Do Business Well

I owned and operated a wholesale company with approximately one thousand retailers as my customers. I was completely computerized and sent statements to my customers every month in addition to their invoices.

We offered a 3 percent cash discount for payments received within ten days of invoice date. We charged 1.5 percent per month interest on accounts that were not paid within the standard thirty- day terms. The U.S. economy had enjoyed two very prosperous years. For all of these reasons, the company was collecting its accounts in an average of thirty days.

In addition, we had only needed to write off .5 percent of our total sales because of the bankruptcies or liquidations of our customers. This was excellent, given the number and quality of our customers. Continue Reading »

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ASSET VALUE

For most companies the asset value should represent the lowest amount below which the owner might just as well liquidate. There are only two differences between asset value and liquidation value. In calculating asset value you don’t have the costs of liquidation and you can be more generous in appraising certain assets than you might be if you had to liquidate.

INDUSTRY STANDARD VALUE

It’s common in many industries to have a valuation method. Travel agencies are generally valued at ten times annual commission. Manufacturers’ reps, on the other hand, are generally only worth one year’s commission. Magazines use a certain number of dollars per subscriber. Manufacturers might expect to get between two and ten times annual earnings. Continue Reading »

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The development of a secure and verifiable form of electronic money will be the catalyst for an explosion in the field of digital marketing. Also known as cybercash or digital cash, e-money will become the standard currency of the digital age. You’ll be able to load e-money onto smart cards using readers attached to your telephone, or download it from your bank account to your hard drive. You’ll use it to buy products and services online, and transfer it to your friends and relatives. You’ll also carry around a digital purse with electronic money in it, and use it like you use cash today.

Daunting hurdles must be overcome before digital money becomes a reality, and many questions remain unanswered. Should electronic money be based on existing national currencies, or should a new international electronic currency be created? Continue Reading »

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