[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text]What is crowdfunding? Crowdfunding is a method of raising capital through the joint effort of friends, family, customers, and individual investors. This approach taps into the collective efforts of a large pool of individuals “primarily online via social media and crowdfunding platforms” and leverages their networks for greater reach and exposure. Overview of crowdfunding Crowdfunding is essentially the opposite of the conventional approach to business finance. Traditionally, if you wished to raise capital to start a business or launch a new product, you would need to pack up your business plan, market research, and prototypes, and then shop your idea around to a limited pool or wealthy individuals or institutions. These funding sources included: Banks Angel investors Venture capital firms This really limited your options to a few key players.  Think of this fundraising approach as a funnel, with you and your pitch at the wide end and your audience of investors at the closed end. Fail to point that funnel at the right investor or firm at the right time, and that’s your time and money lost. Crowdfunding platforms, on the other hand, turns that funnel on-end. By giving you, the entrepreneur, a single platform to build, showcase, and share your pitch resources, this approach dramatically streamlines the traditional model. Traditionally, you’d spend months sifting through your personal network, vetting potential investors, and spending your own time and money to get in front of them. With crowdfunding, it’s much easier for you to get your opportunity in front of more interested parties and give them more ways to help grow your business, from investing thousands in exchange for equity to contributing funds in exchange for a first-run product or other reward. Crowdfunding verses traditional business financing Benefits of Crowdfunding By tapping into a wider investor pool to enjoying more flexible fundraising options, there are a number of benefits to crowdfunding over traditional methods. Here are just a few of the many possible advantages. Presentation – By creating a crowdfunding campaign, you go through the invaluable process of looking at your business from the top level its history, traction, offerings, addressable market, value proposition, and more and boiling it down into a polished, easily digestible package. Reach – By using a crowdfunding platform, you have access to thousands of accredited investors who can see, interact with, and share your fundraising campaign. PR & Marketing – From launch to close, you can share and promote your campaign through social media, email newsletters, and other online marketing tactics. As you and other media outlets cover the progress of your fundraise, you can double down by steering traffic to your website and other company resources. Validation of Concept – Presenting your concept or business to the masses affords an excellent opportunity to validate and refine your offering. As potential investors begin to express interest and ask questions, you’ll quickly see if there’s something missing that would make them more likely to buy in. Efficiency– One of the best things about online crowdfunding is its ability to centralize and streamline your fundraising efforts. By building a single, complete profile to which you can funnel all your prospects and potential investors, you eliminate the need to pursue each of them individually Types of Crowdfunding Just like there are many different kinds of capital round raises for businesses in all stages of growth, there are a variety of crowdfunding types. The crowdfunding method depends on the type of product or service you offer and your goals for growth. The 3 primary types are: Donation-based Reward based Equity crowdfunding Donation-Based Crowdfunding Broadly speaking, you can think of any crowdfunding campaign in which there is no financial return to the investors or contributors as donation-based crowdfunding.  Common donation-based crowdfunding initiatives include: Fundraising for disaster relief Charities Non-profits Medical bills Rewards-Based Crowdfunding Rewards-based crowdfunding involves individuals contributing to your business in exchange for a “reward,” typically a form of the product or service your company offers. Even though this method offers sponsors a reward, it’s still generally considered a subset of donation-based crowdfunding since there is no financial or equity return. Equity-Based Crowdfunding Unlike the donation-based and rewards-based methods, equity-based crowdfunding allows contributors to become part-owners of your company by trading capital for equity shares. As equity owners, your contributors receive a financial return on their investment and ultimately receive a share of the profits in the form of a dividend or distribution. About the Author Thank you for reading this article. The author, James Ndambiri is an avid Business Advisor and Consultant: A Tax Surgeon, Proficient Accountant, Skilled Auditor, a Guru in Financial and Investment management, Expert in Business Strategy Formulation, Business Transformation Wizard, Family Business Advisor, Lecturer, Business Coach and a Family Man. James is the Founder, Team Leader, CEO & Managing Partner of MNC Consulting Group. MNC Consulting Group is your most trusted and respected professional business consulting firm recognized by our clients for delivering excellent business advisory and consulting services that create value to their ventures. With our focus set on value addition, we offer our clients the highest quality professional services in Accounting, Audit and assurance, Tax, Business Transformation, Investments and Financial Advisory, Family Business Advisory, Company Secretarial Services and Property Management that address their business needs through attracting, recruiting and retaining knowledgeable and passionate professionals who enable us to deliver superior results while contributing positively to the community in which we live and work.   Make us your business partner by always consulting with us. ‘‘With us, you are in safe hands”[/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text]What is Capital Gains Tax? Capital Gains Tax is a tax chargeable on the whole of a gain which accrues to a company or an individual on or after 1st January, 2015 on the transfer of property situated in Kenya, whether or not the property was acquired before 1st January, 2015. This tax had been suspended in 1985 but was re-introduced effective 1st January, 2015. What is the rate of tax? The rate of tax is 5% of the net gain. It is a final tax and cannot be offset against other income taxes. What is property? Property is defined in the law (Eighth Schedule to the Income Tax Act). It includes land, buildings and marketable securities. Who is liable to pay the tax? The tax is to be paid by the person (resident or non-resident) transferring the property, that is, the transferor. The transferor can either be an individual or a corporate body. What constitutes a transfer? A transfer takes place: – a) where a property is sold, exchanged, conveyed or disposed of in any manner (including by way of gift); or b) on the occasion of loss, destruction or extinction of property whether or not compensation is received; or c) on the abandonment, surrender, cancellation or forfeiture of, or the expiration of rights to property. How do you determine the net gain? The net gain is the excess of the transfer value over the adjusted cost of the property that has been transferred. It is this excess that is subjected to tax at 5%. The Transfer value of the property is the amount or value of consideration or compensation for transfer of the property less incidental costs on such transfer. The Adjusted cost is the sum of the cost of acquisition or construction of the property; expenditure for enhancement of value and/or preservation of the property; cost of defending title or right over property, if any; and the incidental costs of acquiring the property. The adjusted cost shall be reduced by any amounts that have been previously allowed as deductions under Section 15(2) of the Income Tax Act. How will related party transactions be treated? Two parties are related if: a) Either person participates directly or indirectly in the management control or capital of business of the other; or b) A third person participates directly or indirectly in the management control or capital of business of both. Where there is concern that a related party transaction may have led to reduction in the transfer value with a view to minimizing the capital gains tax, the Commissioner will make necessary adjustments and/or revaluation to determine the market price What is the due date/tax point? It is a transaction-based tax and should therefore be paid upon transfer of property but not later than the 20th day of the month following that in which the transfer was made. How is the tax to be declared? The taxpayer will do a self-assessment to determine the gain upon which tax is computed. The computations are subject to Commissioner’s confirmation of correct gain as the basis of tax computation. Upon transfer of property the transferor shall complete the relevant form (CGT 1) as appropriate and compute and pay the tax thereon. What happens when a loss is made? The loss may be carried forward to be offset/deducted against a gain of a similar nature (that is, a capital gain) at a future date. What documents/information will be required? a) Completed CGT form by the seller b) Copy of Sale/Transfer Agreement of the property c) Proof of the incidental costs related to the acquisition and transfer of the property d) A copy of the title deed or ownership document for the property e) Report from a registered valuer for property transactions between related parties f) Any other document/information that the Commissioner may require Are there any exemptions from capital gains tax? Certain transactions are exempted as follows: a) income that is taxed elsewhere as in the case of property dealers b) issuance by a company of its own shares and debentures c) transfer of machinery including motor vehicles d) disposal of property for purpose of administering the estate of a deceased person e) vesting of property in the hands of a liquidator or receiver f) transfer of individual residence occupied by the transferor for at least three years before the transfer g) compensation by Government for property acquired for infrastructure development h) transfer of asset between spouses as part of divorce settlement i) sale of land by an individual where the proceeds is less than Kshs. 30,000 j) sale of agricultural land by individuals outside gazetted townships where the property is less than 100 acres k) Exchange of property necessitated by : incorporation, recapitalization, acquisition, amalgamation, separation, dissolution or similar restructuring involving one or more companies which is certified by the Cabinet Secretary to have been done in the public interest l) transfer of investment shares by a body exempted under Paragraph 10 of the First Schedule m) transfer of investment shares by retirement benefits scheme registered with Commissioner Treatment of Extractive Industry The net gain on disposal of interest in a person owning immovable property in the mining and petroleum industry is taxable. The applicable rate of tax is as per the Ninth Schedule to the Income Tax Act – 30% for residents and 37.5% for non residents with permanent establishments. The taxable gain is the net gain derived on the disposal of an interest in a person, if the interest derives its value from immovable property in Kenya. Immovable property means a mining right, an interest in a petroleum agreement, mining information or petroleum information.   About the Author Thank you for reading this article. The author, James Ndambiri is an avid Business Advisor and Consultant: A Tax Surgeon, Proficient Accountant, Skilled Auditor, a Guru in Financial and Investment management, Expert in Business Strategy Formulation, Business Transformation Wizard, Family Business Advisor, Lecturer, Business Coach and a Family Man. James is the…

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text]What is a Business Advisory Board (BAB)? A Business Advisory Board is a group of local business and community leaders who are recruited by the owners of the business to serve as mentors. Key role of a Business Advisory Board (BAB) Providing guidance and mentorship Introducing the entrepreneur to other business leaders in the community Suggesting project ideas Providing access to needed resources Funding opportunities Giving feedback on projects and presentation   Difference between Business Advisory Board (BAB) and Board of Directors (BoD)       Size of the BAB An effective BAB should consist of around 5 to 8 members. Greater numbers are acceptable, but a minimum of 6 would be needed to ensure a range of organizations are represented; a range of specific and general management skills are represented; and gender diversity is represented. Factors to consider when determining the size of a BAB Manageability Budget Sustainability Quorum Diversity Responsibility Skills requirement Sector representation of members of the BABs Members of leading businesses, educational and civic organization Members of the organization sponsoring the business/company Members of the Mass Media Institutional administrators Religious organizations Members of various professional bodies Representative from political arena Local managers from national and/or State businesses Managers from local industry associations Skills requirements for BABs BAB members will be most effective if they can bring some or all of the following skills to the team. General management Specific technical skills e.g. marketing, finance, IT, HR etc Project management Mentoring Any specific skills required by projects eg scientific, theatrical, media etc Frequency of meeting of BABs Meetings should be held on a quarterly basis at minimum – anything less and there may not be enough contact between members to ensure the BABs effectiveness. New BABs may wish to hold more frequent meetings at first. BAB members can be invited to participate in other events such as networking socials, presentation practices, and various project-related events.  Subcommittees should meet more frequently. Required level of commitment expected from BAB members BAB members are requested to: Make themselves available for meetings wherever possible. Be willing to provide constructive mentoring, coaching and guidance to teams and individual team members where applicable. Provide feedback to their organization on their activities as a BAB member. Be willing to provide in-kind and/or financial support where possible. Suggest possible projects. Tips to maintain a satisfactory level of commitment from BAB members:  Be clear about expectations right from the onset through the BAB Member Handbook and initial discussions. Hold a begging of the year meeting to review your plans for the new year and introduce new members of the board. Schedule meetings and events as early as possible to increase attendance. It also helps if meetings are scheduled on a certain day, such as the first Thursday of the month. Record action items in the minutes of each meeting and be sure to follow up with those responsible for their completion. Establish a term (between one and three years) for BAB members to serve so they know they have a finite period to provide support and commitment to the team. Ensure open communication with BAB members so that they still feel “in the loop” even if they miss a meeting or an event. Share links to your team website and social media pages. Encourage committee members to take the lead, but make sure their goals are realistic and compatible with your program’s mission. Establish and maintain a structure that works for everyone. Seek out new members and provide a thorough orientation for those who join. Provide regular updates about your program and let members know how their work has helped you progress toward your goals. Ask for opinions or involvement only when it fits with the group’s mission and role as advisors. Thank members regularly in many different ways in person, in handwritten notes, via e-mail, in your newsletter for the work they are doing. Cost of running a BAB The amount of money required is relative and depend with the amount allocated in the budget for the following purpose: Printing (e.g. for invitation packages) Facility rental Refreshments and/or lunch (for meetings or other BAB events) Appreciation gifts (e.g. at Christmas) Sitting allowance (Not Compulsory) Steps for developing an effective BAB Obtain approval from your board of directors or other governing body to establish. Establish the purpose and scope of the group (increase feasibility, offer informed input, keep engaged with the community). Recruit members that fit with the group’s purpose. Build your team and develop structure. Prepare members for their role and the work they will do for your program (orientation, review mission, clarify extent and limit of authority). Empower the group to develop a clear scope of work: Facilitate a conversation about which program areas would benefit from the group’s support, such as volunteer recruitment and training, fundraising, or community awareness. Discuss which of the identified areas need support right now and which could wait or need little support. Have the group establish measurable objectives and specific activities for the areas they identify and a lead person for each area of involvement the committee plans. Best practices for advisory board creation and success Homework: Give the Advisory Board members simple ways to get ready for the meeting: e.g., reading a succinct brief on a problem to be discussed or going into the market to get smart about the context of a category to be presented. Share the questions you plan to ask so advisors have time to think about issues and back up their responses with examples, if possible. Preparation: Executives who manage the Advisory Boards within a company are critical to its success. Preparing the agenda as well as the teams who participate and following up are critical if ideas are to turned into action. Presentations: Presentations should be well edited, free of jargon, concise and designed to stimulate thinking rather than get buy-in. Questions are more important than answers. Participation: When the intention is to spark new thinking that translates…

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text]What is merger and acquisition? Mergers and acquisitions (M&A) is basically consolidation of companies. Differentiating the two terms, Mergers is the combination of two companies to form one, while Acquisitions is one company taken over by the other. The reasoning behind M&A generally given is that two separate companies together create more value compared to being on an individual stand. With the objective of wealth maximization, companies keep evaluating different opportunities through the route of merger or acquisition. Major reasons for mergers and acquisition (M&A)      1.Synergy The most used word in M&A is synergy, which is the idea that by combining business activities, performance will increase and costs will decrease. Essentially, a business will attempt to merge with another business that has complementary strengths and weaknesses.      2. Diversification / Sharpening Business Focus These two conflicting goals have been used to describe thousands of M&A transactions. A company that merges to diversify may acquire another company in a seemingly unrelated industry in order to reduce the impact of a particular industry’s performance on its profitability. Companies seeking to sharpen focus often merge with companies that have deeper market penetration in a key area of operations.    3.Growth Mergers can give the acquiring company an opportunity to grow market share without having to really earn it by doing the work themselves – instead, they buy a competitor’s business for a price. Usually, these are called horizontal mergers. For example, a beer company may choose to buy out a smaller competing brewery, enabling the smaller company to make more beer and sell more to its brand-loyal customers.   4.Increase Supply-Chain Pricing Power By buying out one of its suppliers or one of the distributors, a business can eliminate a level of costs. If a company buys out one of its suppliers, it is able to save on the margins that the supplier was previously adding to its costs; this is known as a vertical merger. If a company buys out a distributor, it may be able to ship its products at a lower cost.   5.Eliminate Competition Many M&A deals allow the acquirer to eliminate future competition and gain a larger market share in its product’s market. The downside of this is that a large premium is usually required to convince the target company’s shareholders to accept the offer. It is not uncommon for the acquiring company’s shareholders to sell their shares and push the price lower in response to the company paying too much for the target company. Mergers & Acquisitions can take place: by purchasing assets by purchasing common shares by exchange of shares for assets by exchanging shares for shares Principle behind any M&A is 2+2=5 There is always synergy value created by the joining or merger of two companies. The synergy value can be seen either through the Revenues (higher revenues), Expenses (lowering of expenses) or the cost of capital (lowering of overall cost of capital). A Successful Merger is a Planned Merger: Ideally, you would start planning as soon as you decide to buy something. If you have no plan for the target company, you are going to pay the wrong price and you are not going to be ready to handle the integration. I would do a couple of days planning right at the start. At latest, I would start building a full integration plan around 100 days before you believe the deal will take place. Careless Acquisitions Causes Reverse Multiple Arbitrage: If you buy a company that doesn’t fit into your strategy, you may suffer from reverse multiple arbitrage since investors will no longer be able to identify your true brand or mission. An M&A is an arranged marriage There is no love at the beginning The issues start Day One Executives announce the once hush-hushed M&A information Employees pretend to be excited as FEAR ripples through both companies The C suite (senior executives) announces: “This will be great for everyone” No one is buying that promise Types of mergers and acquisition There are five commonly-referred to types of business combinations known as mergers: conglomerate merger, horizontal merger, market extension merger, vertical merger and product extension merger. The term chosen to describe the merger depends on the economic function, purpose of the business transaction and relationship between the merging companies.  1.Conglomerate merger A conglomerate merger is a merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.  2.Horizontal Merger A merger occurring between companies in the same industry. Horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry.  3.Product Extension Mergers A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits.  4.Vertical Merger A merger between two companies producing different goods or services for one specific finished product. A vertical merger occurs when two or more firms, operating at different levels within an industry’s supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one. 5. Market Extension Mergers A market extension merger takes place between two companies that deal in the same products but in separate markets. The main purpose of the market extension merger is to make sure that the merging companies…

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text]Business strategy- What is it? What exactly is business strategy? In simple terms, a business strategy is an articulation of the overall direction of the business. Strategies that are identical to those of your competitors can result in the failure of your objectives. Business strategy can also be seen as a decision made at the highest levels of the company on positioning and direction. Such a decision serves to establish a clearly defined framework for subsequent decisions. Accordingly, strategy and decision-making become inseparable; without organizational competence for decision-making, the formulation of a strategy in itself does not have much meaning. Business strategy – Need and purpose The reason why having a strategy is so important is because it gives business time to get a sense of how they are preforming, what their capabilities are, and if these capabilities are able to help them grow. Developing a good business strategy is a thoughtful process. It takes a balanced approach to come up with a strong but flexible business strategy that can absorb change without disintegrating. Just as a good topographical map is indispensable to a hiker outlining explicit geographical hazards, so is a good business strategy to a company. It encompasses information on competitors and technology, suppliers and customers and provides directional guidance. Key principles about business strategy Business strategy compete to be unique, not to be the best Strategy is a pattern in a stream of decisions Business strategy compete for profit as it’s the aim of every business to make profit Know your industry before you develop your strategy Strategy is thinking about a choice and choosing to stick with your thinking The essence of strategy is choosing what not to do A good strategy requires you to keep moving because a good strategy is a sigh of success Key Components of a winning strategy plan Vision The CEO and senior management likely has a focused vision for the current and future of their organizations. It’s imperative that the executives include their shared vision into a successful business strategy. Mission Your mission statement should embody the values of the organization, to which you will always remain true. A good mission statement should include a clear, concise expression of the company’s purpose, philosophy and commitment. Objectives Along with your company’s short- and long-term goals, your objectives should state the specific objectives your business strategy will accomplish as well as a timeline outlining when management believes the company will reach them. In all cases, your company’s objectives should focus on achieving the broader goals as displayed in your mission statement. Strategies This is the how you will achieve your goals and objectives. While strategic planning groups often express different ideas of how to reach the outcomes your strategies target, brainstorming and free discussion typically results in agreement on a business strategy or strategies that should work. Even in smaller organizations, CEOs should try to involve as many people as possible. This is more important than just keeping everyone on the same page. You often learn that staff members have winning ideas that need to be considered. Perhaps more important, though, is that inclusion creates buy-in, and any winning strategy will need engaged employees to be successful. Action Plans Clearly, great vision and mission statements are useless if not acted upon. Action plans are the engines that make strategic plans succeed. Creating detailed action plans that include what is to be done, who is accountable for it, and when it is due, is an ingredient commonly glossed over in strategic planning. Too many organizations create outstanding strategies without attaching specific action plans, and so they gather dust until the next strategic planning meeting. Type of strategy       1.Generic or general strategy Strategy, in general, refers to how a given objective will be achieved. Consequently, strategy in general is concerned with the relationships between ends and means, that is, between the results we seek and the resources at our disposal. Strategy and tactics are both concerned with formulating and then carrying out courses of action intended to attain particular objectives. For the most part, strategy is concerned with deploying the resources at your disposal whereas tactics is concerned with employing them. Together, strategy and tactics bridge the gap between ends and means.   2. Corporate strategy The overall scope and direction of a corporation and the way in which its various business operations work together to achieve particular goals. Corporate strategy defines the markets and the businesses in which a company will operate. It is typically decided in the context of defining the company’s mission and vision, that is, saying what the company does, why it exists, and what it is intended to become.   3. Competitive strategy It’s defined as the long-term plan of a particular company in order to gain competitive advantage over its competitors in the industry. It is aimed at creating defensive position in an industry and generating a superior ROI (Return on Investment). Such type of strategies plays a very important role when industry is very competitive and consumers are provided with almost similar products. Before devising a competitive strategy, one needs to evaluate all strengths, weaknesses, opportunities, threats in the industry and then go ahead which would give one a competitive advantage. Types of competitive strategies a. Cost Leadership Here, the objective of the firm is to become the lowest cost producer in the industry and is achieved by producing in large scale which enables the firm to attain economies of scale. High capacity utilization, good bargaining power, high technology implementation are some of factors necessary to achieve cost leadership. b. Differentiation leadership Under this strategy, firm maintains unique features of its products in the market thus creating a differentiating factor. With this differentiation leadership, firms target to achieve market leadership. Superior brand and quality, major distribution channels, consistent promotional support etc. are the attributes of such products. c. Cost focus Under this strategy, firm concentrates on specific market segments and keeps its products…

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text]What is entrepreneurship? Entrepreneurship is described as the “capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit” The people who engage in the entrepreneurship process are called entrepreneurs. Reasons for engaging in entrepreneurship Control: Entrepreneurs want to be their own boss; Ambition: Entrepreneurs want to start something from scratch and develop it; and Financial: Entrepreneurs see an opportunity to earn more money Requirements of becoming successful in entrepreneurship Strong will, endurance and patience; A business concept or idea involving a product, service, process, or new technology; A business plan that breaks down the idea into processes and phases; People to support the work, whether as employees, vendors, or advisors; A process by which the product or service will be delivered, or the technology will be developed; and Enough money to support the development of the idea to the point that it generates revenue. Factors to consider when deciding the kind of entrepreneurship to venture in In considering what kind of business to start, an entrepreneur needs to assess: Their interests; Their background and experiences; Their financial resources; Unmet market needs; Problems they can solve; and Their network and connections. The benefits of entrepreneurship      1. It gives a great amount of freedom If you start your own business, you will be able to make your own demands and set your own schedule. You dictate everything you do, giving you a level of freedom that is not possible in formal employment.      2. Give rise to self-actualization: You believe in what you do Working in entrepreneurship is inspiring. Instead of being a component in the wheel for a giant, hierarchical corporation, you are able to see your ideas make a difference and contribute to the construction of a brand-new business.       3. It can be exciting Entrepreneurship can be very exciting, with many entrepreneurs considering their ventures highly enjoyable. Every day will be filled with new opportunities to challenge your determination, skills and abilities.     4. It allows you to set your own targets and returns You will be the one setting your own wage and making investments when you own the business. You could end up significantly increasing your income.     5. It offers flexibility. As an entrepreneur, you can schedule your work hours around other commitments, including quality time you would spend with your family and/or friends.       6. Gives a chance to choose your work environment Don’t expect to always be working from inside an office while working for or creating your own start-up. Entrepreneurs and other start-up founders often work from home or while traveling, instead of within an office. This is a great way to be able to experience a change in scenery and break up the monotony of always working in the same space.       7. You get to see your work change the society Part of what an entrepreneur does is solve problems. They make something more efficient, provide a better service or build a new product that helps people in their everyday lives.     8. You become an opinion maker and a business leader Being able to see how your business has contributed to the local economy and provided jobs is incredibly rewarding. Your role as a business leader in your community is important and respectable.   Reason of failure in entrepreneurship The entrepreneur may lack the patience to wait until the business is established The business need to be given adequate time to establish itself and start building profits. Lack of a business plan hence poor planning Without a business plan it is not easy to identify potential problem areas and so chances of failure are higher. Poor financial planning may lead to failure of the business venture If the venture is under-priced, the company will not be able to maintain operational expenses and eventual it fails. If it is over estimated and there is too much money available, chance of misusing it are high. It requires you to dedicate a huge amount of time One big challenge in starting your own business is the amount of time you have to invest in it. For it to be successful, you have to take a level of time commitment that many people are just not willing to make. It can be difficult to compete with other businesses It is very important for an entrepreneur to stay competitive. This means that you have to differentiate your business from others in your niche in order to build a solid customer base and, finally, become profitable. It does not guarantee 100% success Entrepreneurship would make your dreams come true, which does not often happen with traditional employment, but you need to make some sacrifices to make it happen. However, the venture does not guarantee 100% success. It comes with unpredictable work schedules One major drawback of being an entrepreneur is that more work and longer hours will be required from you than being an employee. Some entrepreneurs give up after experiencing this. About the Author Thank you for reading this article. The author, James Ndambiri is an avid Business Advisor and Consultant: A Tax Surgeon, Proficient Accountant, Skilled Auditor, a Guru in Financial and Investment management, Expert in Business Strategy Formulation, Business Transformation Wizard, Family Business Advisor, Lecturer, Business Coach and a Family Man. James is the Founder, Team Leader, CEO & Managing Partner of MNC Consulting Group. MNC Consulting Group is your most trusted and respected professional business consulting firm recognised by our clients for delivering excellent business advisory and consulting services that create value to their ventures. With our focus set on value addition, we offer our clients the highest quality professional services in Accounting, Audit and assurance, Tax, Business Transformation, Investments and Financial Advisory, Family Business Advisory, Company Secretarial Services and Property Management that addresses their business needs through attracting, recruiting and retaining knowledgeable and passionate professionals who enable…

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text] What is a business plan? A business plan/business proposal is a document that presents an investment idea in writing. It gives a step-by-step outlay of the activities to be undertaken. It is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It’s a tool for understanding how your business is put together. You can use it to monitor progress, hold yourself accountable and control the business’s fate. Composition of a business plan? Executive Summary: It gives a brief description of the whole business idea. Background Information: It gives a brief overall history. It talks about the origin or dynamics in the growth of the business and the industry. Project concept: What entails the business activity? It talks about the projects and gives project details regarding the; Why, when, where and how Technical Aspects: It explains the type and specifications of the machinery that will be used for production and whether or not the firm has the required technical capability in relation to operating the machinery. Raw Materials and Other Inputs: The basic production components i.e. what goes into producing the final product? Organization and Management: Explains the organization structure and management and how effective they are. Marketing and Market Analysis: Plans to create demand for the product. Sales Strategies: How to achieve desired sales by satisfying the demand. Funding Requirements: The capital required to start and run the business. Financial Projections: Estimates of the future financial performance of the business. Economic Analysis: It is an analysis of the economic impact of the business venture on the other businesses and the general society around it. Risk Assessment: What are the chances of failure, or the opportunities available? Environment, Social and Gender Issues: The impact of the business on the environment, corporate social responsibility and the inclusion of both gender. Users of a business plan? The entrepreneur who are intending to start a business venture. Financial institutions. To determine the funding requirements and the proposed funding utilization strategy in order to determine the credit worthiness of the borrower. The company management. Acts as a guide for the implementation of the project. Potential investors or business partners. Evaluate the business and decide whether to invest or not. Company employees. Helps the company to have a sense of direction.  Purpose of a business plan When establishing a new business: The plan is used to establish the right steps to starting a new business, including what you need to do, what resources will be required, and what you expect to happen. Grow your existing business: Help establish a strategy and allocate resources according to strategic priority. It is a tool to secure funding: Banks and most of the credit offering facilities will consider offering you a business loan only with a properly done business proposal (mostly in manufacturing). Know if, when, and how you are making money: The business plan indicates when income and expenses are expected. This makes it easier for an investor to plan for limited operational finances. Share and explain business objectives with your management team, employees, and new hires: Makes selected portions of your business plan part of your new employee training. A map for the future: Business plan gives a detailed description of all that needs to be done in order to get to the set destination. There is a sequence of activities. The business plan shows strategic ways to market the product or service being offered: It enables analyzing the market which in turn helps set up strategies on how to induce demand. A guide for decision making: A business plan can prevent you from making a hasty decision that leads you astray. This helps to avoid time and resource wastage. Recruitment: A business plan helps you identify the employees’ requirements hence enabling fill the gaps. Manage Company: A business plan conveys the organizational structure of your business, including titles of directors or officers and their individual duties. This enables everyone to have their targets outlined properly. Help manage bootstrapping financing: Help start-up a business from scratch and build it up with minimal outside investment and finances. Sell your business: Usually, a business plan is a very important part of selling the business. Help buyers understand what you have, what it’s worth and why they should it over it. Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues: Valuation is the term for establishing how much your business is worth. Usually that takes a business plan, as well as a professional with experience. The plan tells the valuation expert what your business is doing, when, why and how much that will cost and how much it will produce. About the Author Thank you for reading this article. The author, James Ndambiri is an avid Business Advisor and Consultant: A Tax Surgeon, Proficient Accountant, Skilled Auditor, a Guru in Financial and Investment management, Expert in Business Strategy Formulation, Business Transformation Wizard, Family Business Advisor, Lecturer, Business Coach and a Family Man. James is the Founder, Team Leader, CEO & Managing Partner of MNC Consulting Group. MNC Consulting Group is your most trusted and respected professional business consulting firm recognized by our clients for delivering excellent business advisory and consulting services that create value to their ventures. With our focus set on value addition, we offer our clients the highest quality professional services in Accounting, Audit and assurance, Tax, Business Transformation, Investments and Financial Advisory, Family Business Advisory, Company Secretarial Services and Property Management that addresses their business needs through attracting, recruiting and retaining knowledgeable and passionate professionals who enable us to deliver superior results while contributing positively to the community in which we live and work. Make us your business partner by always consulting with us. ‘‘With us, you are in safe hands’’[/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text] What is Forensic Accounting? It’s the specialty practice area of accounting that describes engagements that result from actual or anticipated disputes or litigation. “Forensic” means suitable for use in Court, and it is to that standard and potential outcome that forensic accountants generally have to work. Forensic accountants give expert evidence at the eventual trial by utilizing their accounting and auditing skills, and using their investigative skills to determine when and what events actually took place in a certain financial setting. Forensic Accounting encompasses two main broad areas: Litigation Provision – Litigation represents the factual presentation of economic issues related to existing or pending litigation. In this capacity, the forensic accountant quantifies damages sustained by parties involved in legal disputes and can assist in resolving disputes before they reach the courtroom. If a dispute reaches the courtroom, the forensic accountant may testify as an expert witness. Knowledge of the courtroom sets the forensic accountant apart from a typical accountant. Investigation – Investigation is the act of determining whether criminal matters such as employee theft, securities fraud (including falsification of financial statements), identity theft, or insurance fraud have occurred. Investigation may also occur in civil matters. A forensic accountant may be hired to search for hidden assets in a divorce case. Engagements relating to Forensic Accounting may fall into several categories; Absence of a complete set of financial records – Forensic Accounting assists to reconstruct financial information when complete set of financial records are not available. For instance, when the financial records have been destroyed and when converting cash basis accounting records to accrual basis accounting and so forth. Shareholders’ and Partnership Disputes – These assignments often involve a detailed analysis of numerous years accounting records to quantify the issues in dispute. For example, a common issue that often arises is the compensation and benefits received by each of the disputing shareholders or partners. Business Interruption / Other Types of Insurance Claims – Insurance policies differ significantly as to their terms and conditions. Accordingly, these assignments involve a detailed review of the policy to investigate coverage issues and the appropriate method of calculating the loss. Examples of these types of forensic accounting assignments include; business interruptions, property losses and employee dishonesty (fidelity) claims. Business/Employee Fraud Investigations – Business investigations can involve funds tracing, asset identification and recovery, forensic intelligence gathering and due diligence reviews. Employee fraud investigations often involve procedures to determine the existence, nature and extent of fraud and may concern the identification of a perpetrator. Criminal Investigations – Engagements relating to criminal matters typically arise in the aftermath of fraud. They frequently involve the assessment of accounting systems and accounts presentation – in essence assessing if the numbers reflect reality. Forensic accountants may be involved in recovering proceeds of crime and in relation to confiscation proceedings concerning actual or assumed proceeds of crime or money laundering. Matrimonial Disputes – Matrimonial disputes from a Forensic Accounting point-of-view often involve the tracing, locating and evaluation of assets. The assets may be businesses, property or other assets and were owned or were under the management of the partners. Business Economic Losses – Examples of assignments involving business economic losses include; contract disputes, construction claims, expropriations, product liability claims, trademark and patent infringements and losses stemming from a breach of a non-competition agreement. Professional Negligence – Forensic accountants often assist in professional negligence claims where they are assessing and commenting on the work of other professionals. These investigations are often approached from two different but complimentary perspectives, these being: Technical – This is when the professional in question has a breach of Generally Accepted Accounting Principles or Generally Accepted Auditing Standards or other standards of practice occurred; and Loss Quantification – If the professional in question is an accountant then a Forensic Accountant could be involved with both perspectives. If the matter involves some other profession a Forensic Accountant will normally be retained to perform only a loss quantification. Conclusion While forensic accounting and fraud auditing are related, fraud auditing is more anticipatory. Fraud auditors try to control a situation before something happens, whereas a forensic accountant may be hired after the fact. A forensic accountant is usually hired after a company suspects’ theft, fraud or embezzlement. Forensic accountants are suspicious. They must be able to apply their accounting knowledge to legal issues. A forensic Certified Public Accountant will be asked to write expert reports, assist in depositions, testify as an expert witness, conduct fraud investigations and assist in civil and criminal investigations. About the Author Thank you for reading this article. The author, James Ndambiri is an avid Business Advisor and Consultant: A Tax Surgeon, Proficient Accountant, Skilled Auditor, a Guru in Financial and Investment management, Expert in Business Strategy Formulation, Business Transformation Wizard, Family Business Advisor, Lecturer, Business Coach and a Family Man. James is the Founder, Team Leader, CEO & Managing Partner of MNC Consulting Group. MNC Consulting Group is your most trusted and respected professional business consulting firm recognized by our clients for delivering excellent business advisory and consulting services that create value to their ventures. With our focus set on value addition, we offer our clients the highest quality professional services in Accounting, Audit and assurance, Tax, Business Transformation, Investments and Financial Advisory, Family Business Advisory, Company Secretarial Services and Property Management that addresses their business needs through attracting, recruiting and retaining knowledgeable and passionate professionals who enable us to deliver superior results while contributing positively to the community in which we live and work.   Make us your business partner by always consulting with us. ‘‘With us, you are in safe hands’’[/vc_column_text][/vc_column][/vc_row]

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text] Who is a CEO? A chief Executive Officer (CEO) is the highest-ranking executive in a company, and his/her primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point of communication between the board of directors and corporate operations. He/she takes part in day today running of the business and executes the policies and decisions of the board of directors. An organisation can have a CEO who is not a director but is engaged to run an organisation. However, where the CEO is also a shareholder and a director, he/she is referred to as the managing director, president or executive director depending with the type of organisation. Who does the CEO report to? The CEO reports to the Board of Directors. What is the work of a CEO? The responsibility of a CEO is to devise strategies and policies that ensure an organization meets its goals and objectives. His/her primary tasks include making major corporate decisions, managing the overall operations and resources of a company and acts as a direct liaison between the Board and management of the company and communicates to the Board on behalf of management. He plans, directs, and coordinates operational activities of a company. The CEO sets the vision and mission for the organisation. SEVEN KEY TRAITS OF A GREAT CEO Understand the responsibility of a CEO CEOs have five key responsibilities, no matter the company’s size, industry or geography. Only the Chief Executive Officer who has a holistic view of the firm can take on these duties:  Own the vision As the CEO you should determine and communicate the organization’s strategic direction. Until that’s settled, making decisions about anything else at the business is difficult. And without this, the company is merely a collection of people pursuing individual goals, guided by their own values. While other people may help shape the strategic vision, the CEO must be able to describe it in a clear, engaging and exciting way for all stakeholders. Provide the proper resources Only the CEO can perform the task of balancing resources, the two most important ones being capital and people. The CEO must make both available in the proper quantities and at the right time for the company to succeed. Build the culture Culture is the set of shared attitudes, goals, behaviors and values that characterize a group. It adds up to how things get done in a company and influences the entirety of the employee experience and thus the customer experience. Every organized group of individuals develop a culture, whether it’s explicitly recognized or not and the CEO must constantly observe and be involved to achieve the desired culture. Make good decisions A new CEO is often surprised by the breadth of issues confronting him (or her). One minute the CEO is discussing a new product, the next a human resources issue and then along comes a legal issue. It’s impossible for anyone to be an expert in all aspects of the business, yet the CEO is the person tasked with making the decisions. Many problems require a solution that will end up affecting multiple departments, and only the CEO is empowered to take such an action. Everyone else can pass the buck from time to time, but the CEO will make the final call when no one else will or can. Oversee and deliver the company’s performance Everyone agrees that the CEO is ultimately responsible for a company’s performance. To be successful, you must take an active role in driving that performance. This requires maintaining a keen awareness of the firm’s industry and market and being in touch with the core business functions to ensure proper execution of tasks. Spend extra time learning For you to make wise decisions for a company a strong base of knowledge in the following fields is advocated for: finance, marketing, accounting, operations, procurement, strategy and human resource management. A great CEO never stops increasing and honing his or her knowledge. He can achieve this by attending seminars, workshops, school, reading etc. Can one become a great CEO without formal education? You can of course become a great CEO with only basic formal education. However, you will be required to polish up your skill through on job training. Build a good and powerful network The most successful Chief Executive Officers know that no one ever succeeds alone. You understand how valuable a professional network is in attaining success and achieving personal and professional goals. You should value the relationships you have cultivated over the years. By virtue of your position, you must be on top of what’s occurring in the company at all times, and be able to monitor and assess the financial health of the organization. You should know that a network with the right kind of contacts allows you to accelerate problem-solving and decision-making, and broaden your influence because you have access to private information, diverse thought, and a variety of skills set and power – the right person to connect with in any given situation is just a phone call away. The most successful CEOs are pros at networking and they know how to do it effectively. As a CEO you should also know that networking is about relationships, so you give before you ask. And because you are super busy, you should understand the power of leveraging your professional network of contacts. For you, it’s not about quantity, but the quality of your contacts. In your networks, you should have a few connectors who can significantly expand your professional reach. You may not attend networking events, but are members of professional groups where you can discuss issues and challenges with your contemporaries. The ability to network effectively is one of the most powerful tools that you can use to advance in your career. In your already over-scheduled day, learn how to network like CEOs and strategically build your network of contacts – making sure that you are connected to a…

[vc_row][vc_column][vc_custom_heading source=”post_title” use_theme_fonts=”yes”][vc_column_text]What is job sculpting? Job sculpting is the art of matching people to jobs that allow their deeply embedded life interests to be expressed. It is the art of forging a customized career path in order to increase the chance of retaining talented people. It is deeply embedded in life interests that are long-held, emotionally driven passions, intricately entwined with personality and thus born of unspecified mix of nature and nurture. Job sculpting techniques Ask employees to play an active role in job sculpting, perhaps by having them write about their views of career satisfaction an excellent starting point for a discussion. In some cases, sculpting can begin simply by adding a new responsibility. An Accountant who has a deeply embedded life interest in counseling and mentoring might be asked to plan and manage the orientation of new hires. A change in assignment provides another sculpting opportunity. A Marketer with an interest in quantitative analysis might be given new duties working with market research analysts. Managers should have a strong interest in the motivational psychology of their employees. In fact, they should openly express their willingness to help sculpt their employees ‘careers and to make the extra effort required to hold onto talented people. Even greater sculpting changes are sometimes required for example, when a manager can only meet a worker’s interests with a transfer to another department. In other cases, amicable separation is necessary, as when an Accounting firm has no job for an employee with a life interest in influence through language and ideas. Importance of job sculpting It keeps people engaged, and keeps them off from quitting. It is the art of forging a customized career path in order to increase the chance of retaining talented people. It creates happiness at work which often translates into commitment in employees’ areas of work. It creates good opportunities for advancement at work. Business core functions that represent the way deeply embedded life interests find expression in business Application of Technology: Whether or not they are actually working as or were trained to be engineers, people with the life interest application of technology are intrigued by the inner workings of things. They are curious about finding better ways to use technology to solve business problems. Quantitative Analysis: Some people aren’t just good at running the numbers, they excel at it. They see it as the best, and sometimes the only, way to figure out business solutions. Similarly, they see mathematical work as fun when others consider it drudgery, such as performing a cash-flow analysis, fore-casting the future performance of an investment instrument or figuring out the best debt/equity structure for a business. They might also enjoy building computer models in order to determine optimal production scheduling and to perform accounting procedures. Theory Development and Conceptual Thinking: For some people, nothing brings more enjoyment than thinking and talking about abstract ideas. People with this interest can be excited by building business models that explain competition within a given industry or by analyzing the competitive position of a business within a particular market. Our research also shows that people with this deeply embedded interest are often drawn to academic careers. Some end up there; many do not. Creative Production: Some people always enjoy the beginning of projects the most, when there are many unknowns and they can make something out of nothing. These individuals are frequently seen as imaginative, out of the box thinkers. They seem most engaged when they are brainstorming or inventing unconventional solutions. Indeed, they seem to thrive on newness. The reason creative production is one of their dominant deeply embedded life interest making something original, be it a product or a process. Counseling and Mentoring: For some people, nothing is more enjoyable than teaching in business, that usually translates into coaching or mentoring. These individuals are driven by the deeply embedded life interest of counseling and mentoring, allowing them to guide employees, peers, and even clients to better performance. People with a high interest in counseling and mentoring are also often drawn to organizations, such as museums, schools, and hospitals, that provide products or services they perceive to hold a high social value. People like to counsel and mentor for many reasons. Some derive satisfaction when other people succeed; others love the feeling of being needed. Regardless, these people are drawn to work where they can help others grow and improve. Managing People and Relationships: Longing to counsel and mentor people is one thng; wanting to manage them is another thing entirely. Individuals with this deeply embedded life interest enjoy dealing with people on a day to day basis. They derive a lot of satisfaction from workplace relationships, but they focus much more on outcomes than do people in the counseling and mentoring category. In other words, they’re less interested in seeing people grow than in working with and through them to accomplish the goals of the business, whether it is building a product or making a sale. That is why people with this life interest often find happiness in line management positions or in sales careers. Enterprise Control: Enterprise-control people are easy to spot in organizations. They seem happiest when running projects or teams, they enjoy “owning” a transaction such as a trade or a sale. These individuals also tend to ask for as much responsibility as possible in any work situation. Pure interest in enterprise control can be seen as an interest in deal making or in strategy a person with this life interest wants to be the Chief Executive Officer (CEO), not the Chief Operations Officer (COO). Investment bankers, for example, don’t run ongoing operations but often demonstrate a very strong interest in enterprise control. Influence Through Language and Ideas: Some people love ideas for their own sake, but others love expressing them for the sheer enjoyment that comes from storytelling, negotiating, or persuading. Such are people with the deeply embedded life interest of in-fluence through language and ideas. They feel most…