Starting a business is thrilling, but there’s a lot to figure out.
Do I need to relocate? How will I finance the operation? What kind of insurance will I need?
If you’re in the early stages you’ll need to research and study a lot. One of the biggest decisions is choosing which industry to get into.
A lot of business ideas excite you. You could do a bookkeeping business, start a cafe, or run a clothing store.
There’s a ton of options, but which one is right for you.
Three simple questions will help you narrow your options. Take your time answering and think deeply about them.
Make a list for each question. Then compare the lists. If one item overlaps in all three lists, it might just be the right business for you to start.
What are you good at?
Every person is a complex combination of genetics, upbringing, personality, skill set, and more.
In other words, you’re unique and bring something special to the table.
A lot of people don’t perceive their own strengths. They’re used to their skills and consider them everyday activities.
A gifted singer thinks everyone can hit notes and do scales. A handyman assumes everyone can fix things around the house.
The truth is a ton of people cannot do the things you do.
We don’t see our gifts because we compare ourselves with the best.
Teachers compare themselves to the best teacher they ever had and think, “I’m awful at teaching!”
Writers compare themselves to their favorite authors and think, “I stink at writing!”
Compare your abilities to the everyday person. If you put your gifts in perspective you might realize that you’re actually pretty good at something.
One way to discover your strengths is to ask those who know you best. You might be surprised by their answers.
Another way to find your strengths is to ask yourself what you enjoy doing. What do you spend your time on? Is there a hobby you like?
Remember, you’ll improve your skills with experience and education. The question right now is what are you good at compared to most people.
Once you answer this, you’ll start to see yourself going into certain industries.
What needs can you meet?
Fulfilling a need is one of the pillars of a successful business.
Think about your current surroundings. Are there certain needs that jump out at you?
Let’s say you live in a medium-income neighborhood with a lot of pet owners. There might be a huge need for pet-sitters.
Are there needs that you personally wish were met? Do you wish there was a vegan restaurant around? Do you wish you could hire someone to mow your lawn?
Try to recall past conversations with family, friends, and locals. Do they express needs you can meet?
Maybe they’re tired of bars and wish a brewery would open in town. Maybe they wish their favorite local business had a user-friendly website.
Once you start looking for needs, you’ll start to see them everywhere. Houses need cleaned. Students need tutored. Cars need repaired.
It might be easier to select a business if you find a need first, then find a way to answer that need. Rather than finding a skill, then trying to meet a need with it.
I recommend taking both paths to generate as many business ideas as possible.
What resources are available to you?
One giant factor that will help you choose a business is looking at the resources available to you.
What does your network of friends look like? What industries are they in?
Sometimes you don’t have to create a new business, you can join an existing one and expand it.
Or you can combine talents to create a business. If you have friends with certain skills sets, consider pairing up with them.
Let’s say you’re awesome at repairing cellphones and laptops, but you’re not good at sales. If your friend is good at sales, you could partner with them.
Also, consider your circumstances. If you’re a stay-at-home mother who’s homeschooling, you might want to try making money online.
If you have a great living space, consider starting an Airbnb. Or if you have an awesome car, think about doing Uber or Lyft.
Do you already have materials that can be used for a business? Perhaps you own property. Take some time to think about a business that would thrive on that real estate.
When you take the time to consider what’s at your fingertips, it helps narrow in on the right business for you.
Compare all three lists
Finally, compare your answers.
Is there something you’re good at, that can answer a need, and you have the resources for?
That’s the golden ticket.
That means you have the ability to perform, the potential to make money, and the means to accomplish the task.
What business do you think is right for you?
Ackman’s Hot Streak Continues, Dumps Berkshire, Says ‘We Can Be More Nimble’
Bill Ackman’s hot streak continues. This comes after he announced that his Pershing Square hedge fund has returned an average of 25% this year. It also trounces the average hedge fund return of -7%. Additionally, this reveals that it sold its $1 billion stake in Warren Buffett’s Berkshire Hathaway. The fund first invested in Berkshire less than a year ago and only weeks took a larger stake in the conglomerate.
Completely exiting the Berkshire position surprised many on Wall Street, as Ackman has long admired Buffett as a mentor. He recently said that Buffett had built Berkshire “to withstand a global economic shock like this one.”
It appears that Ackman, like many, may have felt frustrated by the lack of activity from Berkshire during the recent market downswing. Berkshire’s cash balance has ballooned to $137 billion. Many, including Ackman, had likely expected a portion of that cash to be used to scoop up bargains during the late-February selloff. The said selloff took markets down nearly 30%.
Instead, Berkshire stood pat, and that appears to have been enough for Ackman to pull the plug on his investment. While discussing the exit, Ackman said that due to Pershing’s smaller size compared to Berkshire, “we can be much more nimble… and so our view was generally we should take advantage of that nimbleness, preserve some extra liquidity in the event that prices get more attractive again.”
Pershing Square’s success over the last two years had thrust Ackman back into the spotlight. This, perhaps, turned the chapter on a period where he became more famous for his misses than his home runs.
He was invested in Valeant Pharmaceuticals as it collapsed. He also famously squabbled on live TV with fellow billionaire Carl Icahn over Herbalife. Then, he gave a nearly 3-hour-long presentation explaining why he thought the company runs as a pyramid scheme. He finally exited his $1 billion short position at a loss.
Ackman’s current hot streak started last year, when Pershing Square returned 58.1%. This is its best annual return since the hedge fund was founded in 2004. After years of letting others make the firm’s investment decisions, Ackman took back the reins in 2018 with a back-to-basics strategy he learned from Buffett.
He returned the fund to a strategy that invests in simple, predictable, cash flow positive companies. He said, “It’s very hard to lose money by buying great businesses if you pay a fair price. For a while there, we forgot that our main job was to make money, so we woke up, and now we’re back in the money making business.”
Making money is exactly what Ackman did earlier this year. He did so with “the single best trade of all-time,” as what many calls it. He correctly predicted that the coronavirus would wreak havoc on our economy. Because of this, Ackman made a $27 million bet that netted his firm a $2.6 billion profit in less than two months as the markets crashed.
Now, his war chest is full again. It appears that Ackman is ready to buy should asset prices come down again.
4 Ways To Lower Your Mortgage Payments
The number of Americans who have lost their job due to the coronavirus pandemic standing at more than 40 million. With this, many are struggling to pay their mortgage bills each month.
For nearly every one of us, housing is the single largest monthly expense. And unlike kicking a Starbucks habit to save a few dollars every month, your mortgage payment can’t be trimmed out of a budget.
Fortunately, you have some options available to help lower your monthly mortgage payment.
Refinance Your Loan
The Federal Reserve lowered rates back down to zero in late March in response to the coronavirus pandemic. With this, mortgage rates hit new record lows in early May. Bankrate.com is advertising 30-year fixed-rate mortgages as low as 3.5% and 15-year fixed-rate mortgages as low as 2.89%.
The benefit of refinancing at a lower rate is two-fold. The main benefit is with a lower rate on your mortgage, your monthly payment will go down, making it more affordable. The secondary benefit is that with a lower rate, you’ll pay less interest over the life of the loan. This potentially lets you save tens or hundreds of thousands of dollars.
You’ll incur some costs to refinance your loan. So, make sure that your monthly savings are large enough to justify the expense. Additionally, if you’ve had your existing mortgage for a number of years, you’ll be resetting your mortgage amortization back to 15 or 30 years. So if you’ve been paying on your 30-year mortgage for 8 years, instead of having 22 years left, you’ll reset back to 30 years (or down to 15 years if you take a shorter term).
Put Your Stimulus Check or Tax Refund Towards Your Loan
If you still have the $1200 of stimulus funds available, or are collecting a tax refund this year, consider using them towards your monthly mortgage payment. It may only cover a portion of your mortgage or maybe just a month or two. However, using this money instead of dipping into your savings or retirement account is preferable. There are discussions ongoing about a potential second stimulus check, but that may not be until later this summer.
Talk To Your Lender About Mortgage Forbearance
If you don’t have the financial ability to continue paying your mortgage, ask your lender about mortgage forbearance. If granted, this will allow you to skip a few months of payments without becoming delinquent or falling behind on your loan. Before you agree to a forbearance plan, make sure your lender explicitly lays out how you are expected to make up the skipped payments. Some may demand a lump-sum payment for the amount you skipped once your forbearance plan ends. Others may tack the amount onto the end of your loan term. Be sure you know exactly what the lender will do once you enter the forbearance agreement.
Find Out If A Mortgage Modification Is Available
If you find yourself falling behind on your mortgage payments and are facing default, your lender may be able to offer you a mortgage modification. A modification changes the terms of the original loan, such as lowering the interest rate, extending the term, or even reducing the principal balance. Typically, a modification is only allowed when the loan is in default. Therefore, if you are making timely payments and are current on your loan, this likely won’t be an option for you. But if you are having financial difficulties, your lender may be able to modify the loan and prevent you from going into foreclosure.
USDA to Provide $1B in Loan Guarantees for Rural Businesses and AG Producers
U.S. Secretary of Agriculture Sonny Perdue recently announced that the department is making available up to $1 billion in loan guarantees to help rural businesses meet their working capital needs during the coronavirus pandemic. Additionally, agricultural producers that are not eligible for USDA Farm Service Agency loans may receive funding under USDA Business & Industry (B&I) CARES Act Program provisions included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
“Under the leadership of President Trump, USDA is committed to being a strong partner to rural businesses and agricultural producers and being a strong supporter of all aspects of the rural economy,” Perdue said. “Ensuring more rural agricultural producers are able to gain access to much-needed capital in these unprecedented times is a cornerstone of that commitment.”
In addition to expanding eligibility to certain agricultural producers, the changes Perdue announced allows the USDA to:
— Provide 90 percent guarantees on B&I CARES Act Program loans;
— Set the application and guarantee fee at 2 percent of the loan;
— Accept appraisals completed within two years of the loan application date;
— Not require discounting of collateral for working capital loans, and
— Extend the maximum term for working capital loans to 10 years.
B&I CARES Act Program loans must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.
USDA intends to consider applications in the order they are received. However, the department may assign priority points to projects if the demand for funds exceeds availability.
USDA announced the expanded B&I CARES Act Program authorities in a notice published in the May 21 Federal Register (PDF, 217 KB). Program funding expires Sept. 30, 2021.
Eligible applicants may contact their local USDA Rural Development State Office in the state where the project is located.
USDA is developing application guides for lenders and borrowers on the B&I CARES Act Program. The agency also will host a webinar to provide an overview of program requirements.
To register for the webinar to be held at 2 p.m. Wednesday, June 3, visit: globalmeetwebinar.webcasts.com/starthere.jsp?ei=1324161&tp_key=6067315417.
USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit: www.rd.usda.gov.
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