Biz Plan Hacks

© EG Focus

Former Apprentice winner and London based businessman Tim Campbell has appealed to upcoming entrepreneurs not to depend on the Government to rescue them, but to take their own help. Speaking after being honoured with an MBE for his services to entrepreneurship, at Buckingham Palace, Campbell showed concern over the difficult job market.

His remarks came in the wake of the rise in unemployment as per figures released by the Office for National Statistics. Conceding that the employment market was difficult for everyone, his advice to aspiring entrepreneurs was to be self-reliant. His advice to would be entrepreneurs was that in the current economic situation, there was no option but to help themselves as depending on policy makers would not be a reliable proposition. He emphasized that the situation was even worse for young people who were coloured. A black person below 25years of age had a one in two chance of being jobless as against his white counterpart. Campbell advised young people to look upon role models for inspiration be they sportspersons or entrepreneurs.

Campbell has founded a charitable institution the Bright Ideas Trust for would be young entrepreneurs who were not well off. He has a team of advisors and mentors to guide young people keen to enter the world of business.

© 401K

A lot us remain uneducated about the technicalities involved in taking a loan from a bank. We just assume that there will be someone around who would be well versed with such things- a friend or parents or we might even get professional help. The easier way is simply to educate yourself about the intricacies of a loan. It is not even half as complicated as it sounds and it will end up helping you a lot in your life. After all, you will have to take control of your finances at some point of time in life.

The very basic question about loans is usually related to calculating the interest charged. There are two kinds of interests- simple and compound interest. A simple interest is calculated once on the entire amount that is borrowed. In technical terms, this amount is known as the principal. Compound interest on the other hand is compounded either annually or monthly and the principal mount keeps changing because you pay interest not only on the principal amount that you borrowed but rather on the interest accrued also.

Let's consider an example. If you have borrowed $100 for one year at 10% simple interest then the interest you have to pay is 10% of 100 which is $10. So the total amount that you will pay back will be $110. In the case of compound interest, it gets slightly more complicated as the amount is compounded repeatedly. So taking the same example, you would have to use this formula to calculate your interest. The formula is P (1 + r) ^t, where P stands for principal, r for the rate of interest and t for the time the loan is borrowed for.

Now, let's talk APR or the Annual Percentage Rate which is slightly higher than the interest rate you would calculate using this formula. This is because it includes other miscellaneous fees that are usually included with bank loans. So, your interest rate might ne 10% but the APR will be somewhere around 12-13% because of the additional fees. At times, the APR is not fixed for the entire duration of the loan. It might be fixed for the initial two years in a five year loan and variable in the last three years when it would be subject to changes.

There can be many other technicalities involved depending on the duration and principal of the loan and also the type of the loan. There are many possible variations like discounted loan, instalment loans or loans where the term is less than year. The calculating equation for these loans might be slightly different. Now that you know the tricks of the trade, you will find yourself better equipped to understand the terms and conditions of your loan. In case that you might still feel lost and confused, you can always log onto the internet and you will find many sites with complete APR guides. Do not get intimated by the terminology or the abundance of numbers, once you put your mind to it, you will be able to get a hang of it pretty soon.

© John Hall & Associates

The very reason that detailed business planning sometimes fails is because it is too detailed. If you do not build any flexibility into your business plan, you are asking for trouble. The best business plans take notice of external events, and when the world changes around them the plans must be able to adapt. Of course, the opposite extreme is even worse, which is no plan at all.

Business owners without any plan tend to lurch from crisis to crisis, always breathing a sigh of relief that the last disaster was averted. However, every missed bill, delayed tax return and misuse of credit is adding up, and over time these will weaken a business. There is a way to get the best from a plan without it being overwhelming or non-existent, and that is to focus the plan on the big picture goals, with flexibility on how you achieve them.