Blog – Page 6 – Korsell Corporate Consult

TURNING YOUR BUSINESS IDEA INTO A MILLION DOLLAR STARTUP

August 16, 2019 (updated August 16, 2019) Published by kccadmin

For entrepreneurs, it is often easier to come up with a variety of ideas for new businesses and more difficult to actually implement those concepts. A business concept is a bridge between an idea and a business plan. It focuses one’s thinking so that the entrepreneur can identify the specifics of his or her proposed venture. Converting an idea into a business concept requires thinking about how the product or service will be sold and who will buy it, the benefits of the product or service, how it is differentiated from similar ones, and methods of delivery. There are no clear recipes for starting a new business, but here are a few guidelines that can help you get going in the right direction;

Look for windows of opportunities; Smart observation is your best ally when looking for unique ideas. Start by assessing exactly what you do well. It’s a much safer bet to venture into familiar territory where you can use your existing strengths. Do what you’re passionate about. Enthusiasm ignites the interest of lenders. Choose ideas that enable you to act now. You need to move swiftly before your idea fizzles. Be specific about your business goals, Look around you for windows of opportunity such as taking over a family business, Start a business doing something that your existing company isn’t doing, Keep your eye on the franchise market and Read business publications and stay informed of growth areas.

Find your market niche; the potential success of a product or service involves a myriad of factors, including the design, features, potential profit margin and sales volume projections. Apart from patenting inventions, you can assess these possibilities for product development.Present your idea with a strong business plan.Take your creative thinking and put it on paper. A business plan is your tool to sell your idea to lenders, investors and existing shareholders. Lack of clarity, poor information, and the absence of a strategic orientation are the main deficiencies in most business plans. Make sure you allow time to put a plan together with all the appropriate details, such as positioning, market analysis and financials. Projects developed with the help of an expert in the target market get the best reception.

Get yourself a mentor; getting a business off the ground is not an easy task. Many projects never amount to much because they are not taken seriously, or because they lack adequate follow-up or support. You will increase your chances of success considerably by seeking advice from someone with business experience, often called a mentor. These business leaders provide management advice, suggest sources of financing, and and offer opportunities to hone leadership qualities in the field.

At Korsell Corporate Consult, we help Entrepreneurs transform their business ideas into a million dollar startup. We can help you with your business strategy documents, business models, business diagnosis and other custom services. Call: 055 391 9618 or Email: in**@*********************lt.com

STRUCTURING A CONDUCIVE CORPORATE CULTURE

August 14, 2019 (updated August 14, 2019) Published by kccadmin

Most Entrepreneurs are so consumed with getting all the tangible aspects of their products and services just right, other than dealing with the intangible like creating a company culture. At the outset of most new business ventures, the principle actors are usually a small nucleus of collaborating individuals who fill multiple roles. The company culture, out of sheer necessity, becomes a product of their individual drive, ambition and personality. But as the organization grows, and decisions become less centralized, creating a set of core values and ideas that represent a strong and clear culture can give everyone within the company a sense of belonging work.It is important to install values and earlier on so as the business grows, these ingrained standards remain consistent with the goals and objectives of the organization strategy.

An organization’s culture is determined mostly by how leaders act, so formulating a leadership team that embodies the beliefs and attributes that are representatives of the company, its mission and its brand’s reputation is essential to developing a company culture. Team members should embody the company’s values and be empowered and enthusiastic about spreading the mission. Look for employees that have good balance of technical capabilities and leadership skills, those that can build great relationships as well as brainstorm and innovate with colleagues. Conducive Corporate Culture improves the performance of a business in a number of areas;

To begin with, productivity as an importance help improves morale of workers in a company with healthy conducive corporate culture increases productivity. When workers increase productivity, the financial health of the organization improves, and profits increases. Increase in productivity is a measure that illustrates efficiencies and effectiveness in the company. Secondly quality healthy conducive corporate culture encourages workers to deliver quality products and services. Companies with cultures valuing the highest standards create an atmosphere for workers to deliver products and services that meet those high standards. The culture standards for excellence are an important factor for creating a product or service with a reputation of high quality.Reputation helps companies with healthy corporate culture gain a positive repute among potential workers, which may attract talented and skilled workers to the organization. In addition to attracting to attracting high quality workers, a well- regarded business reputation put companies at an advantage in the financial market. Customers may prefer to conduct business with a business with a solid corporate reputation as well.Employee Retention; in a company that values workers for their contribution to the business, employees experience high morale and positive attitude towards the organization. Workers with a positive attitude are loyal to the organization which reduces employee turnover. Worker turnover has a high cost for recruitment, hiring and training. A healthy corporate culture can help a company retain valuable employees and reduce human resources cost.

In a nut shell, a strong corporate culture is integral to long – term organization sustainability and success; a primary responsibly of management is to both define and communicate this sense of shared organizational culture.

Diversification

December 12, 2018 (updated December 12, 2018) Published by kccadmin

What Diversification Is

It is rare to find rational investors concentrating their entire wealth in a single security or investment. Instead, they tend to invest in a diversified portfolio of securities. The reason is that pooling imperfectly correlated stocks together helps to diversify away diversifiable (unique or non-systematic) risks. It has been found that risk of a portfolio is less than the sum of the risks of the individual stocks within the portfolio.

When security returns have perfect positive correlation, the returns of the securities in the portfolio move in the same direction. Therefore, it is not possible to reduce risk without sacrificing some returns. When securities returns have perfect negative correlation, returns always move in different directions. Therefore, the portfolio may contain too risky stocks, but the portfolio may not be risky at all. This is because a fall in the return of one stock will be compensated for by a rise in the return of the other. The more negative the correlation, the higher the possibility of risk reduction.

Diversification is the process of combining securities or investments in a portfolio with the aim of reducing total risks (market risk plus unique risk) without sacrificing portfolio return. It is a form of corporate strategy whereby a company seeks to increase profitability through greater sales volume obtained from new products and/ or new markets.

The Brokerage Business

December 10, 2018 (updated December 10, 2018) Published by kccadmin

INTRODUCTION

Every investor who wishes to transact business in the securities market will need the services of a brokerage firm unless such an investor is a member of an organized exchange or a registered dealer in securities.

TYPES OF BROKERAGE FIRMS

Brokerage firms and dealers insecurities can be classified according to the three broad functions they perform. They function as:

Investment Bankers

Brokerage firms act as investment bankers because they sell securities to the public without using the facilities of an exchange. Investment bankers normally buy new issue from the issuer at an agreed price and hope to resell it at a higher price to the general public. In this capacity, investment bankers are said to underwrite an issue. Sales through an investment banker can take the form of best-efforts or agency agreement. In this case, the investment banker does not underwrite the issue but use his best effort to sell it. Any unsold securities will be returned to the issuer. This best-efforts activity will normally be used in the sale of new and small companies‟ shares that are thought to be highly risky.

As Buyers And Sellers Of Securities On Behalf Of Customers

A brokerage firm functions as a buyer and seller of securities for customers. It is this function that most brokerage firms are known by the investing public and the function with which the individual investor comes in contact with the broker. A broker trading in listed securities is acting as an agent on behalf of a client. Compensation for this service is in the form of commission. It is important that the brokerage firm exercises care and demonstrate a reasonable amount of skill in filling customers orders. The brokerage firm may be liable for any losses that result from its mistake.

The care with which brokerage firm issues orders is determined by what is reasonable practice in the brokerage business. The exercise of broker’s skill requires that instructions are followed and the order placed in the market where the securities are traded fastest possible time. The broker is required to refrain from making secret profits or crossing orders in its office by acting as both dealers and brokers in the same transaction. The brokerage firm cannot act as dealer and broker in the same transaction because there could be a conflict of interest and this could result in the client paying double commission. All Securities listed on an exchange must be traded on the floor of that exchange. They cannot be executed off the floor by the broker except in certain circumstances.

As Principal-Making Markets in Securities

The broker functions as a principal and makes markets in securities. The broker’s main principal activity is to bring sellers and buyers together. Thus, the brokerage firm is a middleman. As a true intermediary, brokers bring sellers and buyers together, thus creating a market. This is generally done through over-the-counter issue, but can also take place in listed securities. If the securities to be traded are not listed on an exchange but traded in over the-counter market, the broker might own the shares himself.He/she will be acting as a principal or dealer in the transaction. Many brokerage firms specialize in making a market in a certain securities. In this case the brokerage firm will sell the security to the customer at the asking price and will not charge a commission for handling the transaction. The brokerage firm makes its fee from the difference between the price it pays for the securities for its own account and the price it sells them to the investor. The difference between the asked and the bid price is called the spread and is the compensation for making a market in that security.

Steps in Investment

December 6, 2018 Published by kccadmin

STEPS IN INVESTMENT

Undertaking an investment is a very important decision in life. Therefore all care must be undertaken to ensure the success of such an investment. There are certain things that need to be considered no mater the type of investment you want to undertake. This may be the difference between a successful investment and a failed investment venture. When undertaking an investment, the following steps need to be followed:

Meeting Investment Prerequisite

Before you undertake any investment, the investor must make sure the basic necessities of life are met. You cannot invest your entire fund and starve to death. The investor must ensure that the basic needs of food, clothing and shelter are provided for him/her and the family before thinking of investing other than that he/she will have to sell the investment to meet these necessities. The investor can establish a savings account from which contingencies can be met. Such account should be readily accessible to avoid financial problems when the need arises. The investor can also ensure against losses such as death through accident, illness or negligence on the part of a third party, disability, loss of property through fire and theft by taking insurance policies

Establishing Investment Goals

For an investor to be successful, he needs to establish specific investment goals and work towards achieving those goals. Without a target, the investor will not have something to work towards achieving. For example, the investor may have the following goals; accumulate 1.2 million Ghana Cedis by the end of ten years time when you go on retirement, accumulate 100 million Ghana Cedis by 2025 to build a house. In setting such targets, the investor must be sure that the target can be met considering his financial status, investments available and the return of such investments. For instance, a worker whose annual income is 2 million Ghana Cedis cannot achieve an investment target of 20 million Ghana Cedis in 5 years when the highest return of all available investments is say 15%. This is because even if he invest all his income he is not likely to get that amount. Therefore when setting investment goals, the investor should be realistic as much as possible looking at his financial standing and the returns of available investments.

Evaluating Investment Vehicles

Once the investor has set a target, he/she must evaluate the available investment vehicles with his financial goals and select which investment vehicles that can help to achieve the set goals. The investor should therefore determine assets/investments that will be eligible. The investor then should assess the expected return over a holding period and risk associated with each investment.

Selecting Suitable Investment

The selection process is very important because it determines a course of action. Whether the investor will be successful in achieving his/her investment goals will depend on the type of investment vehicles that were selected. When selecting an investment, the investor may have to consider not only the return and risk of a particular investment but also other factors such as tax liability and liquidity. For example a student investing to meet next semester‟s school fees should consider liquidity and risk in terms of loss of principal as very important factors.

Constructing a Diversified Portfolio

A portfolio of investment is a collection of investments to meet a set investment goal. The investor will have to combine assets in certain proportion to form a desired investment portfolio. One factor that should be considered in portfolio construction is diversification. Diversification leads to a higher return at a possible minimum risk. The portfolio that gives the possible minimum risk is known as minimum variance portfolio. It is normally good for risk averse investors who want to get a return higher than Treasury bill’s rate. The investor can also use optimization techniques to determine investments that will be suitable for a portfolio mix. This is because certain assets on their own may be risky but when combined with other assets reduce the risk drastically. In constructing a portfolio, the investor will have to consider the co-variance of the assets that form the portfolio because co-variance determines the level of risk of a portfolio.

Managing The Portfolio

Once a portfolio of investment has been formed, the investor must monitor the portfolio to make sure the targeted goals are met. The investor has to measure the actual returns of the portfolio in relation to expected performance. If there is deviation from the set target, the investor will need to take corrective measures. This may include selling certain investments and using the proceeds to acquire another investment or changing the portfolio mix. In certain situations, it may mean selling the entire portfolio and investing in a new set of assets altogether.

Functions of the Securities Market: To Investors

November 19, 2018 (updated November 19, 2018) Published by kccadmin

FUNCTIONS OF THE SECURITIES MARKETS

The securities markets perform very important functions that benefit the economy, the corporations and the individual investors

To The Investor These Are Some Of The Benefits:

a) It enables investors to spread their risk through diversification. The existing of a stock market makes it possible for an investor to spread and diversify his/her risk by holding a well-diversified portfolio.

b) It provides a liquid investment opportunity. Liquidity is very important to every investor. This is because every investor wants to convert his/her investment quickly into cash when the need arises. The existing of stock market makes it possible because any investor with a security that is traded on the security market can easily dispose of such asset when the need arises without having to lose large part of the principal investment or having to incur high commission.

To The Corporation And Other Investment Seekers, The Benefits Are:

a) Securities market (stock exchange) makes access to investment capital possible. Firms in need of investment capital can raise it through the exchange.

b) It provides opportunity for fast growing and young companies to obtain finance. Such companies can raise capital through the issue of shares (initial public offer).

c) It creates an opportunity for corporations to become known to national and international investors. Ashanti Goldfields Company (AGC) is listed on the New York Stock Exchange. This has made it an international firm making it possible for people who do not know Ghana to know and invest in AGC.

Other Functions Of The Stock Market Are:

a) It provides continuous market for the purchase and sale of securities.

b) It provides a mechanism for determining a fair market price for securities traded on the exchange.

c) It imposes some standardization regarding the release of financial information by companies whose securities are traded on the exchange. For example, all listed companies are supposed to publish their audited final accounts each year.

d) It attempts to protect investors who maintain account at member brokerage firms. It does this by regulating trading practices and imposing financial standards upon member firms.

Functions of the Securities Market

November 15, 2018 (updated November 15, 2018) Published by kccadmin

FUNCTIONS OF THE SECURITIES MARKETS

The securities markets perform very important functions that benefit the economy, the corporations and the individual investors.

Gains Of The Securities Markets To The Economy

It improves utilization of existing domestic savings and encouraging new savings. The existing of the securities market for example the Stock Exchange makes it possible for people to invest their savings.
It helps to channel these savings to where they are needed most. The stock market makes it possible for firms performing well to attract more investors. The prices of stock of such firms go up. Investors sell the stock of firms that are not doing well and buy the shares of companies doing well. By so doing, funds are transferred to where they are most needed, that is to firms that need the funds to make good use of these funds.
It also attracts foreign investors through portfolio investment. The Ghana Stock Exchange is open to foreign investors. Therefore, foreigner with surplus funds can invest in Ghana through the exchange. Without it such investment would not be possible.
It assists in the privatization process. The Ghana Stock Exchange made the divestiture process that the government of Ghana embarked upon in the 1990’s possible. The government was able to sell its stocks in the divested companies through the exchange. This made the divestiture process easy and made shares more accessible to the public.

Primary Market vs Secondary Market

November 14, 2018 Published by kccadmin

PRIMARY MARKETS
Companies can raise external funds through borrowing or issue of shares. If securities are issued they are sold in the Primary Market. The Primary Market is purposely for trading of new securities (IPOs) never before issued. That is to say, securities available for the first time are offered through the Primary Market. The principal function of the Primary market is to raise financial capital to support new investments in building, equipment and
inventory.

Though companies can sell directly to the general public, they usually use underwriters (investment bankers) who handle the details of the new issue and sale to the investor. Underwriters normally buy the new issue at an agreed price from the issuer and sell it at a higher price to the public. Sale through the investment bankers (underwriters) can take the form of “best efforts” or agency agreement. Under such agreement, the investment banker does not buy the new issue but uses his best effort to sell it. Any unsold securities are returned to the issuer.

SECONDARY MARKETS
Once an investor purchases new issues, they change hands in the Secondary Market. Secondary markets are for existing securities that are currently traded between investors. These markets create price and allow for liquidity. If secondary markets did not exist, investors will have no place to sell their investment. Without liquidity many investors will not invest all. Thus, the chief function of the secondary markets is to provide an avenue for converting financial instruments into ready cash (liquid asset). Volumes of trading in securities take place in the secondary market than the primary market. However, the secondary market does not support new investment. Broadly, there are two types of secondary markets namely organized exchanges (stock exchange) and over the counter (OTC) markets.

Money Market vs Capital Market

November 13, 2018 Published by kccadmin

TYPES OF THE SECURITIES MARKET

MONEY MARKET
The money market is designed for the provision of short-term funds. It is an institution through which corporations and individuals with funds meet the needs of borrowers with temporary shortage of funds. A security or loan
maturing within one year or less is considered as a money market instrument. One major function of the money market is to finance the working capital needs of corporations and provide the government with short-term fund. The money market also supplies funds for speculative buying of securities and commodities.

CAPITAL MARKET
Capital markets are designed to finance long-term investment by government, corporations and households. Securities traded in the capital market take more than one year to mature and range in size from small loans to multi-million credits. For instance, if the government wants to undertake road construction, it will have to go for a long-term loan. A company that wants to embark on an expansion of its factory will also need to finance such an activity through a long-term source of fund such as issue of stocks or contracting long-term loan through the capital market.

The Securities Market: Introduction

November 12, 2018 Published by kccadmin

THE SECURITIES MARKET

Introduction
Companies, government and international organizations issue securities. Such securities are issued to raise funds for the activities of the issuer. When securities are issued they have to be traded. It is an advantage to have an organization that brings into contact potential buyers and potential sellers of securities. This organization is called the Stock Exchange.

The Stock Exchange is a place where securities are traded. The Stock Exchange can be a physical place, it can be a system of telephone links, or as is becoming more common it can be a network of computers. The securities market can be divided into different segments based on the characteristics of the securities being traded or the type of transaction that takes place in the market or the needs of investors. For example we have Money Market and Capital Market. The securities market can also be viewed as Primary Market or Secondary market.

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