This document provides an analysis of the single family home construction industry in the United States in 1990. It includes a summary of the industry background and current state, along with strengths, weaknesses, opportunities, and threats (SWOT) analysis. It also covers topics related to starting a small home building business such as financing, financial planning, marketing, management, and the future outlook for the industry.
This document summarizes research on the financing needs of small enterprises. The key findings are:
1) Small business owners appeared satisfied with their financial institutions but experienced changes in financing terms and conditions over time.
2) Most small businesses need more credit to expand operations and seize business opportunities but have not had problems accessing credit.
3) Demographic factors influence small business owners' responses to financing, and future research should study relationship lending and bank selection.
This document summarizes a discussion paper on the relationship between sustained economic growth and financial systems. It begins by noting that traditional growth theory does not consider the role of financing, but that financial systems play important roles in channeling savings to investment, allowing risk sharing, and producing information to allocate capital. It then reviews literature on how financial systems can promote growth through producing information, allocating capital to high-return projects, and facilitating risk sharing. The paper discusses empirical evidence and challenges in analyzing the complex relationships between financial development, structure, and economic growth.
"...as long as the music is playing, you've got to get up and dance. We're still dancing." /Financial Times in July 2007: Charles Prince, Citigroup (former) chief executive/
This document analyzes the United States' performance on the Global Entrepreneurship and Development Index (GEDI), which measures entrepreneurship across 71 countries. The key points are:
1) The US ranks third overall on the GEDI, performing well on entrepreneurial aspirations but lagging somewhat on attitudes and activity.
2) At the pillar level, the US is strong in startup skills, competition, and new technology, but weak in cultural support, the tech sector, and high-growth businesses.
3) The US performs better on institutional variables than individual variables.
4) The document suggests the US weakness in tech and cultural support, and lack of high-growth businesses,
The document discusses Ireland's economy and the global financial crisis. It analyzes Ireland's economic performance over different stages, compares Ireland's experience to other countries like Japan, and outlines lessons learned. It recommends that Ireland focus on competitiveness, intangible infrastructure like education, and nurturing new industries to drive growth over the next decade as it recovers from the crisis.
This document compares small businesses and Fortune 500 companies in terms of their role in job creation in the US economy. It finds that while both play an important role, small businesses tend to create more net new jobs, especially during economic downturns when they are more nimble than large corporations in starting up new ventures. However, jobs created by small businesses may be of lower quality on average due to factors like lower pay and benefits. Overall, small businesses are shown to significantly contribute to the US economy through job creation.
This document summarizes research on the financing needs of small enterprises. The key findings are:
1) Small business owners appeared satisfied with their financial institutions but experienced changes in financing terms and conditions over time.
2) Most small businesses need more credit to expand operations and seize business opportunities but have not had problems accessing credit.
3) Demographic factors influence small business owners' responses to financing, and future research should study relationship lending and bank selection.
This document summarizes a discussion paper on the relationship between sustained economic growth and financial systems. It begins by noting that traditional growth theory does not consider the role of financing, but that financial systems play important roles in channeling savings to investment, allowing risk sharing, and producing information to allocate capital. It then reviews literature on how financial systems can promote growth through producing information, allocating capital to high-return projects, and facilitating risk sharing. The paper discusses empirical evidence and challenges in analyzing the complex relationships between financial development, structure, and economic growth.
"...as long as the music is playing, you've got to get up and dance. We're still dancing." /Financial Times in July 2007: Charles Prince, Citigroup (former) chief executive/
This document analyzes the United States' performance on the Global Entrepreneurship and Development Index (GEDI), which measures entrepreneurship across 71 countries. The key points are:
1) The US ranks third overall on the GEDI, performing well on entrepreneurial aspirations but lagging somewhat on attitudes and activity.
2) At the pillar level, the US is strong in startup skills, competition, and new technology, but weak in cultural support, the tech sector, and high-growth businesses.
3) The US performs better on institutional variables than individual variables.
4) The document suggests the US weakness in tech and cultural support, and lack of high-growth businesses,
The document discusses Ireland's economy and the global financial crisis. It analyzes Ireland's economic performance over different stages, compares Ireland's experience to other countries like Japan, and outlines lessons learned. It recommends that Ireland focus on competitiveness, intangible infrastructure like education, and nurturing new industries to drive growth over the next decade as it recovers from the crisis.
This document compares small businesses and Fortune 500 companies in terms of their role in job creation in the US economy. It finds that while both play an important role, small businesses tend to create more net new jobs, especially during economic downturns when they are more nimble than large corporations in starting up new ventures. However, jobs created by small businesses may be of lower quality on average due to factors like lower pay and benefits. Overall, small businesses are shown to significantly contribute to the US economy through job creation.
1) The global economic imbalances continue to pose challenges as the underlying issues of spending and saving patterns between deficit and surplus countries remain unresolved.
2) While the solutions are understood in principle, there are disagreements between countries around exchange rate flexibility and the appropriate policy responses.
3) Any international monetary system would struggle to absorb large shocks and accommodate the rise of large emerging economies like China, so underlying sources of imbalances must be addressed.
The document discusses the causes, effects, and outcomes of the Great Recession that began in 2007. It explores the role of the housing market, subprime loans, credit default swaps, and monetary policy in causing the crisis. The recession significantly impacted the United States, Europe, and global economies. While government actions sought to address the crisis, more may need to be done to prevent future recessions.
Here are the key facts about SMEs in the EU according to the document:
- Over 99% of all European businesses are SMEs (small and medium-sized enterprises)
- Nine out of ten SMEs are actually micro enterprises with less than 10 employees
- On average, micro enterprises provide work for two people
- SMEs are the main drivers of employment and economic growth in the EU
ICMA has prepared a paper for policy makers about why corporate bond markets are so important for economic growth, for investors, for companies, and for governments, around the world; and why it is therefore essential that laws and regulations that affect them avoid any unintended adverse consequences that could inhibit those markets.
The document discusses the need for ICT corporations to shift their focus from financial systems to economics in light of global economic shifts. It notes the job losses in the ICT sector, especially at Microsoft, and argues economics should guide business decisions more than politics. The US economy is analyzed and found to have significant debt issues, calling into question its status as sole world leader. The document advocates for ICT companies like Microsoft to assess local markets, focus on the bottom two thirds of consumers, and develop strategies guided by economic principles rather than just maintaining the same approaches.
Best Performing Cities Index: Austin jumped from #4 to the # 1 position and is the only city to have achieved the #1 ranking twice the last time being in 2000.
2001 12 india indira gandhi institute_ keynote address_13_dec2001William White
This document provides an overview of the evolving global financial system and its implications for emerging markets. It discusses several key themes:
1) Forces driving change in the global financial system include advances in technology, deregulation, demographic shifts, and increased competition. These forces have manifested in securitization, globalization, and consolidation in the financial industry.
2) International capital flows into and out of emerging markets can create volatility. Recommendations to address this include improving transparency, strengthening domestic frameworks, and using macroprudential tools like capital controls.
3) International standards and their applicability to emerging markets are an important consideration, as countries evaluate how to balance financial openness and stability.
Sector Portfolios across the Crisis and Risk behaviourSimone Guzzo
This paper analyzes the performance of the US financial sector before and after the 2007-2008 financial crisis, compared to the information technology and industrial sectors. It builds portfolios of firms in each sector and analyzes their performance trends over time. It finds that the financial sector had the worst reaction to the crisis, underperforming the other sectors. The financial sector decline also amplified the effects of the crisis on the other sectors. The paper further examines the influence of leverage on firms' performance during the crisis.
Two Tiers Of Representation And Policy The Eu And The Future Of ...legal2
This document summarizes and analyzes the representation of football in the European Union through two frameworks - the associative state model and the company state model. It discusses the formation and goals of the G-14 organization, which represents large European clubs and advocates for the commercial interests of football. It also discusses UEFA's role and how it emphasizes principles of solidarity over commercial interests. The document examines the EU's involvement in football from perspectives of competition policy, its role as a regulatory state, and its goal of increasing legitimacy among European citizens. It analyzes the tensions between viewing football as primarily an economic activity versus a social one.
01 introducing the economic way of thinkingNepDevWiki
This chapter introduces key economic concepts such as scarcity, resources, and the difference between microeconomics and macroeconomics. It explains that scarcity exists because human wants are unlimited but resources are limited, forcing individuals and societies to make choices. Resources are categorized as land, labor, and capital. Entrepreneurs organize these resources to produce goods and services. Economics studies how people make choices to satisfy wants. Microeconomics examines individual decision-making units while macroeconomics looks at whole economies. Models are used to understand and predict economic behavior.
This document discusses how economists think and work. It explains that economists use the scientific method to develop theories and models to understand the economy. Economists create simplified models like the circular flow diagram and production possibilities frontier to illustrate key economic concepts. The document also discusses how economists take on two roles: as scientists seeking to explain how the economy works, and as policy advisors making recommendations to improve the economy. However, economists do not always agree due to differences in their scientific analysis or underlying values.
This document discusses new models of economic development needed for a shifting global economy. It notes that the old industrial economy is being replaced by a new knowledge-based, networked economy. This requires more open and collaborative civic leadership and processes focused on strategic doing rather than planning. Communities must build innovation clusters through open networks to attract investment and jobs in this new economy.
Economic way of thinking: Economics - Concepts and Choices, 2011. Holt McDougalTravis Mitchell
Economic way of thinking is the introductory chapter for Holt McDougal's textbook Economics:Concepts and Choices, 2011. Topics shown include; scarcity, trade-offs, opportunity cost, production possibilities curve, as well as, positive and normative economics.
Dokumen tersebut membahas tentang etika dan panduan penggunaan internet yang sepatutnya, termasuk definisi etika, prinsip-prinsipnya, larangan-larangan dan sanksi bagi pelanggaran. Dibahas pula manfaat dan risiko penggunaan teknologi maklumat serta tanggung jawab penggunanya.
Il physical computing studia le interazioni uomo-macchina creando oggetti quasi magici. Richiede competenze di prototipazione e progettazione elettronica. Ecco l'idea di creare piccoli blocchi facilmente combinabili... programmabili. Programmiamo in 'hardware', spostando e connettendo con le nostre mani piccoli e semplici circuiti. Dopo un'introduzione al physical computing vedremo insieme come si concretizzano idee come http://littlebits.cc/ illustrando la nostra proposta open source.
Simoune prepared for her graduation day from Angels Dream Learning Center on March 17, 2012. She got dressed and put on her socks and shoes, then helped her dad put on his toga. At the ceremony, Simoune received an award for Outstanding Student and posed for pre-and post-pictures with her family and friends. She graduated and wished everyone good luck as they continued their education.
Phyllis Louage was born in Kortrijk and currently lives in Heule. She attended Howest in Kortrijk where she studied Office Management and Medical Management Assistant.
Columbus 2020 Investor Update | October 2016 | SME Presentation and PanelistsOne Columbus
Jon Aram, CEO of Next Street, presented on small- and mid-sized (SME) manufacturers.
A panel discussion followed and featured representatives from three industry leaders in manufacturing and innovation: Jon Aram, CEO, Next Street; Michael Ulbrich, President of NY Operations, EWI; Kevin Boes, President and CEO, LISC's New Markets Support Company
This document summarizes a study on high-impact firms in Canada. It defines high-impact firms as those that are mid-sized, experience above-average growth rates, and have entrepreneurial leadership. These firms play a disproportionately large role in the Canadian economy despite making up a small percentage of total firms. The document finds that high-impact firms face challenges in management capabilities, accessing new markets, obtaining financing, and addressing labor needs. It recommends actions to better support high-impact firms in order to accelerate Canadian competitiveness.
1) The global economic imbalances continue to pose challenges as the underlying issues of spending and saving patterns between deficit and surplus countries remain unresolved.
2) While the solutions are understood in principle, there are disagreements between countries around exchange rate flexibility and the appropriate policy responses.
3) Any international monetary system would struggle to absorb large shocks and accommodate the rise of large emerging economies like China, so underlying sources of imbalances must be addressed.
The document discusses the causes, effects, and outcomes of the Great Recession that began in 2007. It explores the role of the housing market, subprime loans, credit default swaps, and monetary policy in causing the crisis. The recession significantly impacted the United States, Europe, and global economies. While government actions sought to address the crisis, more may need to be done to prevent future recessions.
Here are the key facts about SMEs in the EU according to the document:
- Over 99% of all European businesses are SMEs (small and medium-sized enterprises)
- Nine out of ten SMEs are actually micro enterprises with less than 10 employees
- On average, micro enterprises provide work for two people
- SMEs are the main drivers of employment and economic growth in the EU
ICMA has prepared a paper for policy makers about why corporate bond markets are so important for economic growth, for investors, for companies, and for governments, around the world; and why it is therefore essential that laws and regulations that affect them avoid any unintended adverse consequences that could inhibit those markets.
The document discusses the need for ICT corporations to shift their focus from financial systems to economics in light of global economic shifts. It notes the job losses in the ICT sector, especially at Microsoft, and argues economics should guide business decisions more than politics. The US economy is analyzed and found to have significant debt issues, calling into question its status as sole world leader. The document advocates for ICT companies like Microsoft to assess local markets, focus on the bottom two thirds of consumers, and develop strategies guided by economic principles rather than just maintaining the same approaches.
Best Performing Cities Index: Austin jumped from #4 to the # 1 position and is the only city to have achieved the #1 ranking twice the last time being in 2000.
2001 12 india indira gandhi institute_ keynote address_13_dec2001William White
This document provides an overview of the evolving global financial system and its implications for emerging markets. It discusses several key themes:
1) Forces driving change in the global financial system include advances in technology, deregulation, demographic shifts, and increased competition. These forces have manifested in securitization, globalization, and consolidation in the financial industry.
2) International capital flows into and out of emerging markets can create volatility. Recommendations to address this include improving transparency, strengthening domestic frameworks, and using macroprudential tools like capital controls.
3) International standards and their applicability to emerging markets are an important consideration, as countries evaluate how to balance financial openness and stability.
Sector Portfolios across the Crisis and Risk behaviourSimone Guzzo
This paper analyzes the performance of the US financial sector before and after the 2007-2008 financial crisis, compared to the information technology and industrial sectors. It builds portfolios of firms in each sector and analyzes their performance trends over time. It finds that the financial sector had the worst reaction to the crisis, underperforming the other sectors. The financial sector decline also amplified the effects of the crisis on the other sectors. The paper further examines the influence of leverage on firms' performance during the crisis.
Two Tiers Of Representation And Policy The Eu And The Future Of ...legal2
This document summarizes and analyzes the representation of football in the European Union through two frameworks - the associative state model and the company state model. It discusses the formation and goals of the G-14 organization, which represents large European clubs and advocates for the commercial interests of football. It also discusses UEFA's role and how it emphasizes principles of solidarity over commercial interests. The document examines the EU's involvement in football from perspectives of competition policy, its role as a regulatory state, and its goal of increasing legitimacy among European citizens. It analyzes the tensions between viewing football as primarily an economic activity versus a social one.
01 introducing the economic way of thinkingNepDevWiki
This chapter introduces key economic concepts such as scarcity, resources, and the difference between microeconomics and macroeconomics. It explains that scarcity exists because human wants are unlimited but resources are limited, forcing individuals and societies to make choices. Resources are categorized as land, labor, and capital. Entrepreneurs organize these resources to produce goods and services. Economics studies how people make choices to satisfy wants. Microeconomics examines individual decision-making units while macroeconomics looks at whole economies. Models are used to understand and predict economic behavior.
This document discusses how economists think and work. It explains that economists use the scientific method to develop theories and models to understand the economy. Economists create simplified models like the circular flow diagram and production possibilities frontier to illustrate key economic concepts. The document also discusses how economists take on two roles: as scientists seeking to explain how the economy works, and as policy advisors making recommendations to improve the economy. However, economists do not always agree due to differences in their scientific analysis or underlying values.
This document discusses new models of economic development needed for a shifting global economy. It notes that the old industrial economy is being replaced by a new knowledge-based, networked economy. This requires more open and collaborative civic leadership and processes focused on strategic doing rather than planning. Communities must build innovation clusters through open networks to attract investment and jobs in this new economy.
Economic way of thinking: Economics - Concepts and Choices, 2011. Holt McDougalTravis Mitchell
Economic way of thinking is the introductory chapter for Holt McDougal's textbook Economics:Concepts and Choices, 2011. Topics shown include; scarcity, trade-offs, opportunity cost, production possibilities curve, as well as, positive and normative economics.
Dokumen tersebut membahas tentang etika dan panduan penggunaan internet yang sepatutnya, termasuk definisi etika, prinsip-prinsipnya, larangan-larangan dan sanksi bagi pelanggaran. Dibahas pula manfaat dan risiko penggunaan teknologi maklumat serta tanggung jawab penggunanya.
Il physical computing studia le interazioni uomo-macchina creando oggetti quasi magici. Richiede competenze di prototipazione e progettazione elettronica. Ecco l'idea di creare piccoli blocchi facilmente combinabili... programmabili. Programmiamo in 'hardware', spostando e connettendo con le nostre mani piccoli e semplici circuiti. Dopo un'introduzione al physical computing vedremo insieme come si concretizzano idee come http://littlebits.cc/ illustrando la nostra proposta open source.
Simoune prepared for her graduation day from Angels Dream Learning Center on March 17, 2012. She got dressed and put on her socks and shoes, then helped her dad put on his toga. At the ceremony, Simoune received an award for Outstanding Student and posed for pre-and post-pictures with her family and friends. She graduated and wished everyone good luck as they continued their education.
Phyllis Louage was born in Kortrijk and currently lives in Heule. She attended Howest in Kortrijk where she studied Office Management and Medical Management Assistant.
Columbus 2020 Investor Update | October 2016 | SME Presentation and PanelistsOne Columbus
Jon Aram, CEO of Next Street, presented on small- and mid-sized (SME) manufacturers.
A panel discussion followed and featured representatives from three industry leaders in manufacturing and innovation: Jon Aram, CEO, Next Street; Michael Ulbrich, President of NY Operations, EWI; Kevin Boes, President and CEO, LISC's New Markets Support Company
This document summarizes a study on high-impact firms in Canada. It defines high-impact firms as those that are mid-sized, experience above-average growth rates, and have entrepreneurial leadership. These firms play a disproportionately large role in the Canadian economy despite making up a small percentage of total firms. The document finds that high-impact firms face challenges in management capabilities, accessing new markets, obtaining financing, and addressing labor needs. It recommends actions to better support high-impact firms in order to accelerate Canadian competitiveness.
Securities Firms and Investment Banks.docxjeffreye3
Securities Firms and Investment Banks
Securities Firms and Investment Banks (IBs)
Investment banks (IBs) help corporations and governments raise capital through debt and equity security issues in the primary market
Underwriting is assisting in issuing new securities
IBs also advise on mergers and acquisitions (M&As) and corporate restructuring
Securities firms assist in the trading of securities in secondary markets
Broker-dealers assist in the trading of existing securities
2
Investment bankers assist borrowers in raising capital in debt and equity markets and provide advice about mergers and acquisitions, corporate restructuring and general assistance in finance. Bankers also provide many creative over the counter derivative products. Securities firms provide brokerage and market making services. The investment banking and securities industries are complementary and many firms provide a broad range of services. Some specialized entities with advantages in certain market niches remain less diversified. The industry underwent tremendous consolidation in the last decade due to increasing scale and scope economies and the need for greater capital. The face of the industry was changed forever during the financial crisis of 2007-2008 with forced buyouts of Merrill-Lynch and Bear-Stearns, failure of Lehman Brothers and Goldman-Sachs and Morgan Stanley becoming commercial banks. Nevertheless, working for many of these firms is often considered the penultimate finance career, with prestige and remuneration to match. With industry profits down, firms on the Street are having a difficult time maintaining their large salaries and bonuses. A very significant portion of profits are paid out in the form of remuneration to executives. The chapter presents an overview of the size of the industry and the general strategies of the participants, major activities, primary assets and liabilities on the balance sheet, recent in the news events concerning breaches of ethics and the trend toward globalization.
Size, Structure and Composition of Industry
The size of the industry is usually measured by the equity capital of firms rather than total asset size
Equity capital in the industry in 2015 was $235 billion
The number of firms in the industry changed due to economies of scale and scope, losses with the economy, scandals at some firms, and regulations that allowed both inter- and intra-industry mergers
5,248 firms in 1980
9,515 firms in 1987
6,016 firms in 2006
4,115 firms in 2016
As with commercial banks, consolidation has largely occurred through mergers and acquisitions
.
Securities Firms and Investment Banks.docxkenjordan97598
Securities Firms and Investment Banks
Securities Firms and Investment Banks (IBs)
Investment banks (IBs) help corporations and governments raise capital through debt and equity security issues in the primary market
Underwriting is assisting in issuing new securities
IBs also advise on mergers and acquisitions (M&As) and corporate restructuring
Securities firms assist in the trading of securities in secondary markets
Broker-dealers assist in the trading of existing securities
2
Investment bankers assist borrowers in raising capital in debt and equity markets and provide advice about mergers and acquisitions, corporate restructuring and general assistance in finance. Bankers also provide many creative over the counter derivative products. Securities firms provide brokerage and market making services. The investment banking and securities industries are complementary and many firms provide a broad range of services. Some specialized entities with advantages in certain market niches remain less diversified. The industry underwent tremendous consolidation in the last decade due to increasing scale and scope economies and the need for greater capital. The face of the industry was changed forever during the financial crisis of 2007-2008 with forced buyouts of Merrill-Lynch and Bear-Stearns, failure of Lehman Brothers and Goldman-Sachs and Morgan Stanley becoming commercial banks. Nevertheless, working for many of these firms is often considered the penultimate finance career, with prestige and remuneration to match. With industry profits down, firms on the Street are having a difficult time maintaining their large salaries and bonuses. A very significant portion of profits are paid out in the form of remuneration to executives. The chapter presents an overview of the size of the industry and the general strategies of the participants, major activities, primary assets and liabilities on the balance sheet, recent in the news events concerning breaches of ethics and the trend toward globalization.
Size, Structure and Composition of Industry
The size of the industry is usually measured by the equity capital of firms rather than total asset size
Equity capital in the industry in 2015 was $235 billion
The number of firms in the industry changed due to economies of scale and scope, losses with the economy, scandals at some firms, and regulations that allowed both inter- and intra-industry mergers
5,248 firms in 1980
9,515 firms in 1987
6,016 firms in 2006
4,115 firms in 2016
As with commercial banks, consolidation has largely occurred through mergers and acquisitions
.
Micro small and medium enterprises economicKhushiNotwaniB
Micro and small-scale industries are locally owned small businesses that play an important role in economies worldwide. They are characterized by their modest scale of operations, flexibility, and ability to serve local markets. While facing challenges accessing capital and competition, these industries contribute greatly to employment, entrepreneurship, and regional economic development. Governments implement support programs to help small businesses succeed and sustain economic prosperity.
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This document provides an overview of Market Maker Capital's private placement memorandum. It discusses trends in the market environment that have created opportunities for alternative investment strategies. Specifically, it notes that traditional securities provide little return in a low interest rate environment while exposing investors to significant risk. The document highlights demographic trends like an aging population that will reduce demand and create a systemic event. It argues the current market is in a credit bubble and overvalued. The fund aims to protect capital during downturns and acquire assets at lower prices.
This document provides an overview of Market Maker Capital's private placement memorandum. It discusses trends in the market environment that have created opportunities for alternative investment strategies. Specifically, it notes that traditional securities provide little return in a low interest rate environment while exposing investors to significant risk. The document highlights demographic trends like an aging population that will reduce demand and create a systemic event. It argues the current market is in a credit bubble and overvalued. The fund aims to protect capital during downturns and acquire assets at lower prices.
This document provides an overview of the mortgage broker business environment in Canada. It discusses Canada's economy and real estate sector, factors influencing the housing supply and demand, and government policies and incentives related to real estate. The document also acknowledges the guidance provided by the author's professors and institution in completing the project.
The document provides an outlook on the commercial real estate market in 2016. Some key points:
1) Fundraising remained strong in 2015 and the move toward larger funds continues, with opportunistic and value-added funds performing well. The search for opportunities continues as investors seek deals in new sectors.
2) Foreign investors remain attracted to the US market as a safe haven and are partnering with smaller US funds on secondary and tertiary market deals. Regulation A+ may provide a new avenue for real estate crowdfunding.
3) Data analytics and technology are starting to transform operations, while cybersecurity needs to become a higher priority as real estate assets become more connected.
4) The relentless
The real estate industry in India has grown rapidly and comprises housing, retail, hospitality, and commercial sub-sectors. It contributes significantly to India's GDP and total market size is expected to reach $180 billion by 2020. While the industry faces threats from new entrants, suppliers like land and banks have strong bargaining power. Buyers also have significant influence. Substitute threats are ambiguous due to economic conditions. Existing firms face high competition due to many players and difficulty differentiating offerings. Overall the industry is recovering from economic downturns and demand is growing steadily.
The document discusses the current state and future of the U.S. venture capital industry. It argues that while venture capital has played an important role in financing growth companies, its importance is often overstated. Venture capital represents only a small fraction of startup financing. The performance of the venture capital industry has also stagnated in recent years, with 5-year and 10-year returns not significantly outperforming public markets. For the industry to remain viable and continue supporting entrepreneurs, it will need to improve its returns going forward.
1) The document provides an introduction and overview of investing basics from the perspective of an experienced portfolio manager.
2) It discusses how technological advances over the past few decades have greatly increased access to investing for ordinary individuals by reducing trading costs and providing free access to company information.
3) The individual investor now has many low-cost options available like discounted brokerages, lower trading fees, and free access to company financial filings and news online.
The document discusses small scale industries in India. It states that small scale industries are a very important segment of the Indian economy, providing employment and contributing to exports. It defines micro, small and medium enterprises based on their investment in plant and machinery or equipment. Small enterprises have advantages like creating more jobs, being set up easily in rural areas, and fostering local entrepreneurship. They play an important role in socio-economic development.
Tuesday's Leaders. Growing When Your Industry Doesn’t from Strategy+ Business.BURESI
1) The article discusses how some companies are able to achieve above-average growth and shareholder returns even when competing in slow-growing or below-average industries. These "winners" are able to take market share from competitors profitably through unique advantages in areas like quality, selection, cost, service, or functionality.
2) Two examples are given of companies that created "disequilibrium" in their industries through superior offerings - Blockbuster Video dominated the movie rental industry in the 1980s-1990s through well-organized stores and customer data, and Polaris Industries grew in the leisure equipment sector through innovative products.
3) To sustain an advantage, market leaders must manage industry ecosystems to their benefit
Small scale industry an introduction --indiaBinod Sinha
This document provides an introduction and overview of small scale industries (SSI) in India. It discusses how SSI makes up an important segment of the Indian economy. It defines micro, small, and medium enterprises based on their level of investment. It outlines the characteristics of small enterprises, including how they are locally focused, labor intensive, flexible, and help promote regional development. The document also discusses the advantages SSI provide like job creation and the rationale for their development in India like addressing unemployment.
The document discusses the global financial crisis of 2008 and its causes and effects. It states that the crisis was caused by a combination of factors, including easy credit policies, risky mortgage lending, misrated securities, and greed. This led to a housing bubble, collapse of major financial institutions, stock market crashes, rising unemployment worldwide, and slowed global economic growth. To prevent future crises, it recommends reforms like increased transparency, accountability, prudent risk management, and ethical standards in the financial industry.
This document summarizes an article from the March 2015 issue of the Small Business Journal. It discusses the evolving issue of whether a small business should buy or lease its business space. As businesses mature, lease renewals can significantly increase rents and disrupt profitability. The article describes how owning the business space through programs like the SBA 504 Loan Program can help small businesses facing this challenge by providing financing to purchase real estate. It also notes that successful entrepreneurs may want to diversify investments into real estate, leveraging their local market knowledge.
Fastenal is the largest industrial and construction supply distributor in North America. It operates nearly 2,700 stores across 50 US states and 20+ other nations. While it has a strong store network and distribution model, it is highly dependent on the US market, making it vulnerable to economic downturns there. Opportunities for growth include expanding e-commerce, opening new stores, and increasing sales in the growing construction industry. However, Fastenal faces threats of intense competition and volatility in raw material prices like steel. The company communicates through its website, Facebook page, and network of stores.
Starting a business is like embarking on an unpredictable adventure. It’s a journey filled with highs and lows, victories and defeats. But what if I told you that those setbacks and failures could be the very stepping stones that lead you to fortune? Let’s explore how resilience, adaptability, and strategic thinking can transform adversity into opportunity.
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1. Page 1 of 17
INDUSTRY ANALYSIS
CONSTRUCTION OF SINGLE FAMILY HOMES
SIC # 1521
Kris Henkes
Steve Mourer
University of Cincinnati
Dr. Charles Matthews
Analysis of a Small Business
22-405-571
Final Report
December 7, 1990
The University of Cincinnati, College of Business Administration
is partially funded by the U.S. Small Business Administration.
The support given by the U.S. Small Business Administration
through such funding does not constitute an expressed or implied
endorsement of any of the co-sponsor(s)' of participants'
opinions, products, or services.
EXECUTIVE SUMMARY
This report was conducted Industry of Single Family Home
Building on a broad scope and a look at the small home building
to present the reader the broad scope and a look firm in depth.
Contained in this report for the industry on the broad scope is a
S.W.O.T. Analysis (Strengths, Weaknesses, Opportunities, and
Threats to show where the industry is currently as far as its
strengths and weaknesses, what opportunities exist for the firms
within the industry, internal and external threats affecting the
industry. The future outlook for the industry at present is also
covered.
For the small Single Family Home Builder, many aspects were
covered. These included Startup of a small firm, Financing,
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Financial Planning and Control, Robert Morris Statement Analysis
to see where most small firms are in relation to industry
averages, Marketing, Management, and Design/ Construction.
The report enables the reader to see how small firms
doing, possible trends, and the likelihood of entry into the
industry.
TABLE OF CONTENTS
Industry Background ........................................1
Current State of the Industry...............................2
Strengths .............................................3
Weaknesses ............................................5
Opportunities..........................................6
Threats ...............................................8
Startup....................................................10
Financing..................................................10
Equity Capital........................................10
Working Capital.......................................11
Growth Capital........................................12
Financial Planning and Control.............................13
Statement Analysis.........................................14
Assets................................................14
Liabilities ..........................................14
Income Data ..........................................15
Marketing..................................................15
Management.................................................17
Design/Construction........................................18
Future Outlook.............................................19
Conclusion ................................................21
Appendix
Graph of Housing Starts............................A
Business Plan......................................B
Cash Flow Projection...............................C
Balance Sheet .....................................D
Best, most probable, and worst case scenarios......E
References
INDUSTRY BACKGROUND
The home building industry in the 1980's has been described
as a roller coaster ride--often exhilarating, sometimes scary.
The environment of the industry started on a downturn, then went
up, and then came back down again. The fluctuations were caused
by a number of factors but the main one was the general economic
situation of the United States, most significantly the Savings
and Loan crisis.
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The deep recession of the first few years of the 1980's
significantly hurt home builder firms and put many of them out of
business. The worst year was in 1982, when mortgage rates
averaged 16 percent, the number of housing starts declined to
nearly half their level in the late 1970's, and scores of
building firms were forced to close. Builders frantically tried
to survive by cutting costs and lowering prices, resulting in
lower margins, downsizing units, putting homes on smaller lots,
and building more attached housing. Small and large builders
weathered this economic downturn better than the medium -sized
builder. The small firms have a tradition market of larger,
custom homes at the high end of the market and the wealthy buyers
are less affected by the high interest rates and the
recession. The large firms have the advantage of strong
financial resources and they have the resources to ride out a
rocky market. The medium sized firms had neither of these
advantages.
Just as fast as the industry declined, it picked up just as
suddenly. Inflation slowed and interest rates started back down.
A housing boom began due to pent-up demand for the recession as
well as increased number of home buyers from the maturing of the
immense baby boom population. Luxury homes became the norm as
the demand was for bigger, fancier, and more dramatic houses.
High demand for homes in general and luxury homes in particular
helped increase home prices 74 percent from 1980 to 1988. This
housing boom came tumbling down about five years later as a
result of the higher and higher prices, along with sated demand
and less favorable tax benefits. With a few exceptions,
construction has basically slowed steadily since 1986 and is not
showing signs of major booms in the early 1990's. (refer to
Exhibit A for graph of housing starts).
CURRENT STATE OF THE INDUSTRY
The housing industry is showing signs of a deepening down
cycle. The National Association of Home Builders reports that
housing starts in 1990 will hold steady at 1989's anemic level of
1.4 million. As of May 1990, Builder magazine reported that from
1989 to 1990 single family housing starts dropped 7.1 percent to
1.003 million. More recently The Wall Street Journal reported in
October that starts were down 6%, which is the ninth month in a
row of decline. (Refer to EXHIBIT A).
In many industries it is usually the larger firms that adapt
better to economic problems. In these industries big firms often
dominate market share and set the product and marketing standards
that others follow. But that is not necessarily the case in a
fragmented industry such as home building. No single company or
small group of companies has gained enough market share or
stature to dominate or even lead the industry. Large companies
must deal with problems associated with mismanagement of capital,
carrying too much land, not knowing local markets, and spending
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too much time on administration. Smaller firms, on the other
hand, often can get a much better handle on all these things,m
basically because management is streamlined and more responsive
on a smaller level. More importantly, small firms are usually
local and since housing markets are totally localized the small
builder can get to know his market intimately--down to
neighborhoods and blocks.
INDUSTRY STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS
The industry has been going through a recession that
actually started five years ago, but has become more apparent in
1990. This is the longest recession for the construction of
single family housing. The continual decline is based around
many threats. To show the present state of the home building
industry in 1990, a S.W.O.T. (Strengths, Weaknesses,
Opportunities, and Threats) Analysis was conducted.
STRENGTHS
Only two major strengths were realized for the industry as a
whole: 1) the small business home builder; and 2) technology.
The first strength is the small business home builder. There are
essential four reasons why these firms are presently a strength
for the industry. First, the small business home builder starts
fewer homes. Most of them start between 1 - 25 homes per hear.
This means that these companies have less money tied up in homes
that are sitting on the market. Second, the small builders
primary market is that of custom housing. The custom market
tends to keep these firms out of the speculative housing market.
This is due to the fact that customers come to the builder and
ask them to build their homes. Third, small builders are more
flexible due to fewer housing starts and they can move into the
light commercial construction and remodeling markets more easily.
Light commercial construction and remodeling markets tend to be
countercyclical to the construction of single family homes and
allows for possible profits when the home building market is
weak. The fourth reason is that the small firms generally have
little overhead often because the actual construction is sub-
contracted out to other companies.
The second major strength identified for the single family
housing industry overall is technology. With the present
downturn in the economy, new materials and construction processes
help support the individual firm as well as the industry. For
example, one such process is called panelization. This is where
the walls are prefabricated by machines in a plant and then sent
in sections to the job site. Panelization allows for homes to be
put up more quickly at a lower cost to the firm.
WEAKNESSES
Several weaknesses in the Single Family Home Building
Industry include: 1) oversaturated trade-up market; 2) increase
in housing prices; and 3) the cost of labor. The Single Family
Home Building Industry presently consists of an oversaturated
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trade-up market where builders have concentrated too heavily on
middle-of-the-market housing. these are a good number of homes
presently sitting vacant on the market. Speculative housing
projects are now averaging approximately one year of sitting on
the market without a buyer. Also, there is currently a strong
resale market for existing homes which tremendously lowers new
home building because people are moving from their present home
to an existing house.
Since the middle 1980's, another weakness in the single
family housing construction industry that has become apparent is
the large increases in housing prices. In addition this upward
price trend is expected to continue through the 1990's the
speculative home building market is also another weakness
currently. These homes generally are much more higher priced
than the average buyer can afford. With the rise in interest
rates, buyers are becoming less likely to obtain the funds for
these homes and as a result are sitting empty on the market for
long periods of time. This causes a substantial loss to the
builder because for the home to possibly sell, the price of the
home has to be dropped. Also, the builder naturally does not
receive any return on the project for quite some time.
The final weakness that builders are presently faced with is
the growing cost of labor. This is escalating due to the length
of time, 3 - 6 months, that is spent on each home to complete it.
OPPORTUNITIES
A number of opportunities, however, exist for the single
family housing construction industry including: 1)
computerization; 2) remodeling and rehabilitation; 3) custom
housing; 4) townhomes; 5) commercial-industrial construction; and
6) housing for the elderly.
Firms are now moving to computerization. Computers allow
the firms to cut their costs with better monitoring and recording
of expenses and materials. It also enables small firms in the
single family housing construction industry to design homes using
personal computers. In general, these uses of the computer allow
firms to be more efficient and productive and thus enables
greater profitability in the long run.
Another opportunity in the single family housing
construction industry is the possibility of entering into the
remodeling and rehabilitation markets. These markets also
include additions on to existing homes as well as remodeling
newer homes and rehabilitating older houses. As new homes prices
increase and interest rates for mortgage loans remains above 10%
many are reluctant or unable financially to move. The bright
spots for remodeling and rehabilitation is that they are less
susceptible to the fluctuations of the business cycle and it
offers an affordable alternative to the home owner.
Custom home building allows the builder to get away from the
speculative market. In the custom home market segment, the
builder has a buyer and knows that the home is not going to sit
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for a long period of time without being purchased. Funds can be
channeled into the project with less fear of a smaller return of
the project.
Commercial-industrial construction also offers another
opportunity. This offers unique opportunities for the builder to
diversify because the peaks of this market are not as high as
residential construction and the troughs in the business cycle
are not quite as low. Cyclical declines in commercial-industrial
construction tend to lag declines in single family home building
by several months. This opens avenues of possible profit when
the home building industry is not performing will.
Townhomes are now becoming more popular. These offer buyers
a more affordable and lower maintenance alternative especially
now that free time away from work is decreasing. It also offers
buyers modern design and also an urban lifestyle. Townhomes are
generally built in locations that provide convenience for its
owners. Demand should continue to increase for townhomes.
Lastly, housing for the elderly is now becoming more
important than ever with the increasing numbers of Americans
approaching retirement. Needs for these individuals range from
small, easily maintained homes to large care facilities that
offer its tenants recreational, dining, and nursing facilities
Since this area of building is fairly new and specialized, may
alternatives await possible development. Trends in this area are
most likely to include nursing and mobile homes, retirement
residences and communities, and possibly retirement hotels.
THREATS
Many threats were found that could have a major effect on
the housing industry: 1) recession; 2) high interest rates; 3)
rising unemployment rates; 4) remodeling market; 5) changing
demographic patterns.
The most significant threat is that of a national recession.
The U.S. economy is presently in the process of slowing down
resulting in people having less money to spend on housing and its
associated costs. In addition to the current recession,
relatively high interest rates in general, and mortgage rates for
30 year fixed rate mortgages in particular are troublesome to the
industry. People are less willing to move and obtain the
necessary funds due to the higher cost that they will have to
incur.
Rising unemployment rates also evolve from a recession.
More people are currently out of work which results in fewer
people having the money to take on large investments such as
building a new home. Fluctuations in the stock market due to
tension in the mid-east are causing people to take a more
conservative approach to how and where they invest their money.
The booming remodeling market is also a mild threat to the
industry. Many firms are moving in this direction to help avoid
the losses that are presently being noticed in single family home
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building. Some firms however may not be able to enter this
market due to limitations within the firm and the market may also
become saturated with the influx of companies moving in this
direction.
The final threat to the singly family housing construction
industry overall focuses on the changing demographic patterns of
new home buyers. Two major patterns which could affect the
single family housing construction industry include the
decreasing size of the average family and the aging of the
population in general. With the average size of the family
decreasing, it is not quite as necessary for many people to
invest in a home when all of the extra space would not be needed.
Housing facilities such as townhomes, apartments, or condominiums
are a much more viable alternative for their money. As the
population becomes older it may be less likely to move due to the
hassle that is involved and some will begin to move into
retirement facilities for better care and less work for them.
The only hope that may be present is that the older people the
people are, the accumulation of wealth that is saved up
increases. There could be possibilities of buying a second home
or moving to warmer climate. With the children of these people
having moved out, there is less a desire for a large amount of
space and an increased interest in single story (ranch) homes
with lower maintenance.
STARTUP
The two most important questions to ask before starting your
own business are: Do you have the necessary skills and technical
knowledge in the area of your business? and is there a need for
your service or product? After having both of these, you will
most likely next need assistance on starting and running a
business. The small business entrepreneur's biggest ally is the
Small Business Administration. You can seek advice, assistance,
and information on every aspect of the business, but what they
are not there for is to set up and run your business. The first
thing you should do before going to see them is to set up a
business plan. This plan should include goal and objectives with
step by step procedure on how you plan to reach these goals. A
typical business plan is outlined in EXHIBIT B.
FINANCING
Equity Capital
A small firm, like any other firm, needs equity capital to
start up its business. To banks, new, small businesses are
considered a high-risk for them to offer loans to. It is
difficult to obtain start-up loans (Equity loans) from financial
institutions, but it is not impossible. In most cases where the
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institution grants a loan, the entrepreneur must present several
pieces of information to the institution. He/she generally must
put up approximately 50% or more of the starting capital, must
have an excellent credit rating, must be knowledgeable of the
business the entrepreneur is venturing into, and needs to be able
to present a solid business plan with projections of cash flows
for tat least the first year. If the bank fails to be able to
offer the loan, the Small Business Administration (SBA) can be
approached for a loan. However, the majority of the loans that
are granted by the SBA are for existing and successful small
businesses. If the SBA is unable to grant a loan, alternative
sources of equity capital for new, small businesses are private
such as:
1. Personal loans, savings, and investments.
2. Life insurance loans
3. Second mortgages and/or refinancing of assets including
real estate.
4. Loans from friends and relatives.
5. Credit unions which you must belong to in order to
obtain the loan.
6. Also having people become active or silent partners to
invest their money into your business.
Working Capital
Working capital is needed for the firm to be able to
continue its day to day operations. It is basically obtained in
the form of short-term loans. At this stage of the business, it
is easier for the small firm to obtain funds from financial
institutions because the firm has a proven track record for the
institution to base its loan decision on. It is therefore is
less risky for the bank to grant the loan because it can acquire
assets of the firm in case of default on the loan. Some sources
that are available to the small business are:
1. Commercial banks and other financial institutions.
2. SBA loans.
3. The possibility of leasing instead of purchasing.
4. Accounts receivable loans.
Growth Capital
Growth capital is needed to help the small firm to continue
to grow in the future. It can help the business to increase
profits and cash flows as well as help the business to increase
profits and cash flows as well as help on cost reduction. Most
growth capital is obtained in the form of long-term loans. These
loans are received by pledging fixed assets as collateral for the
loan. Some sources of growth capital are:
1. Commercial banks.
2. Life insurance companies.
3. Mortgage lenders.
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4. SBA loans.
5. State and local; development corporations.
6. Small Business Investment Companies.
Financial Planning and Control
In order for a small firm to stay alive, it must plan and
control its finances. A good financial plan is needed to obtain
the necessary financing. A sound business plan can first help to
determine how much equity capital (Start-up capital) as well as
working (Operational capital) and growth capital. A Cash Flow
Projection chart (Refer to Exhibit C) can help to determine how
much capital is needed to start and operate the business. The
six month chart should also be expanded to a yearly format to
provide a better analysis. Cash flow is the balance of incoming
and outgoing cash flows at the end of a specific period of time.
The goal in cash flow analysis is for the ending cash position to
be positive. If the ending cash position is not positive and the
projection was completed in advance, changes can be made to
correct the situation.
One other basic but necessary statement that needs to be
used to indicate flows of cash and other items is the Balance
Sheet (Refer to Exhibit D). The Balance Sheet provides a
"snapshot" of the present position the firm is in. This Balance
Sheet can be compared to previous sheets to see the direction in
which the firm has gone. Future projections should then be made
on where the company wants to be financially after a specific
time period and how it wants to get there.
STATEMENT ANALYSIS
Analysis of the Robert Morris Associates Annual Statement
for small firms in the single-family home construction industry
in 1989 was done to determine how the small home builders are
positioned financially. Small builders in the Robert Morris
Statements are defined as those that have a contract revenue size
form zero to one million.
Assets
The four main categories of assets for the small firm in the
construction of single family housing were studied. They are
cash and equivalents, inventory, total current assets, and fixed
assets. All are represented as a percentage of total assets.
Cash and equivalents represented 10.5% of the small home builders
total assets in the fiscal year 6/30/88 to 3/31/89 as compared to
the industry average (all home builders) of 10.3%. Inventory
accounted for 24.2% of total assets for the small firm compared
to 30.1% for the industry. Total current assets for the small
builder represented 69.4% of the total asset while the industry
was at 75.3%. The net fixed assets were at 19.6% for the small
construction firm compared to the industry average of 13.9%.
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Liabilities
Four main categories of liabilities were also analyzed.
They are short term notes payable, total current liabilities,
long term debt, and net worth. All are represented as a
percentage of total liabilities. Short term notes for the small
business in the construction of single family housing represented
30.1% compared to 25.8% for the industry. Total current
liabilities for the small firm were at 54.1% compared to the
industry average of 58.7%. Long term debt for the small builder
averaged 10% while the industry was at 10.7%. Net worth was at
34% of total liabilities compared to 27.4% for the industry.
Income Data
Currently small builders in the construction of single-
family homes are averaging 26.6% gross profit while the industry
is at 18.9%. Operating expenses are at 20.3% and operating
profit is at 6.3% while the industry is currently at 14.6% and
4.3% respectively.
MARKETING
One of the first steps to writing up a marketing plan is to
acquire information on:
- customer characteristics
- the size of the total market
- other firms in the industry
- assessment of your competitors as well as your own
strength and weaknesses in the marketplace
After this a marketing plan detailing the methods of selling and
advertising that you want to use, and that are within your budget
can be written up.
The most important thing to remember in marketing your
product, no matter what business you're in, is to know your
target market. Do you want to design and build houses for low,
middle, or high income buyers? Do you want to target the yuppie
age, baby boomers, or the elderly? Do you want families,
couples, or singles? Whether or not the demand is out there for
your market will help to determine your target market and whether
or not it needs to be adjusted. Builder magazine conducted a
study of 1715 new home buyers in the fall of 1990 to determine
what type of buyers are in the market for the 90's. The
statistics from this study show that:
-- the majority are baby boomers, with an average age of 39
-- 65% are dual income households with an average yearly
income of $64,000
-- 42% are couples with kids, 40% are couples without kids,
and the rest are single.
-- 78% are current homeowners
-- 84% want single-family homes
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As far as the industry is concerned, according to the U.S.
Census Bureau, in 1987 there were 120,469 builder firms, and 45%
of them were small firms, which was determined by the number of
housing starts per year with small firms having between 1 - 25
starts.
There are many modes of marketing and selling in the
building industry. Over the past few years there has been a
growing role of real estate agents and brokers to handle the
selling. Another method that is popular is the use of lavishly
furnished and landscaped model homes. The two methods are for
the most part utilized by the larger firms. The marketing budget
for small firms is generally tighter but there are still very
productive methods. Some examples are to print high quality,
appealing brochures to send out to prospects as well as mailing
out newsletters. These could include such information on prices,
new plans, special incentive programs, and the community.
Another effective method is to advertise in the real estate
section of daily newspaper. In the study by Builder magazine,
mentioned earlier, the top three sources of where buyers look
were listed as:
Real estate section of the newspaper (61%)
Home buying tabloid (58%)
Real estate agents (56%)
MANAGEMENT
The owner of a small business firm, no matter what industry
he is operating in will have to assume several, sometimes all, of
the positions in the company. Granted, wearing all the "hats" in
a business is overwhelming, which is why the average small
business home builder employs at least two others. How many
employees you will need to hire will depend on how many houses
you plan to build. If you plan on only building only a few
houses, you may be able to handle most of the work yourself, or
with one other person. As the number of starts you have
increases, so will the number of employees you'll need to handle
day to day operations. A receptionist/data entry clerk can
handle daily office tasks, such as invoicing, paying bills, and
cost controls. This person could also be in charge of the
marketing aspects of the business, such as promotional mailings
and speaking with prospects. If you have a number of projects
going on at the same time it would be wise t have a construction
supervisor to oversee these projects since you couldn't be there
at all times.
Basically, the number of employees you hire and how you
manage them is an individual decision; there is no set way. Two
owners of small home building firms were interviewed and one
owner employed three while the other employed thirty two. Take
into consideration the number of starts you're planning, how much
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time you want to devote to your business, and how easily you'll
be able to "let go" of some of the business control and trust it
in the hands of others.
DESIGN/CONSTRUCTION
During the past ten years, the design of homes took on major
changes, toward larger and fancier designed homes.
Interestingly, if the houses of the eighties weren't elaborate
enough, the buyers of the nineties are expecting even more.
Custom housing is becoming a big trend for nineties. In the
survey of buyers in the market today by Builder magazine,
discussed earlier, the two major factors buyers are looking for
are expanded, more custom master bedrooms and family rooms. They
also would by willing to pay more to purchase a house with a
sunroom, three car garage, library, home office, or fitness room.
More importantly, they are also considering intangibles, such as
the commute to work or school, the strength of the community, and
the investment potential.
The small builder has a definite edge in this area, as they
are more easily able to adapt to specific requests and changing
trends so they build a fewer number of homes a year. The small
builder has more time to work with the buyer and an architect to
ensure the buyer of a house designed as specifically as they
like. Another advantage the small builder firm has in this area,
is that as mentioned earlier, the majority of their buyers are
from the upper income bracket and they can afford the larger
custom homes are becoming the trend.
Regarding construction, there are at present only a few
technological innovations being used on the industry. Due to
building code restrictions, many construction practices have not
changed, but the three most significant advances for the nineties
are energy efficiency, use of computers (computed aided design
and recording of expenses), and panelization techniques. There
should, however, be an increase in new products, materials, and
processes in the 1990's to help firms operate more efficiently,
at a lower cost, to generate larger profits.
FUTURE OUTLOOK
Some of the future trends that are likely to take place in
the industry are as follows:
1. The remodeling and rehabilitation markets should outpace
the home building industry.
2. The resale market will become tighter.
3. Housing starts will continue to decline in 1990 with
starts slowly increasing in 1991 and 1992.
4. Interest rates should begin to ease and mortgage rates
will possibly ease by 1% to 9.5% in 1991.
5. Inflation should continue to hold steady at approximately
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5%.
6. The cost of labor should continue to increase but new
technologies that have been and will be developed should help to
take the sting out.
7. Second home buying should be a success.
8. It is projected that 1 out of every 3 builders will be
forced out of business by the year 1999.
The current Persian Gulf crisis could also affect the
economy. The National Association of Home Builders feels that a
short war could perhaps force the government into spending and
also to cut the inflation rate which could lead to lower interest
rates and also higher starts for the housing industry. However,
a protracted war could devastate the economy. (Refer to EXHIBIT
E for best, most probable, and worst case scenarios). This is a
wait and see situation. Builder magazine reports likewise that
this slump should not be as bad as the last two that faced the
industry. It is also felt that the recession in the industry
should not end anytime in the near future.
CONCLUSION
With the current status of the economy, small business home
builders have some alternatives to evaluate to keep their
business afloat. Times, in the near future, are going to be
tough for firms to survive. The best possible opportunities
should be engaged at once to cut down on the losses. Due to the
current state of the industry, economy, and the Persian Gulf
crisis, it is suggested that prospective small business home
builders wait on entering the market. Depending on which course
the events take that effect the economy and industry, such as the
Persian Gulf crisis, a decision could be made as to whether or
not a new firm should enter the market.
EXHIBIT B
Business Plan
A business plan is a valuable management tool for the
development, operation, and expansion of your business. It is
also essential when you are "selling" your company to investors
and lenders.
Planning involves determining the firm's objectives and the
methods (policies and strategies) that will be used to achieve
them. It also requires preparation of a schedule that
anticipates when various goals will be met. Social and economic
climates should be forecasted to evaluate how available resources
will be used to attain goals under various conditions.
COVER SHEET
Includes the business name, address, phone number, and
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date of the plan.
EXECUTIVE SUMMARY
This tells what the plan is, its major objectives, how those
objectives will be accomplished, and expected results. It is a
brief (one-page) overview of material from other sections of the
plan. It should include a description of your business,
marketing strategy, financial strategy and projections, and the
management structure. Although the executive summary is
presented in the beginning of the plan, you may choose to write
this last, after the entire plan is completed.
TABLE OF CONTENTS
Usually a single page listing the major topics and subtopics
of the plan.
HISTORY
Includes a background of principals or company origins, as
well as a background of the product or service. Include also a
description of the corporate structure.
DESCRIPTION OF THE BUSINESS
Include information on your type of business, what market
you serve, your differential advantage over competitors, and the
present status of the business.
DEFINITION OF THE BUSINESS
Includes information on the target market, its present size
and growth potential, and the percent of the market you have now
or would like to have. An analysis of the competition should be
included, as well as your strategy for attracting and keeping
your segment of the market.
DESCRIPTION OF PRODUCTS OR SERVICES
Define what is to be developed or sold.
MANAGEMENT STRUCTURE
Describe your business and management experience, the
organizational structure with a brief description of who does
what, employee policies, and other management resources or
support staff (lawyer, accountant, etc.). It would also be
beneficial to include a resume and organizational chart.
OBJECTIVES AND GOALS
Discuss objectives in the areas of revenue forecasts,
financial goals, and marketing plans.
FINANCIAL INFORMATION
Several statements should be presented:
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- Source and Application of Funds Statement
- Capital Equipment list
- Current Balance Sheet and Income Statement
- Break-even Analysis
- Projected Balance Sheet, Income Statement
- Cash Flow Projections
APPENDIX
- Personal resumes for all principals
- Personal financial statements for principals
- Letters of recommendation or endorsement
- Copies of legal documents (leases, contracts, etc.)
EXHIBIT C
CHECKLIST 19
Cash Flow Projection (format for six months)
JAN FEB MAR APRIL MAY JUNE
Cash In
Cash Sales
Credit Receipts
Other
1. TOTAL IN ---- --- --- ---- --- ----
Cash out
Inventory Supplies
Rent
Utilities, Phone
Payroll and Related Taxes
Administration
Marketing & Sales
General Supplies and Rentals
Taxes & Licenses
Insurance
Professional
Other Operating Expenses
Capital Expenses
Loan Repayments and Interest
Loans, Advances, Distributions
Owners, Others
2. TOTAL OUT ---- --- --- ---- --- ----
3. Cash flow for month
(1) minus (2) ---- --- --- ---- --- ----
4. Starting cash position ---- --- --- ---- --- ----
5. Ending cash position,
(3) plus (4) ---- --- --- ---- --- ----
SOURCE: STARTING AND WINNING IN SMALL BUSINESS, 1982.
EXHIBIT D
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BALANCE SHEET
AS of ______________________________
ASSETS
Current:
Cash ________________________
Short-term investment ________________________
Accounts receivable ________________________
Prepaid expenses ________________________
Long-term investments ________________________
Fixed assets ________________________
Variable assets ________________________
Other assets ________________________
Total Current Assets $________________________
LIABILITIES
Current:
Financial institution loans ________________________
Accounts payable ________________________
Long-term notes payable ________________________
Income taxes payable ________________________
Accrued liabilities ________________________
Notes payable
Total Current Liabilities $________________________
Capital start period ________________________
Add income from period ________________________
Less withdrawals from capital during ________________________
the period
Total Capital at End of Period ________________________
Total Liabilities and Capital $_______________________
ADAPTED FROM R.D. SMITH, GETTING MONEY, 1981.
REFERENCES
Anderson, Carol, "80's Retrospective", Builder, January 1990.
Baker, Lawrence, Clifton Development, Cincinnati, Ohio
Baumback, Clifford M., Basic Small Business Management, Englewood
Cliffs, New Jersey, Prentice-Hall, Inc., 1983.
Bradford, Susan, and Binsacca, Richard, and Jones, David,
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17. Page 17 of 17
"Attached Homes," Builder, August 1990, p. 75-88.
Delaney, William A., So You Want to Start a Business, Englewood
Cliffs, New Jersey, Prentice-Hall, Inc., 1984.
Donohue, Gerry, "Fighting Over a Shrinking Market," Builder, July
1989, pp. 184-187.
Dow Jones New Retrieval System
Fletcher Homes, Cincinnati, Ohio
German, Brad, "How Low Will We Go?," Builder, July 1989, pp. 42-
47.
German, Brad, "Welcome to the 90's," Builder, July 1989, pp. 184-
187.
Harrington, Jeff, "Zaring readies for a Slowdown," The Cincinnati
Enquirer, Thursday, October 11, 1990, pg. B-10.
Housing America-The Challenges Ahead, The long range planning
report of the NAHB, 1985, pp. 113-119.
Light, Larry, "A Slump That's Built to Last," Business Week,
January 8, 1990, pg. 122
Mucciolo, Louis, Starting and Winning In Small Business, New York
City, New York, Arco Publishing, 1982.
"NAHB Outlook," Builder, October 1990, pg. 69.
Resnik, Paul, The Small Buisness Bible, 1988
Robert Morris Assoiates, RMA Annual Statement Studies,
Philadelphia, PA., Robert Morris Associates, 1989.
Smith, Richard D., Getting Money, Ontario, Canada, Green Key
Press, 1981.
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