Finance Coach - Vol. 14

Finance tip: Extra income

Baby-sitting. Offer your baby-sitting services to friends, family and colleagues to earn some extra money in the evenings or over weekends. There are plenty of parents out there who are working night shifts or second jobs in the evenings, who need peace of mind about their little ones. Most people have some form of experience with looking after small children (whether their own children or small siblings), so translate this experience into earning potential. You can choose to do it every now and again for a little extra here and there, or take it more seriously and perhaps set up an evening child-care service at your home. The beauty of having more than one child to look after is that your earnings can multiply substantially, with only a small amount of extra effort. And if you’re any good, word of mouth spreads faster in the child-care industry than almost any other, so prepare to become popular!

Business tip: Innovation

Read anything and everything. Whether you’re looking for an industry to get into, an idea to expand your product range, or just a spark to rejuvenate your business, read whatever you can get your hands on. Personally, I read newspapers, men’s magazines, women’s magazines, business magazines, billboards, pamphlets, wall-posters, anything! You never know where your next idea or inspiration will come from, so be open to anything. And always remember to read between the lines, and make the leap to the next logical step. Say, for example, you read an article about how many mothers are being forced back into the workplace to make ends meet. More mothers at work = fewer mothers at home = children still need to be cared for = start a babysitting service! This is reducing the entrepreneurial thought process to its barest, but the point is that there is generally always something behind what you are reading at face value – dig deeper and find out what it is.

Finance Coach - Vol. 13

Here's your Thursday edition (running two days late, oops)...

Finance tip: Holidays

Stay with family and friends. If you're looking at going on holiday, but the costs seem prohibitive, consider staying with family and/or friends, even if only on some nights. It can reduce your overall bill by a massive chunk. Recently, I went to Ireland with my girlfriend, and the fact that we were able to stay with her family reduced the total cost by close to 50 percent! Alternatively, if you don't have family in the area, consider couch-surfing. This is a new way to travel where you simply crash on someone's couch, generally for free. Networks are springing up worldwide (check out www.couchsurfing.com)

Business tip: Relationships

Vet your customers and suppliers. If at all possible, try to get to know a new customer/supplier before taking them on, especially if they are going to be a major part of your business. Read their marketing material, speak to staff members, ask their management about their goals and aims. Get to know them both in and out of their own environments. Are they easily flustered? Are they organised? Do their staff work well as a team? How long have their employees worked for them? Are they regarded as good payers? Are they willing to go the extra mile to accommodate you? You'd be amazed how much you can learn about a company just by sitting in reception on an unannounced visit!

Finance Coach - Vol. 12

Hi everyone,

I’m back from my holiday in Asia (absolutely amazing!), so here’s your Monday edition of Finance Coach…

Finance tip: Electricity

Check your freezer. If your freezer is only half-full, fill empty milk bottles (plastic ones) with water, and place them in the gaps. Once these freeze, they will help keep the temperature down, and your freezer won’t have to work as hard to maintain its desired temperature – saving you electricity, and lightening the load on your wallet. Also check the seals on the edges of the door – worn ones will mean that coolness escapes, and the unit will have to use more energy to keep your supplies frozen.

Business tip: Management

Delegate your weaknesses. As a business owner or manager, it can be very easy to fall into the trap of trying to do everything yourself, and micro-manage others. Get past this by identifying your strengths and weaknesses, and then delegating your weaknesses. If, for example, you are a whiz at marketing and bringing in new business, but the thought of doing your month-end accounting scares you to death, delegate the bulk of the accounting to a partner or employee, or consider outsourcing it to a professional. Your initial reaction might that this means giving up control, or costs money, but the increased benefits of being able to focus your time, effort and attention on your strengths could well outweigh the costs. If the work is delegated to an employee, it also serves as a sign of trust and encouragement, and could be the spur that pushes them to operating at their full potential.

I'm taking a little time off...

This is just a short note to all of my readers: I am going to be on leave from Friday 27 March 09 to Monday 13 April, and will probably not be blogging much between those dates. I've been pulling 14 hour days at work this week - hence the low number of posts of late (sorry!).

To fill you in, I'm going on holiday to Asia! Hitting Singapore, Hong Kong, Macao and Bali (yes, I know, life can be hard) and looking forward to every minute of it. As I don't have too long in any one spot, it might prove difficult to find the time to sit down and write a decent blog post. I will be taking in absolutely everything I see, so look forward to some good insights and observations from the Far East when I get back!

Until then...

Finance Coach - Vol. 11

Finance tip: Utilities

Manage your air conditioner usage. Having been through an extremely hot patch of weather recently, I was reminded how many people rely on air conditioning to keep their homes and offices bearable. Air-cons are one of the biggest users of electricity, and can make a huge impact on your energy bills. To keep your costs down, make sure that the air-con unit doesn’t have to work harder than it needs to. If you have the unit on, keep windows closed (otherwise the air-con has to work harder to maintain a constant temperature in a fluctuating environment). Also be aware of doors being left open unnecessarily, as the cooled air can escape (and hot air enter) if they are left even slightly ajar. Also ask yourself whether you really need it set to freezing, or whether a slightly cooler temperature will suffice – the cooler the temperature it’s set to maintain, the more energy the unit uses.

Business tip: Organisational dynamics

Office planning. If you hold a management or executive position, and work in an environment where you have your own office, the way you utilise your office space can impact on your effectiveness. Firstly, have your door open as much as possible. This promotes an improved flow of communication and will improve the relationship you have with your staff as, even if they don’t make use of the opportunity, they will feel that you are more approachable, and will feel more at ease about coming to you with new ideas. Secondly, if you are having a meeting where you need the upper hand (for example, where negotiating with a supplier to reduce their prices), make sure that the other person will be sitting with their back to the door. The person facing the door has the stronger position in the room as, psychologically, the one with their back to the door will feel more exposed, and this will weaken their resolve.

Some do benefit from a property crunch...

As I'm sure you're all aware (unless you've been living under a rock somewhere) the world is going through a massive financial crisis. One of the major areas where this is playing out is in the property market. Over the last 12-18 months, there's been a significant drop-off in property values around the globe, and the ramifications have been widespread...

The reasons for the property-price tumble are many. One of the primary drivers has been the global credit crunch, where banks are lending less and less, and it becomes harder to get a mortgage. As fewer people get mortgages, the buyers pool for properties gets shallower. With less demand, prices of properties come down, as sellers have to drop their asking price to attract a buyer. Then there is also the argument that prices were rising at an unsustainable rate, and were due for a reality check (or a 'correction', as the experts say).

The negative repercussions have been thick on the ground: People have realised that property values don't necessarily climb automatically; some have lost their homes as banks have called in sub-prime mortgages; older people, who may have had much of their wealth tied up in their home, have taken a knock to the value of their biggest 'investment'; people who bought at the top of the boom now have a property worth substantialy less than what they owe on it, and are factually bankrupt, etc. etc.

But there is always a positive side to any downturn or bad news. I, for one, have been watching the cost of a home accelerate away from me in the last few years, and have felt sick to my stomach when calculating what it would cost me to get an average starter-home. Apparently, 10-20 years ago, the average person bought their first home at 24/25, whereas the equivalent age today is in the early 30's! Now, I am fortunate in that I am well ahead of the curve in terms of what someone my age (25) earns, and I'll probably be able to purchase a house in the next 2-3 years, but the way that prices were going, I was going to have to settle for 'student' accommodation on an 'executive' income. With prices coming off their highs, I may well now be able to get something something more along the lines of what I had in mind. And I know that many of my peers and friends feel the same way - it at least gives us a look in...

And while estate agents and developers are getting kicked in the nads, there are other businesses that are booming. Going for a run around my neighbourhood the other day (I hadn't done so for a good while), I couldn't help but realise that nearly every second house had done alterations! When you think about it, it makes perfect sense: People haven't been able to buy their dream house (because they couldn't sell their current one, or couldn't get a loan for the one they want), so they've had to do the next-best thing and upgrade what they have. This would mean that the associated industries - such as DIY stores, building supply warehouses, contractors, etc. - would all be noticing a nice uptick in business (or at least keeping the business ticking over while everyone around them is going bust). I noticed in the newspaper the other day that Massmart (the owners of Builder's Warehouse - a local building supply warehouse franchise) came out with relatively strong results, at a time when everyone's competing to report the biggest loss. Maybe companies like these could be a reasonably safe bet for investing, while everything else is tanking?

Oh, and if you have been living under a rock somewhere, don't feel bad - it probably hasn't lost as much value as a real house...

Making money on the Web...

In a day and age when everyone could use a little extra coming in, I thought I’d share some of the research I’ve done into making money on the Web. There are obviously thousands of different ways of making money using the Internet but, for simplicity’s sake, I’m going to split them into two main streams, and then focus primarily on the one.

The first type of money-making avenue would be having an e-commerce site of some sort. This is where you offer a product or service, and you use the Web as a sales channel. Here, your customers would find your site, use it to make their selections and purchases, and often process their payment as well, all in one. This could be an extension of a business that has a physical presence in one or more countries (think of an online shopping site for your local supermarket); or it could be a stand-alone business, based solely on the Web (think Amazon or Yahoo!). I would refer to these as ‘active’ Web businesses – where the revenue is generated from the sales process, and is actively worked for.

The second type of income stream would be more of a ‘passive’ Web business – where income comes in, even without physical sales being processed or services rendered. This is the type that I’d like to focus on in this blog post. One of the most common (and easiest) ways to generate an income in this manner is through advertising on your site or blog. In my mind, the easiest program to use to do this is Google Adsense. Basically, what happens is that you would sign up with Google to have ads placed on your site (you get to choose what types, how many, where they’re placed, etc.) and they would provide you with the HTML code to embed into your pages. These ads will then come up and show on your site when others are accessing it. If a reader or customer clicks on one of these ads, you can then be paid for it. How much you are paid depends on how much the advertiser paid for the click, and sometimes whether the person who clicks through takes another step (such as signs up as a user, buys a product, etc.) Generally, you would make a few US cents per click, but this can add up if you have enough traffic on your site, clicking on ads.

You’ll notice that I have a few such ads floating around on this blog. To be completely honest, the reason for me starting a blog was two-fold. First and foremost, it was to give me a channel to share some of the hundreds of thoughts flowing through my mind at any one point in time, and to share some of what I have been fortunate enough to learn in my life so far. The second aim, tied to the first, was to try and generate an income stream from the Web. I thought that, if I can make the content of my site interesting enough so that it appeals to a wide audience, I could leverage off of that audience and make a little bit of extra cash. Hence the ads around the site. If I write an interesting post that attracts you to read it, and you then click on an ad, I should (in theory) make a little bit off of that.

To date, it has been a mild success. I have made a little bit of change here and there, but I’ll be the first to admit that I have not been the most dedictated of writers – I have tried to put up at least a couple of posts a week, but if I was seriously serious about building an audience, I should be posting nearly every day. Having spoken to some very experienced bloggers (notably Chris Mills of Imod – www.imod.co.za), they have all said the same thing: If you want to grow a successful blog, it’s all about content, content, content! Make sure that you always have something fresh and new on you site, and your readers will respond with their loyalty. Now I realise that it’s not completely ‘passive’ – if you don’t write anything, you have no readers, and thus no income from ads – but I hope you understand what I’m getting at.

What I can say is that I’ve realised that certain types of blog-posts definitely have a broader appeal. I’ve generally had people clicking on and reading every post that I’ve put up, but I had a tremendous response on the last one (“How to draw up a budget”). Nearly 5 times as many people clicked on it compared to the next most popular! Thus, as a blogger, you have to walk the fine line between posting what you want to write, and what people want to read. It’s not easy, and the Web is littered with stories of blogs that just never took off…

So, I’ve decided to re-frame my approach to this whole blogging thing. I’m going to make an effort to put up at least two to three posts a week (and keep them interesting, not just doing them for the sake of doing them). I’ve also added another weapon to my arsenal. You’ll notice that there is now a Google search-function at the top of the page. This is another product of the Adsense program, and acts as a conduit for readers to be able to access the full power of Google search without leaving the page. If one of you performs a search using the strip above, and clicks on a link in the search results page, I should – in theory – get paid (I think if the link had originally been paid for). It’s only been up for a day or two, so I’ll see how it goes!

Now, this has been an extremely simplistic summary of the way I see it. I am definitely no IT-whiz, and am ready to stand corrected on anything I’ve mentioned here. But, if I can do it, anyone can!