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Archive for the ‘International Business’ Category

International trade requires macroeconomic stability in the host country. Ideally, the economy of the host country should embark upon a sustainable growth path to foster foreign investment and international trade opportunities, while supported by a strong banking system. However, there are several business risks that a firm launching onto a foreign country should assess.

The first risk assessment should be associated to the bargaining power of the firm expanding to a foreign market. Factors such as product/ service uniqueness, technological advancement, the firm’s size and operational growth assist the effective management of distribution channels, while maintaining product or service quality.

At the same time, the bargaining power of the host country is equally substantial to profitable international operations in terms of the size of the market, its wealth, the abundance in its raw materials and the level of governmental intervention.

Other risks associated to international trade are:

Customer Risk

Customer risk investigates the indistinguishability of customers in the host country. By assessing customer risk, the firm inspects if customers are legally established businesses in the host country or importers, if the firms’ exports are compatible with the customers’ business profile, what are the customers’ credit limits and period, their trading history, their paying credibility and solvency.

Credit Risk

Credit risk is associated with the customers’ solvency but also the firm’s business cycle. To assess this type of risk, the firm needs to take into consideration the amount of credit outstanding – both overseas and domestic – in the trading accounts, the impact of a customer’s financial pitfall of the firm, the maximum amount of credit which should not be exceeded, and most importantly how to finance the offered credit period. Having adequate cash to grant offering credit terms in export income is a substantial part of the firm’s business circle.

Foreign Exchange Risk

Foreign exchange risk is associated with dealing in the host country in more than one currency. This type of international trade risk typically affects export and import businesses as they are exposed to fluctuations in the foreign exchange markets. If money

is converted to another currency in order to make a payment to the host country, then any changes in the currency exchange rate will cause that money’s value to either decrease or increase when the payment is being prefabricated and currency is converted back into the original currency.

Political Risk

Political risk measures the variability in the value of the firm, caused by uncertainty about political changes. In the era of globalization, host countries might be covering rigid legislative, judiciary and governmental institutions, unfavourable to international operations from foreign firms. Moreover, dictatorships, bribery, corruption and unstable governments are, in many cases, substantial reasons for assessing the political risk involved in a firm’s launching onto a foreign country.

Moreover, political risk in the host country is often not correlated with global economic conditions thus eliminating the possibility of global intervention. Ideally, the firm’s cash flows should be invested in different host countries. Yet, in the absence of global intervention, the firm’s cash flows do not grant risk diversification.

Country Risk

Closely related to the political risk factor, country risk is affected by the legislative, judiciary and governmental institutions, the current statement deficit, the level of national debt, the foreign exchange reserves, the internal or external threats to the host country and the imposition of tariff or other quotas, and import or export restrictions. It might also include the risk of physical climactic catastrophes such as flood, drought, and earthquake.

Beyond doubt, doing business in a foreign country entails major business risks. The key is to assess these risks properly in order to eliminate the unfortunate bourgeois in the firm’s global operations, but also to be prepared to expect the cost of such a failure.

More International Business Articles

Unlike a statutory audit, which is mandatory for companies that change to satisfy the exemption criteria, an internal audit is not required by Company law or bookkeeping standards. When internal audits are carried out they are done solely at the discretion of the directors or shareholders. 

A statutory audit will test the financial systems of the company, verify the equilibrise sheet of the company and ensure the financial statements are fully compliant with the Companies Act 2006, UK GAAP and bookkeeping standards. If the directors and the shareholders are one and the same, arguably, the statutory audit is of tiny benefit and adds no value to the business.  This is not true of the internal audit. 

The internal audit is a non statutory investigation of the financial affairs, or the commercial affairs, of the company by either an external third celebration or the company’s employees. If an external mortal is used to carry out the internal audit it does not need to be a registered auditor and anyone can carry out the task, unlike that of a statutory audit. Internal auditors are not regulated, unlike external auditors, so without all the red tape and hoops to go through an internal audit is often much cheaper than a statutory audit, even though not many directors and shareholders seem to appreciate this. 

The format of the statutory audit is rigid and the overriding neutral is to make an view on the truth and impartiality of the period end financial statements. The objectives of an internal audit are completely bespoke and can be plain to suit the specific needs of the business therefore it is a vast area. Ultimately, it is up to the directors and shareholders of the company to determine the objectives of the internal audit and then let the internal auditor devise tests to meet the objectives. 

For example, a company might have implemented a new system a few months back. In order to ensure the system is operating as it should, achieving the correct results and satisfies the company’s needs an internal auditor can be appointed to simply test and report on the new system. From the results of the audit the directors can determine whether the system should be left to run as it currently is, whether it needs to be changed in some way or whether to simply scrap it and revert back to the old system. An internal audit can serve as a great planning tool. 

An internal audit can be used to look at a whole range of business activities including sales, procurement and purchasing, human resources and staffing, marketing and accounts to study but a few. 

Many massive companies have their own internal audit department where a team of internal auditors will be employed solely to critically look at different parts of the business and subjectively appraise them. The function of an internal audit department is vast and will usually consist of a series of mini projects. If the company does not have its own internal audit department it might outsource these mini audits to a firm of accountants, as this might establish to be more cost effective. 

Smaller companies are unlikely to have an internal audit department and are unlikely to benefit from being constantly audited. However, there are times when the directors of these companies will require one off and ad-hoc mini audits. In these situations the directors are likely to engage the services of a firm of accountants. 

An internal audit, if planned and carried out correctly, is a versatile tool that can be used in many different areas of the business, and what’s more it can lead to improvements to the business and add value.

First you need to decide what sort of business structure you will be using.  You will be considered a sole proprietor if the business is under your study alone and you do nothing but submit your social Security Number as tax identification.  If you and another celebration own the business, you will automatically be considered a partnership.  Two other options that businesspeople often think about are filing as a corporation or a limited liability company.

Next, if you register your business as a corporation or limited liability company, you will need an

Employer Tax Identification Number (EIN) – This is the number that the Internal Revenue Service uses to monitor the operations of your business in a manner similar to how they use a Social Security Number to track us as individuals.

Now, you need to do diligent record keeping.  You want to keep an extensive set of ledgers, whether on your personal or on paper and place in a fireproof file.  There are many good software programs acquirable for personal record keeping.  Whatever you do, make sure you fully comprehend your ledger system and that it is simple to refer to it should the Internal Revenue Service have questions.

The Internal Revenue Service has been cracking down on payroll tax compliance.  If you own a small business it is important to you to refrain an Internal Revenue Service audit and the resulting penalties if you are found non-compliant with payroll tax regulations.

You need to know everything you can about payroll taxes. The Internal Revenue Service recently marked small business as the biggest target for tax compliance enforcement.  Small business is particularly being targeted for compliance with payroll tax regulations.

When it comes to payroll tax enforcement, the Internal Revenue Officer has the power to seize your business and place you behind bars.  The Internal Revenue Service’s power in the enforcement of payroll tax collection is unyielding.  They can padlock your business, seize your equipment, and even intercept payments due you by customers.  You can't ignore payroll tax issues, or you are going out of business.

The Internal Revenue service can charge you with unfortunate to file, deposit, or pay your payroll taxes.  Penalties of 33% can apply just 16 days after the due date.  Penalties and interest grow even more rapidly from there.  You can soon find yourself so bogged down in tax payments, penalties, and fines that you are forced out of business.  It doesn’t matter how your business is structured, as an LLC, Limited partnership, General Partnership, Incorporation, whatever structure you have is finally vulnerable to the tax man.

If you do not have an accountant and an attorney, you need to hire them now.  In this day and age, it is impossible to own any kind of business without decent legal representation, whether for taxes or just the day-to-day business dealings.  Also, a good accountant or tax professional is worth their weight in gold when it comes to reducing your tax liabilities and being certain you are in compliance with Internal Revenue Service regulations on things like payroll taxes.

You’ve seen them before and wondered what the heck they were thinking: small businesses with domain obloquy like “http://reallylonganduniquebusinessname.biz”. Half-out-loud you say: what, was “http://reallylonganduniquebusinessname.com” taken? A new advertising technique of “illegal” casino websites helps establish that your snickering is totally justified.

Cheapskates and Johnny-dot-Com-Lately’s

If you’ve consulted for small business websites as long as I have, you have probably came across more than a few whose owners decided to save three dollars at Godaddy by buying a dot-biz domain name. Or a dot-net, dot-info, or dot-whatever was on understanding that week.

Whatever it is, forget trying to tell them that they might have lost out in thousands of dollars of business from type-ins. That is, from all the people who will type in the dot-com version and get an error message–or a parked domain advertising naughty-naughty pictures. Nor should you tell them that everyone who knows a dot-biz from a dot-com knows that the former is usually offered on understanding and is the beast-mark of the most extreme kind of penny-wise-pound-foolish cheapskate. The obviousness of the truth of the attending will only make them hate you more.

Then there are the netrepreneurs who wanted that keyword-perfect domain study so badly that they took a dot-biz, dot-org, dot-cc, or dot-what-the-heck-does-that-stand-for? when the dot-com version was already taken. You know what I’m speaking about: a one-man-band bookstore that purchases the “book” domain with the Vatican’s top-level domain extension because Barnes & Noble has http://book.com, and each other doable variant was also already taken.

Again, don’t bother telling these people they’re just sending type-in traffic to Barnes & Noble. You are arguing against a cottage industry. Pitcairn Island, population under 100, has its own top-level domain study extension. No doubt they can cut back on their rare coin and postage stamp production thanks to the hundred bucks (US, not Pitcairnian) per domain paid by wishful Johnny-come-lately’s. And GoDaddy is no doubt raking in the credit card digits from .us domain obloquy that are worth their weight in gold pixels. This is the web version of small business owners paying thousands to place their children in their TV commercials. If you’re a business consultant, you correct their error at your peril.

Why Casino Sites Know Web Businesses Need Dot-Coms

In case you have some justification for a dot-whatever lurking in some self-destructive corner of your brain, let me write this as clearly as possible. For a US or international business, the only suitable domain study extension is dot-com. Nonprofits can get by with dot-org, schools with dot-edu. Non-US country-specific businesses can use their own national domain study extensions. No, my fellow Americans, there is no justification for dot-us, even if your shipping area does exclude Canada and Puerto Rico and military addresses to boot.

Why? Here’s solid evidence the dot-whatevers are so bad.

1) Type-in traffic.

Yes, many people really will type in the dot-com version of a non-dot-com business website. I discovered powerful proof of this once after I saw a TV commercial for a website with educational information about gambling. Curious how they were making money on this deal, I typed in the domain–and found a website with actual gambling right on the homepage, which would be flagrantly (though perhaps technically) illegal for me to use. Only later did I realize that the TV commercial had advertised the dot-net version of the domain, and I had typed in the dot-com version. The dot-net version has the educational material.

How would a no-membership-fee content website–with tiny to no advertising–recoup the expense of TV advertising? Only if a vast number of the visitors to go to the money-generating dot-com version.

2) Prestige

You might think I’m absolutely off-base and a business’s domain study choice is none of my dot-biz-ness But the fact is those views are my opinions, they’re not going anywhere, and if you want to impress me, a dot-whatever domain study won’t do it. And I’m certainly not the only one who feels that way. Maybe you can just devote your dot-whatever website’s homepage to refuting the snickerers like myself?

3) SEO

True snobs, search engine algorithms are suckers for anything that smells of respectability–and dot-whatever does not smell like that. How often do you see a high-ranking dot-whatever business site? The irony is that many dot-whatever domain study owners hope that having the keyword in their one-of-a-kind domain study will help them in search engines.

In the end, I have to admit there’s one good thing about the snobbery against the dot-whatever domain names. They wage a way for web business consultants to sort out the serious inquiries from the slush, just by looking at the “from” address.

The video gaming business is a Multi Billion dollar International business. The demand for video games is large everywhere which means there is always enough space for new companies to grow and prosper. However newcomers in the industry don’t know how to get started. Below is a checklist of 5 simple steps to starting your very own Video Gaming Business.

1. An Inspiring Idea: Having a gaming company is of course all about having a great Game. But great games don’t come off easily, the first and most important stipulation is having a great intent for a video game. You will need to spend some time thinking about what genre of video game you would like to release, as well as get a general intent as to what the characters will be, what the goal of the game is, what the storyline will look like, etc. Once you have the intent you can step into the

Game Design process easily.

2. Research & Acquire: Now you have an idea, what next? It’s time to research your options, the market, and the business plan and of course get all the required tools within your budget to help your programmers with Game Programming. Here, you will also need to think about what platform you will be releasing the game for. Will it be a computer game? Will it be a game for one of the many game consoles? Will it be a web based game that can be played from inside one’s browser?

3. Hire a great Team:  You simply can't develop a game without a team; it takes hours of programming, research and designing. There are many other factors such as the art work, music & sounds and  Video Game Testingonce the game is ready. You will need to hire some experts in different fields of video game design and creation. However, you don’t always have to hire a full-time staff. It is also doable to hire freelancers who will work on a specific part of your project for a pre determined amount of money, rather than paying them hourly wages.

4. Development Phase: The most important phase, this is where all the pieces come together. This phase involves your team using the tools you have to bring your intent to virtual life. Now your company will be doing a lot of game programming and development along with video game testing in the final stages.

5. Funding & getting the game out: The final stage, you have the game ready & now its time to get it out. This stage involves getting publishers and retailers to sell your game to and of course make money. In some cases this stage comes as step 2 if you have no funding to get started you might need to get some investors first.

About author:

Gina Kraft wrote the article for Game Shastra. Gina is a supporter of Game Shastra specially, their game design, game programming, and game development areas.