The Reality Business

Archive for September 1st, 2010

Perhaps, the fact that forex trading is potential to be profitable investment could make you open your mind now. This article tries to simplify the ‘complicated technical analysis’ for ladies by speaking about it in the point of view of … shoppers!

How do you feel if you receive text in your mobile telling that this day you can purchase the newest BodyShop perfume 30% lower compared to the price you have checked last week? If you really want it, totally you will purchase it before the promotion last. The text is simply telling you the price change of the perfume. If you invest in forex, let state you have purchased Asian Yen, how you could acquire profit? You should sell it when the ‘price’ of the Yen increases! If you want to invest in Euro, when is the perfect time to purchase and begin investing? When the ‘price’ of Euro decreases! It is simple, right? So how do you know if the Yen is increased and the Euro is decreased? You can know it by looking at forex chart.

Ladies, forex chart basically is the price information about Yen, Euro and other currencies. The chart is provided is line chart, point and figure. When the line is going up, the price is increased, vice versa. How could we determine the ‘price’ in forex market? The price of Yen and Euro should be quoted in other currencies such as US dollar. This is why they call the price as exchange rate. Keep it simple, the exchange rate will be said as JPY/USD or EUR/USD. For example, if the exchange rate is JPY/USD = 0.52, it means for each Yen you can purchase it with USD 0.52. This exchange rate will not be static, it will change from time to time. In rapid changes in political or economic the changes in a day will be more likely to happen a lot.

Begin to get confused now? No need! Forex chart records the changes of the exchange rate daily, weekly, monthly and even yearly. The make it as a combination of dots in line diagram forming a line. You can see that it could be upward, downward and most of the time combination of both. If the EUR/USD is downward, it means that it is now cheaper to purchase Euro, vice versa. If you can draw a line chart for your perfume price, that how actually a forex chart is.

The last lesson for ladies about this chart is how to get this chart? If you want for free, just sit during news time in front of TV, there must be a section for business mentioning the changes in exchange rate. What if you want to know the changes at any time you want, because you don’t want to loss chance to make forex gain. You should install software in your computer, connect to world wide web and get the current updates by easy clicks.

In summary, to comprehend forex trading, you need to know the price of the currency you want to invest. Since that currency should be valued by other currency, the price will be said as forex exchange rate rather than single price like your perfume. Forexc chart will show you the changes of the exchange rate and inform you if now is the time to purchase or to sell your forex. Isn’t it simple?! More about Forex Chart

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Whether you are starting an import business or have an established importing business, it can be a very profitable venture if you have the right financing to grow your business. Imports are defined as: a good that crosses into a country, crossways its border, for commercial purposes; a product, which might be a service that is provided to domestic residents by a foreign producer; or a combination of the two.

Starting or running an import business has never been more profitable because of computers, the internet, and the availability of low cost imports from countries such as China and Mexico. These imports might be resold for up to ten times their cost depending on the competition in your field of operations.

It is essential that you have good, honest suppliers plus creditworthy customers with buy orders for your imports. If you have the right financing, your business can grow exponentially. But how do you finance growth if your own resources or bank lines of credit are not adequate to take advantage of huge opportunities? A combination of buy order financing, accounts receivable financing with inventory financing might be the solution.

Definitions:

Purchase Order Financing

Purchase Order financing is the assignment of buy orders to a third party, a commercial finance company, who then assumes the obligation of billing and collecting. Buy order financing can be used to finance all current and subsequent orders to improve your company’s cash flow. The process works as follows: 1) Your company obtains a buy order for products to be sold another company; 2) A letter of credit might be issued, based on a finance companies’ credit, to guarantee payment to suppliers or factories producing the goods; 3) The order is shipped, delivered and accepted by your customer; 4) The customer receives an invoice for the goods; 5) The Buy Order Company pays the supplier/factory; 6) a commercial finance company or Accounts Receivable Finance Company pays the Buy Order Financing Company after the products are delivered to your customer; 7) The customer pays the commercial finance company for goods received; The accounts are settled and the profit is paid to you.

Accounts Receivable Financing

Accounts Receivable Financing is the selling or pledging of your company’s statement receivable, at a discount, to a Factor, a Commercial Finance Company or to an Accounts Receivable Financing Company who might adopt a risk of loss. You receive a portion, usually 80% to 90% of the grappling value of your receivables in advance of payment from your customers in return for a fee, or interest, to be paid to the commercial finance company. When the commercial finance company is paid by the customer, the appropriate fees are deducted and the remainder is rebated to you. “Accounts receivable financing” is also called accounts receivable factoring, factoring financial services, invoice factoring and cash flow factoring. The terms are used to convey the same meaning.

Inventory Financing

Inventory financing is a loan secured by the inventory of your business. Inventory finance enables import companies to hold more stock without cash flow strain and to generate more sales. Inventory finance is often part of a Buy Order and Accounts Receivable Financing commercial finance package.

These three types of financing can enable an import business to increase purchasing abilities dramatically; you can accept larger orders and grow your business exponentially. You can use your inventory to leverage your purchasing power. You can use your customer’s credit to obtain these three types of financing; and you can use the commercial finance company’s credit to obtain a letter of credit.

The concept of financing your import company with “other people’s money” is part of a innocuous and sound business plan. Add strong product calibre controls, inventory controls, and good bookkeeping to maximize the success of your import company.

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