"BUSNIESS FINANCE"
Business financing (also referred to as startup financing or franchise financing) refers to the means by which an aspiring or current business owner obtains money to start a new small business, purchase an existing small business or bring money into an existing small business to finance current or future business activity.

There are many ways to finance a new or existing business, each of which features its own benefits and limitations. In the wake of the financial crisis of 2007–08, the availability of traditional types of small business financing dramatically decreased. At the same time, alternative types of small business financing have emerged. In this context, it is instructive to divide the types of small business financing into the two broad categories of traditional and alternative small business financing options.


                                              Small Business Financing Options"
There have traditionally been two options available to aspiring or existing entrepreneurs looking to finance their small business or franchise: borrow funds (debt financing) or sell ownership interests in exchange for capital (equity financing).

Debt Financing
The principal advantages of borrowing funds to finance a new or existing small business are typically that the lender will not have any say in how the business is managed and will not be entitled to any of the profits that the business generates.

The disadvantages are the payments may be especially burdensome for businesses that are new or expanding.
Failure to make required loan payments will risk forfeiture of assets (including possibly personal assets of the business owners) that are pledged as security for the loan.

The credit approval process may result in some aspiring or existing business owners not qualifying for financing or only qualifying for high interest loans or loans that require the pledge of personal assets as collateral.

In addition, the time required to obtain credit approval may be significant.
Excessive debt may overwhelm the business and ultimately risks bankruptcy. For example, a business that carries a heavy debt burden may face an increased risk of failure.

The sources of debt financing may include conventional lenders (banks, credit unions, etc.), friends and family, Small Business Administration (SBA) loans, technology based lenders,microlenders, home equity loans and personal credit cards. Small business owners in the US borrow, on average, $23,000 from friends and family to start their business.

The duration of a business loan is variable and could range from one week to five or more years, and speed of access to funds will depend on the lender's internal processes. Private lenders are swift in turnaround times and can in many cases settle funds on the same day as the application, whereas traditional big banks can take weeks or months.

Equity Financing
The principal practical advantage of selling an ownership interest to finance a new or existing small business is that the business may use the equity investment to run the business rather than making potentially burdensome loan payments. In addition, the business and the business owner(s) will typically not have to repay the investors in the event that the business loses money or ultimately fails.

                               The disadvantages of equity financing include the following:

By selling an ownership interest, the entrepreneur will dilute his or her control of the business.
The investors are entitled to a share of the business profits.

The investors must be informed of significant business events and the entrepreneur must act in the best interests of the investors.

In certain circumstances, equity financing may require compliance with federal and state securities laws.
The sources of equity financing may include friends and family, angel investors, and venture capitalists.

                               "Business Ideas in the Financial Services Industry"

1. Financial analyst service
The demand for financial analysts is on the rise due to the growth of complex financial investments and portfolios. Before now, most companies used to hire in-house analysts. But with most companies now taking every possible step to cut costs, they prefer hiring professionals on contract.

If you have the required background and experience, you can start rendering financial analysis services for business on contract basis.

2. Personal financial advisor
With globally increasing quality of healthcare comes an increase in life expectancy, which means seniors are now forming a significant percentage of the population in most countries. Elderly people want a blissful retirement, so they seek advice from financial advisors on how to manage their finances and plan ahead of their retirement years. Similarly, businesses with financial issues hire financial advisors to help them get back on track.

3. Sales agent
If you pride yourself on the ability to convince anyone to take whatever action you expect of them, then chances are that you will make a successful sales agent. Businesses are always hunting for new customers in order to stay afloat, and they hire professional sales agents for this purpose.

Most businesses now hire sales agents on contract and reward based on performance. If you have what it takes to help businesses get more customers, starting your own sales and marketing agency can be financial rewarding and fulfilling.

4. Microfinance banking
Most banks and other loan-issuing institutions are becoming more and more reluctant to support small businesses—especially startups—with loan packages. They prefer reserving the funds for well-established businesses and brands because those ones will most likely be able to pay back on time.

However, to the rescue of small business owners, microfinance banks are becoming more popular. They issue loans with friendlier interest rates and they don’t discriminate. Starting a microfinance bank requires much less startup capital than a traditional bank does. So, the microfinance banking sub-sector is easy to break into.

5. Asset management
Business within the financial services industry set aside a significant portion of their budget for asset maintenance and management. Since every business has assets to manage and protect, there are huge profit opportunities for asset maintenance experts.

6. Consulting
If you have several years of experience in a particular field, such as marketing, business planning, and so on, you can turn that into a money-spinning business. Business owners, especially those with little experience, are constantly in need of expert advice on various aspects of business. And they are ready to pay for quality advice that will help grow their businesses.

7. Business process outsourcing (BPO)
Due to the sorry state of the economy in many countries, businesses are now cutting payroll costs by turning away from hiring many in-house staff. Rather, they now outsource many tasks to third-party business process outsourcing services. This way, business owners and managers can rest assured that their tasks will be handled professionally while they concentrate on other important aspects of their businesses.

8. Online marketing service
As businesses become more aware of the effectiveness of the internet as a lead generation tool, the demand for online marketing experts is on the high. People now search the internet for products and services they need. And they will most likely patronize businesses will stronger web presence.

Content writers, copywriters, search engine optimization experts, website designers, marketing automation experts, etc; all offer online marketing services.

9. ATM engineering
With ATMs everywhere, the reason why ATM engineers will be in demand is just obvious. ATMs belonging to banks and other financial institutions need servicing and repair at different points in time, leaving huge profit opportunities for experts in ATM installation and repair.

10. Insurance underwriting
Insurance underwriters work for insurance companies by helping them accept or reject risks and decide if insurance cover applications should be accepted or rejected. Insurance underwriting can be done as a freelance business, which means the underwriter can work for multiple insurance companies at the same time. If you have a solid background in insurance, then consider starting your own insurance underwriting agency.



           The Role of Finance in the Strategic-  Planning and Decision-Making Process

1. Vision Statement
The creation of a broad statement about the company’s values, purpose, and future direction is the first step in the strategic-planning process. The vision statement must express the company’s core ideologies—what it stands for and why it exists—and its vision for the future, that is, what it aspires to be, achieve, or create.

2. Mission Statement
An effective mission statement conveys eight key components about the firm: target customers and markets; main products and services; geographic domain; core technologies; commitment to survival, growth, and profitability; philosophy; self-concept; and desired public image. The finance component is represented by the company’s commitment to survival, growth, and profitability. The company’s long-term financial goals represent its commitment to a strategy that is innovative, updated, unique, value-driven, and superior to those of competitors.

3. Analysis
This third step is an analysis of the firm’s business trends, external opportunities, internal resources, and core competencies. For external analysis, firms often utilize Porter’s five forces model of industry competition, which identifies the company’s level of rivalry with existing competitors, the threat of substitute products, the potential for new entrants, the bargaining power of suppliers, and the bargaining power of customers.

For internal analysis, companies can apply the industry evolution model, which identifies takeoff (technology, product quality, and product performance features), rapid growth (driving costs down and pursuing product innovation), early maturity and slowing growth (cost reduction, value services, and aggressive tactics to maintain or gain market share), market saturation (elimination of marginal products and continuous improvement of value-chain activities), and stagnation or decline (redirection to fastest-growing market segments and efforts to be a low-cost industry leader).

Another method, value-chain analysis clarifies a firm’s value-creation process based on its primary and secondary activities. This becomes a more insightful analytical tool when used in conjunction with activity-based costing and benchmarking tools that help the firm determine its major costs, resource strengths, and competencies, as well as identify areas where productivity can be improved and where re-engineering may produce a greater economic impact.

SWOT (strengths, weaknesses, opportunities, and threats) is a classic model of internal and external analysis providing management information to set priorities and fully utilize the firm’s competencies and capabilities to exploit external opportunities, determine the critical weaknesses that need to be corrected, and counter existing threats.

4. Strategy Formulation
To formulate a long-term strategy, Porter’s generic strategies model  is useful as it helps the firm aim for one of the following competitive advantages: a) low-cost leadership (product is a commodity, buyers are price-sensitive, and there are few opportunities for differentiation); b) differentiation (buyers’ needs and preferences are diverse and there are opportunities for product differentiation); c) best-cost provider (buyers expect superior value at a lower price); d) focused low-cost (market niches with specific tastes and needs); or e) focused differentiation (market niches with unique preferences and needs).

5. Strategy Implementation and Management
In the last ten years, the balanced scorecard (BSC) has become one of the most effective management instruments for implementing and monitoring strategy execution as it helps to align strategy with expected performance and it stresses the importance of establishing financial goals for employees, functional areas, and business units. The BSC ensures that the strategy is translated into objectives, operational actions, and financial goals and focuses on four key dimensions: financial factors, employee learning and growth, customer satisfaction, and internal business processes.

6.Sales Forecast
The first month of business will be used to set up the office.  There will be no sales activity during this period of time.  Revenue will begin to occur during the second month, however it will only trickle in until the four month when it will become more steady.  It will not be until the middle of year two when things begin to settle and become more like an established business in terms of dividing time between serving clients and attracting new ones.

Meghan will receive revenue from two sources.  She will charge the client an initial modest fee and this includes all of the needed research, interviews and meetings.  If the client then goes ahead and purchases a mutual fund or equity, Meghan receives a commission from the company that is selling the item.  This compensation structure if fairly standard in the industry.  The initial fee allows the client to receive as much counseling and research that they need and then future transactions are compensated by the company selling the equity, much like the commission structure of travel agents.


Conclusion

The introduction of the balanced scorecard emphasized financial performance as one of the key indicators of a firm’s success and helped to link strategic goals to performance and provide timely, useful information to facilitate strategic and operational control decisions. This has led to the role of finance in the strategic planning process becoming more relevant than ever.

Empirical studies have shown that a vast majority of corporate strategies fail during execution. The above financial metrics help firms implement and monitor their strategies with specific, industry-related, and measurable financial goals, strengthening the organization’s capabilities with hard-to-imitate and non-substitutable competencies. They create sustainable competitive advantages that maximize a firm’s value, the main objective of all stakeholders.