Jose Bardelas Global Markets, Economic and Analysis Reviews.

Global Markets: A Window on the World Economy

Jose Bardelas World Economy Issues By Scott Pearson.

Expectations drive the market. Every stock price is driven by what people expect the company to do. That’s why all the talk about a strong or weak economy has such an impact.
But those aren’t the only expectations moving us. We’ve seen the impact of war and terrorism worries on markets and the impact of SARS concerns on Asian markets.

Markets move on a combination of expectations and reality, and every reality leads us to new expectations. Great earnings? I expect the company will earn more. A sales slump? I expect the company to struggle next year too. The question is: if all decisions are made on expectations (and they are), how can things turn around? If our expectations are so colored by past events, we’ll expect the future to be as grim as the past, and nothing can ever change, can it? Ah, but we have long memories. Ask yourself: what would it take for you to change your outlook? What would it take for all of us to change our outlook? The answer to that last question effectively tells us when the market will turn, because when everyone is upbeat and buying, the market will fly.

Consistently rising earnings will change expectations, but how much positive news is necessary before the turn begins? Will some companies turn before the market? Consider Constellation Brands or Fortune Brands, two of our recommendations that haven’t seen any drops, and in fact are defying estimates of weakness. Should we expect those shares to rise based upon their own positive trends, or will the market turn first?

The answers aren’t simple or uniform. There’s no answer, only conjecture. We can make estimations. In the past, we’ve seen market turnarounds led by small stocks or led by big stocks, led by technology, or led by consumer goods. So, as we near the turn, you’ll likely hear all kinds of suggestions for where the upturn will begin. Preserve your sanity with a little skepticism. I suspect the first to turn will be the ones that have had the best results for a long time. That’s precisely why we’re so aggressive in our recommendations of companies like Fortune and Constellation. If they are successful in maintaining their records, this type of firm will rise sooner than the rest.

It doesn’t matter whether the companies are big or small, techie or traditional. The best companies will start the upward move. Without support from a strengthening economy and a rising market, even these success stories can’t rise far. That’s why expectations of the broader economy are important. That’s where we’ll have to wait and see. Expectations should rise now with the ending war (with stock prices and consumer spending following). Expect some good news for a while. Surprises from companies like McDonald’s will also provide a boost. Surprises shake people out of expectation ruts. When we’ve become too negative (or too positive), a shock can wake us up to the change.

True Cost Economics

Jose Bardelas True Cost Economics By Soni Pitts.

What’s the price of your lifestyle? Is your living room furnished in blood, or your wardrobe woven of pain and suffering? How about your body – are you fed with diminishment and despair?

Every piece of merchandise we buy costs a set amount of work, energy and resources. What we pay for it in cash may – or may not – reflect what went into its making. If we buy cheaply, at a discount store where prices are kept artificially low, then the price is paid by others who have to suffer to make up for the portion of the price we refused to pay. If we allow others to negotiate for costs that leave too small of a margin for fair wages or adequate health concerns, then the price is paid by the destablization of the land and the people and the societies that produce it.

But our bargain hunting gets us nowhere. In the end, we pay the full price, with interest – in wars brought about by people pushed too far, by terrorism and riots sparked by those who feel (often rightly) that their people and their land are being drained of life so that the rest of us can buy or drive cheap toys that we don’t even appreciate, by environmental degradation that affects us all perpetrated by those simply too powerful to be stopped or too poor to care as long as they can eat and live. We must all face the inevitable fact that human suffering doesn’t stop at the suffering human in question, but ripples out to all of us.

No matter what the actual price tag says we pay in full measure for what we buy and use, either in cash or in kind. By choosing to buy less and choose more wisely, we allow ourselves the financial breathing space to afford the better, fairer-priced option, and we step away from supplying the negative cycles of economic hardship. Our actions heal rather than harm, support rather than undermine. And in the end, by working together we can give birth to positive, more equitable cycles where everybody benefits fairly and justly and where everyone gets a chance to demand as well as supply.

Better Marketing in a Bad Economy

Jose Bardelas Marketing in a Bad Economy By Michael Sieber.

A friend and I were talking the other day about the economy and how businesses can better market themselves during a slowdown. He told me a story that I think is relevant to businesses no matter what the economy is like.

A flower shop recently expanded and put a store in our little downtown area. My friend (an advertising sales rep) stopped in to chat and asked how the business had been going. The owner said that things were fair, but it wasn’t going as expected.

So my buddy asked her what kind of marketing she was doing. Well, she was doing everything she could. She ran an ad in the paper, but it didn’t get much response.

That’s it: one ad and no response.

My friend then asked her if she was planning any grass roots marketing. The shop owner had no clue what he meant by that, so he explained.

You’ve got the courthouse right across the street. There are handfuls of men who work there – men who are “too busy” to remember that Valentine’s day is coming up. Why aren’t you going over to the courthouse with coupons for 10% off a dozen roses? Or better yet, let the guys know that you can have a gift basket containing flowers, candy, teddy bear, and a card ready to take home to the wife or girlfriend when they get done with work on Friday.

The shop owner was blown away. That was a great idea! She’d never thought about that.

And therein lies the problem that many struggling businesses face. They think that marketing begins and ends with putting an ad in the paper or on the radio, and if that doesn’t work, they throw their hands up in frustration because…well..they’ve done everything they can do.

They neglect to see the opportunities that exist if they get out and put themselves in front of their potential customers rather than waiting for their customers to find them.

Finding a Market Opportunity in a Poor Economy – Using an Industry Analysis

Dr. Jose A. Bardelas Jr. MD Industry Analysis By Cheryl Davisson Gracie

“I just want to sell and make money! I don’t need to spend my time collecting all that information about market trends in the industry. That’s for big companies! I just need to get out there and sell.”

Sound familiar?

Industry research takes time, sometimes a little money, and may often turn up information that brings our business idea or strategy into question, destroying our dreams of profit. But, that is the reason we perform the research. A review of your industry is your first step to understanding whether or not your ideas are worth pursuing.

Why perform industry research?

No one wants to spend time planning for a business that is unlikely to succeed. It is a waste of time.

Understanding your industry helps you identify trends in the markets that are likely to impact your business. Will there be a shortage of supplies and other resources that will drive up costs? Or, will there be a surplus that will drive down costs? Will there be an increase in demand for goods and services making it relatively easy to find customers? Or, will demand likely decline? Understanding the trends in the markets is a first step to identifying a market opportunity.

Understanding your industry can also provide valuable insights into the behavior of competitors and the challenges your business will face. Is the industry old and established making it difficult for a new business to get started? Or, is the industry young and growing with new businesses starting up all the time? What companies currently dominate the industry? Are these companies so large and entrenched that a new business will find it difficult to start-up and survive? Or, is the competition small and diffused making it possible for a company to distinguish itself?

It is having the answers to questions like these that makes it possible for you to develop strategies to cope with challenges in the market and effectively compete.

Where can you find information about your industry?

The good news is that the information you need to obtain is for the most part readily available on the Internet for free (or for a nominal cost). Most public libraries subscribe to online references that publish summaries about industries which provide a quick overview (which may be all that you need). Additional information can be obtained by checking various census reports as well as other government publications that provide information about industries. Often, you can find useful information about how market leaders view the industry and markets in their annual reports. Most annual reports can be downloaded on the Internet for free. Finally, trade or professional organizations often conduct research about their industries to share with their members.

Using industry information to identify a market opportunity

In order for a business to succeed in today’s economy, you must find customers with money to spend. Even a quick study of your industry can reveal markets where demand is growing among particular types of customers and where the competition is not intense. Even if it doesn’t, its good know such markets do not exist before you spend your time and energy, not to mention your savings, planning a business around an idea that has little chance of succeeding.

Corporate Clothing and Branding in Tough Economy

Dr. Jose A. Bardelas Jr. MD  Branding in Tough Economy By Helen S

It is not surprising to see that more businesses are cutting back on their marketing expenses this year. The current economy situation leaves us thinking twice about where our marketing dollars are going to, and how we can save without compromising the overall outcome of our advertising efforts.

Unfortunately, the marketing (and branding) budgets are the ones to shrink first, and your job as a marketer is to make a decision on where and how to spend your money in order to get the highest return on investment.

Luckily, there have been definite positive changes in the branding department for those who are ready to take the risk and, more importantly for those who have a plan. As more companies are pulling out their branding efforts, you, if continuing on the right path can really stand out, as there would be less players to compete with. So, by not slowing down, and by gaining the momentum, you can really get ahead in the branding game. This is where your branded corporate clothing and accessories play their strongest parts.

Three easy steps to get it right in the tough economy:

1) Identify your audience and tailor your clothing for them. Narrow it down to hit the sweet spot. This will help you to decide what type of clothing you should go with. If your budget is tight, and you could go with only one piece of branded clothing; make sure it is the right one. For example if your target audience is into golf, do your research to see what is the hottest item for golfers this year, and go with it.

2) Clothing with a purpose. There are many options to choose from when it comes to branded corporate clothing. T-shirts, jackets, dress shirts, and when you are aiming to save, you want to choose one piece that would not only be worn often, but also could complement other pieces of your employee’s wardrobe. For example a simple, well-made raincoat or a waterproof jacket could be a good choice for the fall.

3) Branded Accessories. Umbrellas, baseball caps, luggage are always the winners when it comes to branded merchandise. Their longevity and durability have proven to be the best selling points for marketers when choosing a promotional material.

Rising Gas Prices Fueling the Virtual Economy

Dr. Jose A. Bardelas Jr. MD About Virtual Economy By Yvonne McCoy

As gas prices continue to spiral upwards, many employees are counting the cost of getting to and from work. For some who commute long distances, it could almost seem like an employment tax. They have no choice but to drive to get to their jobs, and yet they have seen gas prices double since 2002. Sure public transport is an option, but not for everybody. Even car pooling is not an option when you live out in some of the more rural areas and have to commute in to the city.

For many people, the answer has been to give up the long commute times and associated fuel costs and look at work from home opportunities. Some have successfully persuaded employers that their role can be carried out at least as well from their own home offices. Still others have not only given up the commute, but also corporate life as they pursue their entrepreneurial dreams and start their own home based businesses.

As more and more home based businesses are starting up, so is the need to staff them. Business owners who can not or do not wish to directly hire people can now have their business staffed by outside contractors who work virtually from their own home offices. They can contract a graphic designer to design their logo, a web designer to build their website, a book keeper to keep their accounts in order, and even a Virtual Assistant to take care of their administrative and marketing needs.

Web designers, computer programmers, graphic designers, and book keepers, are just a few of the occupations leading this trend towards working virtually from their own home offices. One of the fastest growing groups of seasoned professionals who have left the corporate world to become entrepreneurs is Virtual Assistants. “Before becoming a Virtual Assistant, I used to commute 90 miles a day to and from work” says Yvonne McCoy, owner of Swift Office Services LLC. “When I consider how much that would cost me in gas now, and factor in child care costs, it really starts to look like a very small return for a lot of time away from home. Since starting my own business, I feel as though I have got my life back and am no longer having to pay for the privilege of going to work”.

As this trend towards entrepreneurialism and home-working continues, it is likely Virtual Assistants like McCoy will become highly sought after. They are undoubtedly a great solution for the small business owner who can not afford to directly hire an assistant and provide them with a desk, computer and all the paraphernalia that goes with an employee. It really is a win win situation. The business owner gets the services of a top notch personal assistant, while she gets to stay at home and complete projects while balancing work and family. The business owner pays only for time on task – the Virtual Assistant buys all her own equipment, and sets up her own office.

Global Economy Creates Need For International Business Pros

Dr. Jose A. Bardelas Jr. MD Global Economy By Terry McDermott

The increasing globalization of business has created a demand for MBA graduates with a specialization in the international management of business. Many institutions, including several accredited universities, offer the opportunity to earn an international MBA online. Online International MBA programs are ideal if you are a working professional who may not have time to attend traditional, on-campus classes, or if you just prefer to have the flexibility to work when and where you want from the comfort of your own home or office.

An online international MBA program will offer a solid foundation in modern business principles and practices such as critical thinking, and decision-making, with a focus on the management of business internationally. You will learn about the financial and operational structures that enable business to operate in a global environment, and the perils and opportunities that arise from the conditions, intense competition and economic uncertainty that exist in a global market.

Online International MBA programs are designed to meet the needs of the working professional, and provide a quality graduate education for those who seek an alternative to traditional, on-campus study. By working toward your international MBA degree online, you can control when and where you attend class, and often how long it will take you to complete your degree. The globalization of business has increased the need for individuals with this kind of specialized knowledge to manage international business affairs effectively. An online international MBA, though no less demanding than a traditional on-campus education, can provide you with the knowledge and skills to be a future manager in international business while being able to stay committed to your current professional commitments and responsibilities.

Raising Capital in Today’s “New Economy”

Dr. Jose A. Bardelas Jr. MD Raising Capital By Lee Traupel

We’ve helped a number of clients develop business plans and raise capital from “angel” investors, corporate entities and venture capitalists during the last 6-8 years. It’s always a daunting process that can be full of pitfalls and require a tremendous amount of work – but it can be done! Here is some perspective gleaned from years of experience.

The most important rule for raising capital to consider is: it’s never easy to raise capital when you need to! Meaning, investors are inherently risk aversive, can be very picky (a real understatement!) and they are looking for the best deal with the greatest upside and minimal risk.

Rule number two – don’t raise capital! Self fund your company (called bootstrapping in entrepreneur-speak) by finding customers that will purchase your products and services. This enables you to involve your most important business asset in your business from day one – customers!

Rule number three – use the “FAF” or “VMC” methods. Raise seed (early stage) money from your friends and family and/or if you are really committed, pull some cash from a Visa or MasterCard. These methods can and do work for many entrepreneurs – be aware it can be very painful on the back end if your company does not make it!

Angel investors can add so much to your company – they can bring “intelligent capital” to the business. Not only do they invest capital but will very often take an interest in helping you grow the company by taking a Board of Directors seat and/or temporarily assuming a senior management role.

In my experience finding and recruiting a blue chip management team with advanced degrees and a strong corporate pedigree can sometimes kill a startup as quickly as no cash or revenue – yes, they look great in your business plan and venture capitalists love a “strong team.” But, you need “fly by the seat of their pants” manager/leaders who don’t need to grind five sets of scenarios (analysis paralysis) before they can take action – hire entrepreneurial types who’ve excelled in small companies.

Dealing with venture capitalists can be a significant challenge that is fraught with risk and no upside! Remember, they are highly skilled at the entire process, in most cases they’ve done it hundreds of times before. So, your on their turf when you step into this arena and you better do your homework properly (market size, revenue projections, cost of sales, marketing plan) and/or consult with a consultant, attorney or “angel investor” who has been through the process before to give you guidance.

Round two in dealing with venture capitalists (assuming you are one of the 1% that submitted a business plan and/or were referred to them by another “VC approved” entity) can also be fraught with risk – know how to value your company (equity for capital), look at comparable deals in the marketplace and be prepared to negotiate hard and to give up more now than in the last 2-4 years.

Round three in dealing with venture capitalists or corporate investors. Don’t (never!) be so desperate for capital that you agree to turn over the reins of the company if you don’t meet specific performance milestones based on a first or second round of funding. There are too many variables in the marketplace for you too control and you’re taking too much risk for not enough upside. If this is the only way you can raise money from this venture firm or corporate investor then walk away, in the end you will be better off.

Here are some “cliff notes” on how to write a business plan – there is no set formula other than covering the basics about your company; i.e. technology, market analysis, marketing/business development, competitive analysis, management team and a five year set of (detailed by month from startup to year three) financials. The Executive Summary (first 3-5 pages) is the most important, as it is a summary of the entire plan and most investors read this carefully and scan the rest of the business plan.

Don’t get caught in the trap of endless rewrites based on investor feedback – put your plan through one or two reviews by your BOD members and or seasoned execs that will give you honest feedback. Once the plan has been reviewed and approved then go to market with this iteration and stick to it – investors should be investing in you ultimately, not an artificial business plan that more often than not is out of date by the time you get to market.

Success Through Your Economy

Dr. Jose A. Bardelas Jr. MD Economy Info By Dorothy M. Neddermeyer, PhD

When you are resourceful in your endeavors you can look over the capital you have available to you in the many aspects of your life. You will recognize that your resources are limitless and you might feel the weight of abundance pressing you to make good use of them. When you are creative in the manner in which you manage your time, energy and money, your plans will be met with great success. Using your skills and talents with life’s uncertainties inventively and frugally can help ensure that you increase the value of your economy.

Attaining and maintaining success is easy when you are willing to employ a measure of economy in the manner in which you utilize your resources. Many people become star struck as his/her level of prosperity rises, and consequently she/he might believe that there has been a license granted to be free with the accumulated assets. Yet, your continuing success is dependent on your ability to think and act judiciously and thriftily when dealing with the blessings afforded you by the universe. The world’s third wealthiest person, Warren Buffett, models this philosophy as he still lives in the same modest (by most billionaire’s standards) house he purchased for $31,500 in 1958, complete with clothesline in the backyard.

When you are choosy in all areas of your life, you are more apt to hone in on those choices that will both enrich your experience and help you build a strong resource foundation that will eventually protect you in lean times. Your inventive approach to the distribution of your assets will help you preserve the security you worked hard to attain.