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Making Your First Million – From Entrepreneur to CEO

By Morgan International Staff Writers

It is the milestone that most entrepreneurs hold in great esteem – the first million dollars. It is a mark of success (usually), and highlights that revenue is going in the right direction. However it is typically around this time that a number of additional considerations and responsibilities come into play. Typically it is the time where consummate entrepreneurs find themselves as more of a CEO – and for many this can feel like a rather big transition. This is the reason that for some, they decide to hire in a CEO whilst they remain in charge of product/service direction. So what are the main changes?

1) You will need more people
More revenue usually means more people are required within the business. This in turn means more hiring, more people to manage, and often a more formalized HR structure. It can be the tipping point whereby you start to need many more policies and procedures for staff to follow.

2) You rethink financing
In the early days you may be using your own funds, money from family/friends, perhaps small bank loans, or even credit card debt. There comes a point where a business will need to find different types of finance if they are to grow and be supported appropriately. This might mean business bank loans, venture capital, private investment, and/or stock market floatation.

3) You rethink your company structure
When you set up the business you will undoubtedly have done so with the current circumstances of your business in mind. Once you grow to a certain size, you may find that a different structure is more appropriate to reduce tax liabilities and also to support your business.

In Summary
Undoubtedly, a million dollar revenue will not be the exact point that everything changes. However the point of this article is that there will be a stage in the life of every growing business that things shift across a multitude of areas, and the savvy entrepreneur should be ready to make changes to support future growth.


Financial Habits of Successful Small Businesses

By Morgan International Staff Writers

I am sure you have heard it said many times that liquidity is an imperative consideration for all businesses – not just those that are small. However for small businesses it can be even more important as they may have less financial back up when the bank balance is zero and invoices are stacking up. Being financially savvy is incredibly important for a small business, and a study by Freshbooks in the US looked at 1700 small businesses to ascertain the financial habits that make for success or failure. These are our top 5:


  • 69% of small business owners review finances regularly

It is important to have a real time view of the financial situation, and a forecast of what is coming up. For most businesses there will be a pattern of income and expenses, but as with all things there will financial impacts that fall outside of this pattern. Reviewing finances regularly allows for planning in case of impending liquidity issues.


  • 47% of small business owners maintain a budget

Reviewing finances is a first step, but it is also important to have a budget that looks to the future and estimates income and expenses. This is in essence a planning document and it allows small business owners to make more informed decisions. Most find that they get more accurate at budgeting over time.


  • 52% of small business owners put their taxes aside

The government is one institution most small business owners are fearful of being indebted to. Taxes that will become due should be estimated as income is earnt, and put to one side for when the tax bill arrives. In most countries, late payment of taxes will incur a substantial penalty, therefore should be avoided.


  • 50% of small business owners proactively reduce debt

Some debt is cheaper than other types of debt. Most businesses will be leveraged to some degree, but there should be a plan to pay off debt, particularly that which attracts high interest rates.


  • 64% of small business owners set up an optimal structure for tax purposes

In each country there will be various company set up structures. It is important for small business owners to consider what the most appropriate structure is for them and often that relates to minimizing liabilities, including taxes.

In Summary

The success or failure of small businesses is strongly correlated to their ability to manage their finances. For those running small businesses that are not financially savvy, it could be very useful to employ the services of a financial advisor who can provide assistance.


How Much Should I Really Save?

By Morgan International Staff Writers

This is a question people have been asking financial advisors regularly for many years. The answer is typically less than straightforward and depends on personal circumstances and goals/aspirations. These are our top four considerations.

1) What can I afford?
There will be those in unfortunate circumstances who do not have any money left each month after they have paid the rent and bills. Of course there is then a question of whether there is a way that some of those expenses can be reduced so that there is money left for savings. Or perhaps there is a way to increase income such as taking on additional hours or looking for a better paying role.

2) Emergency fund
One step up from saving nothing is to consider how much you would need to have saved in case of an emergency. This situation will be different for each and every person, and whilst you will make some calculations and assumptions – it does not mean they will turn out to be correct. Let us take an example of an individual with no savings who rents a property on their own, who is in a permanent role. An emergency would be the individual losing that job for whatever reason – redundancy, illness etc. Clearly you would expect statutory redundancy or some sort of payment in the event of ill health. However to keep this simple, the individual would want to consider how long they think it would take them to get back into employment, and how much their expenditure would be each month. If their expenditure is $3,000 per month and they think it will take 6 months to find a new role, then they need $18,000 in savings.

3) Retirement planning
Once the emergency fund is covered, the next natural step is to consider planning for old age. Of course for some this might be part of a pension through work and therefore this might be covered whilst the emergency fund is still a work in progress.

4) Investments
There may be various investments that you want to engage in, such as buying a property to live in, or perhaps stocks and shares. It is important to have a diversified portfolio and be clear about the purpose of each investment. Clearly to make investments, a certain amount of funds will be required, and this should be researched and saved for as appropriate.

In Summary
The reality is that your ability to save will be linked to your income and your outgoings. For many people, they can reduce their outgoings to allow them the ability to save. If you wish to get some professional support with savings planning, you might consider contacting a professionally qualified financial planner.


Why Do We Struggle With Financial Literacy

By Morgan International Staff Writers

According to an OECD study, one in five US students do not meet basic levels for financial literacy proficiency. Financial literacy is defined as a person’s ability to understand how money works in the work. This applies to both personal and business finances. A number of attributes of the 2007/2008 economic crisis indicate that the human race is somewhat lacking when it comes to financial literacy. This article seeks to question why we are seemingly so inadequate in this area of knowledge.


  • Access to financial education – or lack of it

School curriculums differ by country, but the overwhelming sense is that financial education is very poor. Most children learn algebra which for many is of limited use in later life. However few learn about savings, pensions, interest rates, inflation, and so on. Those who undertake specific finance qualifications typically do so later on in their education when they have decision making over what they learn. For those that do not pursue financial qualifications, they are unlikely to have had any access to formal financial education.


  • Information gained from non-neutral sources

When we do finally get information it is typically provided by a service provider, such as a bank who wants to sell us a particular savings product. Therefore the information is to some extent biased. Many countries now have strict regulations against advice being anything other than neutral and transparent, but there is still some way to go.


  • A little bit of knowledge is dangerous

This is an old adage, but to some extent it is true, particularly in the financial industry. Once we do start accumulating financial knowledge, it tends to come from multiple sources and we cobble that together into our sense and understanding of the financial environment. None of this information is likely to have been validated, and the way we combine that knowledge may not be a true reflection of the particular financial ecosystem.


In Summary

A lack of financial literacy has the potential to have personally devastating effects, as well as causing wider business and financial ecosystem impacts. We know that there is a gap with respect to financial literacy that must be bridged, and a natural place to start seems to be within the education system. However for those of us that left education some time ago, it is advisable to seek professional advice when making important financial decisions. Within a business setting, qualified professionals from the finance function should be involved in decisions that require a level of financial acumen.


5 Tips to Guess CFA Exam Answers

By: Morgan International Staff Writers
Let me start by saying that nothing in this article is meant to encourage you to not do a sufficient amount of preparation and entering the CFA exam with the requisite knowledge to pass with flying colours. Yet, like with all exams, however much we prepare, there may be questions that have us stuck. Each candidate will have a different approach to exam technique – whether that be tackling them incrementally, or leaving those ones until the end. Regardless of approach, if there are 10% you are unsure of, it is still better to give them a go, or else you are already reducing your potential score by 10%. We have pulled together 5 top tips to help you ‘intelligently guess’ or deduce the answer – or at least give you more of a fighting chance of scoring some points.

1) Use deduction for multiple choice questions
Look out for answers that absolutely can’t be correct. Work through a process of deduction and if you manage to get down to two potentially correct answers – then you now have a 50/50 chance of scoring points. Don’t panic - try and progress logically through the potential answers.

2) The answer to one question may help answer another
In CFA Level II and III there is a vignette format where 6 questions are about the same passage of text. Sometimes an answer or answers to some of the questions may assist you to deduce what part of the syllabus is being tested as there tends to be a theme within the vignette. Unfortunately, all questions in CFA Level I are independent of each other – so this tip will not help you on that exam (sorry).

3) Stick to the course material
If you feel stuck, you may have some knowledge tucked away from another course that you think might help. Our experience is that it won’t. Whilst this may seem opposed to educational spirit – it is important to stick to CFA definitions and content.

4) Don’t argue
You may be struggling to answer a question because you feel it is worded poorly or you think that it is very difficult to interpret. Or perhaps the question makes no sense whatsoever in your opinion. Do not spend your time answering the question with your perspective on the inadequacies of the question. We assure you that it won’t secure you any points, or ‘brownie points’ with the exam marker.

5) Use your common sense
When all else fails, use your common sense and your gut feel. Have some faith in yourself. You should have done a number of practice papers by this point which hopefully has given you a good feel for the exam structure and typical answers to typical questions.

In Summary
Nobody said the CFA exams would be easy. However the key to success is to work calmly and methodically. You are unlikely to feel certain you know the answer to all of the questions and it is advisable to accept that and have methods and tips in your mind to help you cope.


Get Employees behind Lean Six Sigma

By Morgan International Staff Writer

Arnold Glasow famously said, ‘Improvement begins with I. This was not a quote specific to implementing Lean Six Sigma, but more holistically that for improvement to happen it has to start with individuals. Therefore this means that simply implementing top down change without the support and interest of employees, will rarely work.


Employee concerns

The first thing to appreciate is that employees typically do not like change – in fact most humans find change unsettling. Secondly, any process or procedural changes can set alarm bells ringing that job losses are on the way.


How do you get your organization ready?

Each organization is working from a different starting position and company culture will be incredibly important in determining how easily employees accept Lean Six Sigma. Clearly in organizations where employees understand the vision and strategy, and buy into it, a simple explanation of how this change will help on that journey should be sufficient to get them on board. However, for employees who have not been part of strategic conversations, and there has been little change for many years, this might all seem alien and very scary. What I am saying is – assess the current situation and then design a communication plan. In our second example, expect organizational readiness to take more time and many more incremental steps. Expect scepticism and resistance and consider appointing change agents who can voice the advantages of Lean Six Sigma. Be ready to:

  • Sell the benefits of Six Sigma to employees
  • Communicate clearly with employees and be sensitive to resistance
  • Use change agents to remove barriers
  • Incentivise employees (attach their bonus to organization wide success of six sigma, offer training)
  • Have senior leadership advocating the change and talking about it consistently.


In Summary

Do not expect your employees to accept the implementation of Lean Six Sigma with open arms. As with any change, you will need to assess current organizational readiness and then produce a plan to get employees ready to embrace the new way of doing things. You may decide to link monetary incentives to the success of Lean Six Sigma. However employees very often value other incentives more, such as training. Since a large programme of change is being launched, it is a perfect time to incentivise employees by offering them industry recognised training that is portable throughout their career.


Financial outlook for 2017

By Morgan International Staff Writers

With 2016 being quite so unpredictable, you could be forgiven for thinking that we may be in for even more uncertainty during 2017. With markets not sure how to react to global issues, banking as a sector is likely to expand their product base and move into new areas of commerce. This fluid and changeable environment means that accepting new operating models and investment in emerging technologies that address the markets in different ways and open up new possibilities for investment and operations.

Many of the perceived changes are likely to take place in a number of areas of personal and corporate arms, including consumer banking, international trading and Mergers & Acquisitions (M&A), commercial banking, and infrastructure activities. These areas cover the huge subject of macroeconomic trends and it’s a side of the international banking business that is expanding fast. Banks will be looking at major investments being carried out as well as forecasting interest rate rises in the developed nations and how gross domestic product (GDP) is utilized with those countries. This information is key to the long-term forecasting needed to make the banking sector as stable as possible, and from that stability, be able to make informed decisions on investments and business direction.

In 2017, M&A is likely to see an increase in legislation, ensuring that takeovers are not only legal, but also acting in the interests of the many rather than the few. Commercial banking will see prudent lending to ensure that markets stay buoyant but don’t start running out of control, and transaction banking will focus on a balance of product innovation while ensuring that costs are kept low. The most obvious innovation for 2017 will be a stronger response to cybercrime and a strengthening of products and processes to ensure that customer accounts remain secure.

But the bank knows that key to understanding what is likely to happen in 2017 and beyond is having the right people in place and ensuring that the training they receive is pertinent to the task. Above all, banks to not make frivolous decisions and predictions are always backed up with well thought out responses. The changes that banking is likely to feel in 2017 will be based on people with the right skills and that is likely to be the biggest change to banking in the year; get the right people, and train them correctly.


Tips on Managing Cash Flow When Business is Rising

By Morgan International Writers

One of the biggest problems a company can face is how to deal with the increased cash flow when business starts booming.   A smaller company with several departments can suddenly receive a deluge of requests for funding as manager’s eye a healthy company bank balance and start to think of all the new and exciting equipment that they could fit out their departments with.  A sudden upswing in business can also instill a feeling of overconfidence in the company and as well as new equipment, a managing Director may find that they receive requests for more personnel.   However, caution is always the best policy in these situations and rather than just spending out, there are ways in which you can protect your potential investment.


As a company you are likely to have a financial plan.  This is the document that shows how you intend to invest and grow over a period of years, but these can seem in need of an update if the company suddenly finds itself in a period of furious sales activity.  However, the best policy is to stick to the original plan and just bank any extra funds for future use.  You may find that the extra sales are actually just a blip rather than a concerted and long term shift in sales, and if the money is spent, it may leave you in an undesirable situation, so it makes sense to treat any extra sales as something out of the ordinary and carry on as usual.


Similarly, senior management need to take extra care with expenses – both their own and those of their team, who may feel as though they can spend more in the pursuit of business.  Once again the best policy is to stick to the original plan and not embark on a session of spending – you may end up regretting it. Of course, you may find that you have a sustained period of extra sales, and you do need to cope with those, but rather than take on staff who may not be needed in a few months, so temporary staff and sub-contractors are the best way forward in those situations.


Dealing with a sharp upturn in business can be as daunting as losing business.  It may well be worthwhile preparing for both eventualities, just in case they happen.




How to get your company inclined towards 6 sigma?

By: Morgan International Staff Writers

As a professional you know that six sigma is a complete set of tools and techniques applied for the process improvement. It is not department specific and gets the best results for the organization. However, before the application it is important that your organization gets to know the features so that it can support the model in a way that increases its productivity.


The following are some points that can be used to gather sufficient support for lean six sigma and its implementation in your organization.


  1. Work at the grass root level to overcome skeptics

Don’t expect your organization to adopt the process as soon as you introduce it to the staff working. Always remember that you will face skeptics in your department that might hinder your plans. Have trust in your abilities, in your plan on making 6 sigma a huge success. Following are some points that would help you out:

  • Always remember your organizational culture before marketing the program
  • Ensure that your staff understand it well
  • Get the management to sell the program to the employees
  • Define the process improvement that entails six sigma
  • Try to defeat the status quo by marketing the benefits
  • If you are in a position then announce employee benefits to show your management skills


  1. How to motivate the ready staff?

It is advent that the organizations always resist changes that they are unfamiliar to. If you are thinking that how this alien program can achieve success in your organization then follow the points that are mentioned as under:

  • There is always some support internally for any program
  • Motivate your employees by making them believe that they would ultimately become an asset to their organization
  • Financial or advancement opportunities must be promised or provided beforehand if necessary
  • Make the employees believe that their positions and work in the organization matter a lot
  • Manage the supportive population efficiently and this will lead to even more lead generation




It is never easy to implement lean six sigma in your organization with ease. There are some questions that you should ask to yourself or even the top management and motivated staff. These are:


  • How much is the company committed to the program?
  • Is it really necessary?
  • What are the possible counter arguments which I will be facing?


Six sigma is a complete process shift. If your change management skills are good then it’s not a problem otherwise be ready for strong and massive resistance.


What you need to know about financial statements.

By Morgan International Staff Writers

With more of us turning to stock investment as a means of making money, it becomes increasingly important to understand how a financial statement is constructed and what information you can get out of them.  If you interpret the information correctly, you could end up making some impressive investments, but it does need training and good eye for business.  But how do you get the most out of them?


The first thing to understand is that financial statements are essentially scorecards that reflect the health of a business, and the Prudent investor will seek out quality companies with strong balance sheets, solid earnings and positive cash flows.  This means that to get the right information for investing you should be looking at the balance sheet, the income statement, the cash flow statement, the shareholders' equity and retained earnings.  All of those elements reflect the financial health of a business and demonstrate its ability to grow, which is a key feature for companies looking to invest themselves.


To make the most of financial statements, you need to understand balance sheets, income statements, the equity set aside for shareholders and company retained earnings.  These values represent real-world figures for the company rather than something more esoteric such as value based on assets alone which may give a highly distorted picture. There needs to be some caution though as are those in the general investors who tend to focus on just the income statement and the balance sheet, thereby relegating cash flow considerations to a lesser role in the consideration, which can be a mistake as the cash flow statement contains critically important analytical data that will help you make an informed decision.


It is important that you understand the diversity of business reporting and feel confident in understanding what each reported feature relates to and how it relates to the overall health of the company.  That means knowing what is actually behind the numbers and how their rations describe the viability of the investment.  Ideally, before starting a series of business investments, it is wise to ensure that you understand the business world, and take at least a beginners accountancy course and possibly even finances for non-financial managers.  These will give you the background that you need to make informed decisions.