment required to create the company amounts to U.S. $ 16 000, we could say that the company in 5 years would have a profit or gain of U.S. $ 4,000 (20 000 – 16 000), and at be a positive amount, the business is profitable.

But this would not be entirely correct, because we have not taken into account the value of money over time, i.e. we have not considered that the projected 20 000 today would have another value.

To find the present value of 20 000, we need to update this amount through a discount rate.

To determine the discount rate, we must determine what the minimum rate of return you could expect for our investment, i.e. how much we would grow a minimum, our investment in 5 years.

Therefore we can guide the rates of return given in investment projects with the same risk.

Suppose we have found the rate of return offered by banks and a savings deposit and the rate offered by other investments, and have concluded that the least we can expect for our investment is a return of 14%.

11. Reduce investment

As in any business, to open a restaurant, we always seek to reduce investment, but without thereby having to sacrifice quality.

In the case of restaurants we can reduce the investment in the local scenery, which consumers generally do not take into account, as long as they offer good food, there is a total health and good care.

Another way to reduce investment in a restaurant, is starting to rent the equipment and furniture, or seeking agreements with vendors that provide them, for example, in exchange for advertising.

12. Spare no expenses

By investing in the creation of the restaurant should not skimping when it comes to supplies or offers variety of concerns.

But even as regards design and furniture, for example, by purchasing second-hand furniture, and in a state not very good.

We must always remember the saying that says that “what it calls poor.”

13. Quality inputs

If we sell quality products, our raw materials must also be of good quality.

We always use fresh products, which in some foods such as fish should be purchased the same day that will be used.

We must also select either our suppliers. For restaurants, it is advisable to have several of them, that because some providers do not always count on fresh products.

14. While budget

In the case of restaurants, there are usually many hidden costs, causing it to start the investment is common that end I missing money.

As our budget to make investment, we must take our time and count our costs well and, if possible, try to book a small budget that it will help us if we end missing more investment.

15. Hygiene

Another key factor in the success of a restaurant is hygiene.

Maybe our restaurant is small and we do not have much decor, but offer a good product, good service and, above all, show a total hygiene, it is likely that the restaurant is successful.

Hygiene must be based on an obsessive quest, it must be present in the dining room floor, in bathrooms, in the cooked, the staff (do not forget the hair short or tied) in the uniform of the staff (not forget the beanie chef, etc.).

16. Select either the cook

Another important decision in building a restaurant is the selection of the chef, who not only must have a good flavor, but must be flexible enough to adjust the menu style you want to give to our restaurant.

If the cook says he has worked in fancy restaurants, and is not willing to change its flavor or style to match that we want to give our menu, then we must look for another cook.

17. Well defined functions

For our restaurant operate efficiently; we must clearly define in advance what the roles and responsibilities of our staff.

Some of the functions and responsibilities of a cook, be liable for any loss or damage to equipment, do not let in anyone other than the kitchen, make a list of formal inputs, etc.

Some features of the kitchen staff (kitchen help, cleaning): assist in the decoration of dishes, cleaning and maintenance, inventory daily, etc..

18. Create expectations

A good marketing strategy to start a restaurant, you create anticipation before opening, this can include designing posters, ads, or flyers in which he announced the early opening of the restaurant.

Or it may be to send invitations to friends and acquaintances for opening day.

This will create anticipation for the time to try a new restaurant.

19. Customer service

Customer service is another factor that will determine the success of a restaurant.

We train all our staff to offer a friendly, helpful and caring show, be quick on care, maintaining good personal hygiene and presentation, show a sincere smile, greet politely, saying “please” and “thank you”, etc . . . .

20. Patience and dedication

Assembling and managing a restaurant is not a simple task, it is estimated that approximately one third of new restaurants go bankrupt or closed.

It is also estimated that in the case of restaurants are just now beginning to profit from the sixth month.

Added to this, we must take into account the work in a restaurant started in the early hours of the morning, where they must buy the supplies, then continues with the preparation of the dishes, and preparing for lunch, then continues with the cleaning and preparation for lunch time or dinner, and ends late at night, cleaning and having to get everything ready for the next day.

And we must also take into account that a restaurant does not just work all day, but every day (including Saturday and Sunday), and in many cases, including holidays.

As we see, create and manage a restaurant is not an easy task, but if we are passionate about good food, and service to the people, then we should not hesitate to open one.

But yes, we must realize that to succeed we will need much patience and perseverance (to overcome problems or difficulties that may happen), and hard work, discipline and dedication (to overcome all the work involved in running a restaurant.)

Saving in terms of personal finances is the act of reserving or saving some of our money for future use, either for use in an emergency, to give us some pleasure, to invest, for use in times of crisis, to use in our retirement, etc.

Here we present a compilation of the top 5 tips on saving money:

1. Spend less

This advice seems obvious, but in reality is the first tip to consider if you really want to save money.

It means being aware how we spend our money, and always looking for ways to spend less or, in any case, stop spending money on some things.

One method that can help us to implement this advice, is to develop a personal or family budget, allowing us to know what the parts in which we spend more, and discuss whether we can spend less on them or, in any case, them out of our budget.

We could be spending a lot, for example, subscriptions to newspapers or magazines that do not always read, always buy in cafes, cigar harm our health, we can get books delivered in the library, etc.

Find ways to spend less may also involve: purchase some used instead of new, eating at home instead of eating out, always look for offers or discounts (always ensuring that the offer or discount to be real), take our time and look always places where you can buy the products at the lowest price (for it can, for example, compare prices online), buy wholesale or in quantity (and thus take advantage of quantity discounts, etc.).

Once we are aware what we are spending our money, and we are constantly looking for ways to spend less, we will become experts, and actually begin to save money.

2. Consume or use less

This council is a variation of the first, is to eat less or use the products or services that we use, for example, we try to use less shampoo, toothpaste use less, use less detergent, use less electricity or energy (e.g. off we do not need lights, buying energy saving light bulbs, turning off the television or computer when you’re not using), consume less water (for example, arranging the droppers, showering instead of bathing, etc.).

Consume or use anything less might not mean much as savings, but if we add all the little savings we can do to use this board, we could actually get to save money.

3. Making a budget

An effective way to save money is by creating a personal budget, which is a document where we note for future income and expenses that we will have in the month, and the difference between them.

The family budget will allow us to identify areas or items where we are spending too much, or those in which we could reduce costs or, in any case, removed from our budget.

Also, we will know the difference between revenues and expenditures, and thereby to determine an amount that we can set aside as savings.

4. Book an amount as savings

Is to acquire the habit of putting aside each month or a certain amount of our revenue product in a stock savings.

We can begin to allocate a small amount, and gradually increase the quantity as our revenues increase.

For this we use our family budget, which can help us determine what would be the amount that could be used as savings. It is recommended that represents at least 10% of our total monthly income.

It is advisable to deposit that amount in a savings account at the bank, so we have it in a safe place, we do not feel tempted to take money out of it and, incidentally, we can gain some interest.

To use this advice must be disciplined and always reserve that amount, no matter what happens. Acquiring this habit and see how our savings are increasing, will motivate us to save more, and to seek new revenues that allow us to increase the amount of the amount allocated as savings.

5. Avoid debt

Some debts could be helpful as a mortgage debt, or debt needed to build a business, but to save money, we always strive to have as little debt as possible. We seek to purchase after obtaining the money, not buy and then get it.

The first debt to be avoided is generated by the use of credit cards, usually higher-cost debt that has (the one with higher interest rates). We should note that credit cards are to be used in an emergency or to any opportunity that presents itself, and not to be used constantly in everyday purchases.

The use of credit cards may give momentary satisfaction, but then can bring big problems. It is advisable to cut off all credit cards, or at least keep only one, which present the lowest cost and most convenient payment terms.

So the first step in using this tip is to try to settle all our debts as soon as possible and then try to always buy in cash, except for some occasions, for example, when buying a good investment.

Let us see what the three biggest myths about business are.

The current situation does not allow business

It is usually blaming the economic situation, the government, society, the impossibility of creating business.

But the truth is that there are always possibilities of creating a business.

Some economic and social conditions can be detrimental to the creation of certain types of businesses, but on the other hand, facilitate the creation of others.

For example, if the economic situation is not good, low cost advantage, we may acquire investments, or we invest in our promotion and publicity, and take advantage of other businesses or companies are not spending it.

If in our country are created by treaties that allow the introduction of low-cost products that compete with us, can be an opportunity to create quality products, increase the price, and look for markets with higher purchasing power.

The use is safe, no business

Many people look for a job that guarantees them a fixed salary and benefits involved.

Looking for the supposed security and economic stability that gives them having a job, and consider starting a business is risky.

But the truth is that it may create business incurs risk, but having one employee, today, due to the precarious state of pension systems and the high rate of layoffs, eventually, employment appears to have a be even more risky than having your own business.

To do business, you need a good capital

Another myth about business is that to create or start one, you need to have a good capital or investment.

But the truth is that many large companies started as small businesses.

If we do not have enough capital or investment, we can be creative in finding ways to create a business with little money.

Or, in any case we can always have the possibility to find some funding for the creation of our business.

Avoid unnecessary debt, especially debt that has great interest, such as credit cards. Pay off all debt as quickly as possible, even if it means taking an extra mortgage to do so. If you are saving, then make sure you know what you are saving for.

A car will always depreciate very fast, and the holidays are a very fast way to burn savings.

If you are saving a portion of their money as 10%, then make sure you stick to it. If you are budget, then make sure you stick to it too. It is very easy to do after a while it just habit becomes.

If you’re looking to build a stock portfolio that you should really learn about investing in stocks in the first place. Not a good idea to leave it to a stockbroker, they do not care about your money as much as you, and they work on commission. Choose a few companies you think are really a good investment. Do some research on companies and find out what products they offer. Choosing a company has a product just because you love can be an investment strategy. Alternatively, firms choose which you think has a great future potential and other reasons as well.

If you want to invest in property, and then make any statement you need to get a decent debt in the form of a mortgage. This debt is much safer because it is secured by property that is bringing income to cover interest on the mortgage.

It’s because real estate is as safe banks will lend you money against it. This creates leverage in their investment. Banks will not lend you money to invest in stocks.

Real estate is the preferred choice of investment for many people who know little about investing. If you do not have time to learn to invest in stocks, then this should be your choice of where to allocate your savings.