Saturday, April 18, 2009

Save Money and Energy at Home

Making smart choices at home includes budgeting, saving and the like. Sometimes we miss out on other important things like being energy efficient that can lead to saving more money. So I decided to make an easy-to-do list on how we can save energy at home.

  • Use compact fluorescent light bulbs with the Energy Star label.
  • Turn off your computer and monitor when not in use.
  • Unplug TV's, DVD players, toasters, cellphone and other chargers when they’re not in use, or plug them into power strips; turn the power strips off when the equipment is not in use (TVs and DVDs in standby mode still use several watts of power).
  • Don't use air fresheners that have to be plugged in.
  • Air dry dishes instead of using your dishwasher's drying cycle.
  • Wash only full loads of dishes and clothes.
  • When in the market for an appliance, make sure you buy what suits your needs. Items too large or too small waste electricity and your money.
  • Upgrade to Energy Star products. Not all appliances are equal. Whether you're in the market for a new fridge, cordless phone or computer, look for Energy Star choices, which offer the best energy savings
  • Turn off lights because a good chunk of lighting expenses is from rooms that stay unnecessarily lit.
  • Clean or replace the air filter on your air conditioner.
  • Clean the coils on your refrigerator using a tapered appliance brush. Your fridge's motor won't have to run as long or as often. In addition to saving energy dollars, you'll prolong the life of the appliance.
It's nice to know that saving energy does more than save you money: It helps save resources. Using less energy pollutes less and results in less global warming. Even if you do nothing more than the 11 free things listed above, you will have made a difference in your budget and a difference in the world. Not bad for free.

Friday, April 17, 2009

Producing Restaurant Placemats as an Advertising Medium

The concept is simple: Give free paper placemats to restaurants in your area with either a prominent color ad or their menu in the middle, and 2" x 2" ads around the edge. These ads will make so much profit for you that if you run up against a stubborn restaurant owner, you can even pay him or her to take your placemats and come out way ahead. They'd be a fool to refuse!

The first step is to contact printing establishments in your area and find out what kind of blank or ready-made paper placemats they can either print or have printed for you. Get a quote on at least 5,000, including at least two-color printing. Compare your quotes and find the printer that will do the best job for the best price. Make sure this is a printer that will work with you on the layout of the placemats, if this is new to you.

Once you have your printing costs, which will be your primary costs, you can figure out how much profit can be made. Your profit will depend, in part, on how many ads you can put around the perimeter of the placemat. For example, if the placemat is 11 x 15, you can put a total of 20 ads around the sheet, leaving a one inch margin around the edge for the printer. Divide the printing cost, together with your other estimated costs (phone, travel etc) by the number of ads, and you have your cost per ad. For example, suppose your estimated expenses will be P24,000. Divide that by 20 ads and you have P1,200. This is how much each ad contributes to covering the cost of the placemat. Now, figure a target profit margin. In an area for example, an ad that will be seen by 5,000 people over an extended period of time could go for P3,600. This would be a P48,000 profit!

Now, make a list of restaurants that would be likely prospects for this service. The best prospects will be locally-owned family-oriented restaurants that are visited by residents of the area. Small, family-owned, restaurants will be your best bet.

GETTING THE RESTAURANTS: Offer to provide the restaurant 5,000 free paper placemats with either a large color ad or a color menu printed in the middle of the placemat. Local advertisers will be featured in small ads around the outside. When you say the words "5,000 free paper placemats," you probably won't even have to go any further! If the owner's a hard case, offer to pay them to take your placemats! Offer P2,000 and 5,000 placemats. This breaks down more barriers than you can imagine! If the restaurant owner has a pre-made ad or menu available, this can be reduced or enlarged by your printer to fit the center area of the placemat. Be sure the restaurant's section dominates the placemat.

Now, contact businesses that are in the immediate area surrounding the restaurant. Good prospects will be video stores, dry cleaners, grocery stores, book stores, any business that is frequented by families. Tell them that you have an advertising opportunity which will put their name and offer in front of 5,000 people for an extended period of time. Contact as many possible advertisers as you can. The more you contact, the more ads you'll sell. If your prices are competitive and you deliver honest facts, you should have an easy time selling the placemat ads.

Now, take the ads to your printer and layout the placemat. Put the restaurant's ad/menu in the center, and the other ads around the perimeter. Have the printer print the requested quantity, and deliver them to the restaurant. It's that simple!
This whole process can be done easily in less than a month. But, even if it takes you a month, the example above cleared P48,000 profit (or P46,000 if you actually had to pay the P2,000).

This is just an example, and your profits could be higher or lower, depending on your area. But, it should be fairly obvious that this can be an easy-to-run, profitable business that you can start part-time and quickly move into a full-time business!

Thursday, April 16, 2009

How to Put Up a Hardware and Construction Supply Business

With the increase in population, the demand for living quarters also increase. No doubt, the market is there. It is up to you, as an entrepreneur, to tap and take a share of that market.

Capital Investment

"How much capital do I need?" That is always the first question that pops up in our heads when we think of business endeavors. Let me just clarify that question. I think there is a more appropriate way to ask that because from there, we can determine the kind and extent of hardware/construction supply business we intend to undertake. It should be: "How much capital do I intend to invest? Is it or will it be enough to start the business?"

Okay, so let's break down the capital investment into two: Fixed capital and operational/working capital.

Fixed capital refers to immediate expenditure like construction of the place of business, rental; registration fees, cost of printing of invoices, delivery receipts, other business forms; store equipment and fixture such as tools, chairs and tables; cost of product display preparation; cost of warehouse if any; cost of delivery vehicle if any; initial product stock inventory.

Operational/working capital refers to the monthly expenditures: manpower remuneration and salaries; bills (water, telephone, electric); monthly rental (if leasing the place of business); gasoline expenses for delivering vehicles; payment of monthly stock purchases. When starting, you won’t always rely on the money your business will generate. What if you won’t be able to generate your expected payables? You should have a back-up capital. A capital investment budget must be prepared and set aside for the first two months of operation which can be arrived at after computing and estimating the aforementioned items.

In preparation, it is best to make your own checklist for the fixed and operational capital investment. After doing so, we can now compare and answer the question -- is the amount of capital you intend to invest sufficient enough to start your business?

Registration of the Business Enterprise

The easiest part in starting a hardware/construction supply business is how and where to register.
One must first decide on the status of the enterprise you intend to put up - whether single proprietorship, partnership or a corporation.

Once these are settled, you can now register your business enterprise with the following government bureaus:

- Department of Trade and Industry (Single Proprietorship)
- Bureau of Internal Revenue

- Security and Exchange Commission (for Corporation)

- Mayor's Office

It is necessary to register with the BIR to get a Tax Account Number for the annual income tax return. The TAN is also required in the printing of business invoice.
If you want it registered as a corporation, you need to register with SEC. For this, you will need to prepare corporation officers and by-laws. This is also necessary if you intend to export/import items. For the mayor's permit and license, you would need a barangay clearance and a barangay business permit. Your business enterprise will also have to undergo inspection from the City's Electrical/Fire/Sanitation Department before the mayor's permit & license will be released.

Location/Site Selection of the Enterprise

Everyone is aware that the location and site of one's business plays a major role in determining whether it will succeed or not. Strategic location is the key. Set up your store in places that are starting to boom. Don't up a hardware in a place where you see it is already fully developed or in a place where every corner has one already.
The viability of the business site is primarily determined by one factor: in plain view and easily accessible to prospective customers. If this factor is satisfied, then one can expect to generate a bigger volume of sales. Aside from a good location, there are other factors to consider such as the size of the site for product display and stock storage (warehousing capability), ample parking lot, nearness to other competitor hardware stores, and most especially the rental cost of the business site.

Manpower/Personnel Requirement and Selection

The personnel needed to operate a hardware/construction supply enterprise are as follows:
  • store manager
  • purchaser
  • secretary/filing/acct. clerk
  • cashier
  • salesmen/salesladies
  • store helper(s)
  • delivery driver
  • delivery helper(s)
The store manager is also the owner of the business. He oversees the smooth flow of work, both operational and marketing. The purchaser is responsible for maintaining the stock inventory level as well as determining which product is viable or not. A secretary/filing/accounting clerk is a necessity in the hardware business. He/she is responsible for all the paper work in the business. The function of the cashier is most often times also taken by the manager. Whether to hire a cashier or not is determined by the volume of the business. The store helper(s) also serves as the stockman. He is responsible for receiving and releasing the product line of the business. The delivery driver and helper(s) ensure that items for delivery reach customers in good condition.

Product Line Identification and Selection

Hardware and construction materials should be broken down into two categories: Structural/Construction and Finishing/Hardware.
Under the category of structural materials will fall the following:
  • gravel and sand
  • cement
  • hollow blocks
  • steel bars
  • lumber and wood
  • pvc and GI pipes
  • galvanized iron and roofing sheet
Under the category of finishing materials will fall the following:
  • paints
  • plumbing fixtures
  • electrical and lighting fixtures
  • ceramic tiles and wood parquets
  • kitchen sinks
  • aluminum and glass
  • hardware items
As for the items you will be selling, suppliers usually give terms. Like for finishing/hardware items, they usually give a 120-day term. For the structural/construction items, shorter terms are given e.g. 15-30 days, and sometimes cash basis.

Here's a tip: Finishing/Hardware items give a better profit compared to structural/construction materials, so you have to really compete with others. You must be aware of your competitor's price. You have to be always updated on construction/hardware materials.

Store Preparation, Design and Display

The presentation of one's business plays a big role in the sales of your product. Display counter must be designed and placed in such a way that they are readily accessible for customers inspection. This is particularly true for most hardware items. It is advisable to categorize the products on display to facilitate and serve the customer's requirements.

Sample Checklist on Capital Investment Requirement

  1. Registration Fees
  2. Construction or Rental of Store (Advanced Deposit)
  3. Warehouse
  4. Delivery Vehicles
  5. Store Equipment and Fixtures
  6. Store Design and Display
  7. Initial Stock Inventory
  1. Monthly Rental
  2. Water/Electric/Telephone Utilities
  3. Salaries of Personnel
  4. Delivery/Vehicle Expenses
  5. Other Expenses
  6. Stock Replenishment Budget
Product Stock Inventory and Control

Upon completion of the product identification and selection, as well as preparing the store display and design, one is now ready to make initial purchases for stock inventory.

A warehouse for the incoming stocks must, therefore, be ready and prepared.
This is the most strenuous part of establishing and starting a hardware/construction supply business. One must have a listing of supplies with their corresponding product line. One must get in touch with them, canvass their prices, and get the highest possible terms and discount.

In most cases, suppliers have sales representatives, and you can ask them to visit you. One can get a listing of said suppliers from the telephone directory, advertisements of product, or through friends in the hardware/construction supply community. When you have identified the product you intend to carry, it is advisable to concentrate first on these items. There is always room for production expansion later.

One should start purchasing the common and essential items since this is necessary for a presentable store display and showcase. The level of stock inventory of each item is determined by the saleability and disposal of said items.
To ensure facility and ease in making inventory, stock cards must be used. Items must be properly entered and coded in the stock card. This is also essential to be updated to regulate and control product items. Catalog the stock cards according to product items to be able to easily discern stock availability. Proper warehousing and stocking of products must also be pre-planned. Again, product categories and separations must be made. Stock control can only be achieved if updated records of incoming and outgoing stocks are kept.

Operational Guidelines and Procedures

This refers to organized and systematic flow of work. The manager must establish specific methods of doing thing. He must see to it that all aspects of business operation is guided by standard methods, pinpointing the personnel involved and the procedures to be followed to facilitate a smooth work flow.
Incoming stocks, for example, must be properly received and checked if they are in good condition, etc. Release of goods to customers must also be done according to the dictates of the purchases made and covered by S.O.P. This is specially essential in the delivery of goods to customers.

Proper procedures in selling must also be well-established from the moment a customer comes in to the time he/she left.
Specific cases, as in damaged goods (who shall be held accountable) or returned goods is another example. Guidelines and procedures - from the simplest task to the most difficult, to the unexpected cases that will occur - all store personnel must be well equipped to properly handle them.

Sales and Marketing Strategies

In any marketing endeavor, providing good service is essential. The salesman must establish a personal interaction with the customers to gain their confidence, and thus, ultimately make a sale.

Regular and prospective clients of the hardware/construction business are mostly architects, engineers, homeowners. These are targeted group and hence, any marketing thrust must be directed on them.
Although pricing is a significant factor considered by these group, it entails a lot of lad work and honest to goodness relationship that the salesman must be able to establish to generate a sizable volume of sales. Aside from having in-house salesman, the trend today is to have field salesman who will go out and close a deal with prospective clients. It is also common to see big advertisement of SALE being made by hardware and construction supply enterprises. The manager must develop his own unique method of attracting more to generate more sales.

Projected Return on Investment (ROI)

Everyone is aware that to open a hardware/construction store, one must have the intention to be in the business for quite a long time. It is not like a simple sari-sari store that one can close shop anytime. No matter how much minimum capital is invested, any loss is something to reckon with. In short, the return on capital invested is not instantaneous.
The projected ROI can, however, be estimated based on the business' monthly sales. A simple method to estimate the length of time of the ROI would be the following:
  1. Get the gross percentage of profit from the monthly sales.
  2. Deduct the monthly expenses (operational and working capital, excluding stock replenishment budget) to get the net profit.
  3. Divide the net profit from the fixed capital invested.
For example: Monthly Sales: P720,000
% of profit assumed at 20%
computed at 24 days in a month: P144,000
LESS: Monthly Expenses: 84,000

P 1,000,000 / P 60,000 = 16.66 months or approximately 1 year and 5 months

Examples of Common and Essential Items for the Hardware/Construction Supply Enterprise

Bail and Claw Hammer | Hand Saw | Hack Saw Frame | Shovel | Platering Trowel | Wooden and Aluminum Level | Tape Measure | Plier | Long Nose | Diagonal Cutter | Side Cutter | Flat and Philip Screw Driver | Tinner Slip | Pipe Wrench | Adjustable Wrench | Open, Back, Combination and Socket Wrench | Padlocks | Drawer Locks | Barrel and Flush Bolts | Safety Hasps | Door, Cabinet, and Piano Hinges | Dead Bolt and Rim Latch | Entrance, Bathroom and Handle Locksets | Door Closer | Door Track | Door Hanger Bracket Set | Cabinet Handle and Knobs | Flanges (end and center post) | Chrome Pipes | Sand Paper | Scrapper (paleta) | Rubber Hose | House Coupling | Hose and Plain BIBB Faucets | Shower Valve and Shower Head | Floor, Duplex and Basket Strainer | Wood and Metal Screws | Drill Bit and Aluminum Rivet | Paint Brush and Paint Roller with Tray | Veto and National Wiring Devices (Switches, outlets, and plates) | Eagle Wiring Devices (plugs, sockets, fuse, etc) | Safety Switch Box | Circuit Breaker | Transformer | Porcelain Receptacles | Bulbs and Lighting Tubes | Intercoms | Exhaust Fans | Gate Valves and Check Valves | Paints (oil and latex) | Tinting Color | Water Closets and Lavatories | Paint and Lacquer Thinner | Ordinary and Colored Cement | Sahara Cement | Wood Preservatives | Ceramic and Vinyl Tiles | Wood Parquet | Plastic Diffuser

Special Items
  1. Ceiling Lamps
  2. Formica
  3. Penlight and Spotlight
  4. Bathroom Accessories (towel rack, ring, soap dish, robe hook, soap & paper holder)
  5. Water Heater
  6. Wire Basket
  7. Kitchen Sink (porcelain Enamel and stainless)
  8. Range Hoods
  9. Medicine Cabinets
  10. Door bills & Chimes
  11. Telephone Shower
  12. Motor Pumps
  13. Power tools
  14. Bath Tubs
  15. Shower Enclosure
  16. Glass Blocks
  17. Rubber & Aluminum and Brass Stair Nosing
  18. PVC Door
  19. Gypsum & Acoustic Board
Download: How to put up a hardware and construction store manual

Ten Ways to Survive the Depression & Make a Profit

  1. Only attempt to make money where you KNOW you can really make it. Don't attempt to make money in new directions unless you can 'test the water' very cheaply and can afford to lose the time and money that you have invested.

  2. Have a good long look at your expenses. Where can you obviously cut down? What can you do without?

  3. Try to pay all your bills immediately. By doing this, you gain greater peace of mind because you can always delay paying if necessary. You may need a cushion to fall back on which you won't have if you are already paying bills at the very last moment.

  4. Keep track of your spending and try to spend less. For example, when you go shopping and normally spend $20, take only $19. This will FORCE you to cut back. If you are in business, keep track of each days expenses compared with each days takings. Never spend more than you take. Compete with yourself on the smallest weeks expenses and largest weeks takings.

  5. Look, look, look all the time for LOWER prices on the items which you must buy. Check the quality first; it is amazing the savings that can be made.

  6. If you have the time but little money, don't spend that time brooding or getting depressed. Read books that will uplift you. Learn more on the subjects that could help you make more money and plan your way to more money. Keep active. You won't get anywhere if you don't.

  7. If you don't have time, it is still important to keep your spirits high. Record some lifting chapters or quotes from books and play them while you are working. Keep a note-pad handy and write down any ideas you have to improve your situation. Try to find fifteen minutes to half an hour each day to plan your work and make a plan for the future. This is vital as it will save you more than the half an hour spent.

  8. Before borrowing to raise capital, look around your house and find unwanted things that are obviously saleable. You could raise quite a few hundred pounds this way if you are lucky.

  9. Don't go for big money fast. Only a very small minority EVER achieve it. Aim to cut costs a little each week and increase your income a little each week.

  10. If you really need to borrow, always remember that you Must pay it back PLUS interest. There is nothing wrong with borrowing if it is carefully planned. Take into account your initial expenditure, advertising costs and the time it will take before you will get paid. NEVER borrow unless you have thoroughly tested as much as you possibly can first and even then, plan for things taking longer than you thought as well as being much harder than you first thought.

'Slow but sure' is a must. The good thing is that if you can survive during a depression, you will be sure to find it easier after it.

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