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Financial risk management is the practice of identifying, assessing, and managing financial risks that a business may face. These risks may arise due to a variety of factors such as market volatility, credit risks, currency exchange rate fluctuations, interest rate changes, and operational risks. The several financial risks that businesses deal with There are several types of financial risks that businesses face. These risks can be broadly classified into four main categories: Market risk: This type of risk is associated with the potential losses a business may face due to changes in market conditions, such as fluctuations in interest rates, exchange rates, and commodity prices. For example, a business that relies on imported raw materials may be exposed to exchange rate risk if the value of the currency in which the raw materials are denominated increases. Credit risk: This type of risk is associated with the possibility that a borrower or counterparty may default on their...

Looking for practical ways to reach financial success when pursuing a non-conventional career path as a solopreneur? Due - Due Being a successful solopreneur isn’t simply about having a marketable business idea that can withstand competitors. It is about having a thorough plan and processes in place to see financial growth and stability in the initial year and beyond. It is possible for non-conventional career seekers to reach their business goals and financial success in the modern age. However, it takes a significant amount of discipline, dedication, patience, organization, and due diligence. To begin your successful financial journey as a solopreneur, check out these ten practical ways to effectively approach and manage your business. 1. Brainstorm your SMART goals and objectives. To be a successful entrepreneur, you need to have strong business, marketing, and financial plans. These must include your mission, SMART goals, and key business objectives that will guide...

The news is abuzz with rumors of the next recession coming in 2023 or 2024. But for most Americans, all of that triggers a sudden panic and a desperate need to look at one's bank account. What is a recession, what does it mean, and how can you prepare yourself and your family's finances for one? This article will answer each of these questions and more. By the end, you'll know what to expect and how to prepare for a recession. What is a recession? According to economists working for the National Bureau of Economic Research, a recession is a prolonged period of economic downturn or declining economic activity. It affects a nation's or the world's entire economy and lasts for a few months or more. In some ways, the best way to understand the recession is to compare it to "regular" or positive economic activity and GDP. GDP (gross domestic product) is essentially the combined value of the goods and services made by an economy, like the American ...

Income tax can take a big bite out of your wallet and your business's bottom line. But not every state in the union charges income tax. Some states, like Texas, have become well-known as business havens for budget-minded entrepreneurs partly because they don't charge income tax. For comparison, here are the nine states with the highest income tax rates: California - 13.30% Hawaii - 11.00% New York - 10.90% New Jersey - 10.75% Oregon - 9.90% Minnesota - 9.85% Vermont - 8.75% Iowa - 8.53% Wisconsin - 7.65% This article will look at nine states with no income tax and explore everything taxpayers need to know about these tax-reduced territories. What is income tax? Income tax is a crucial source of revenue for state and federal governments worldwide. There are several types of income tax that you might have to pay depending on where you live. An individual income tax is levied on individuals' wages, salaries or other income. States usually impose these....

Angie Noll is the Owner of Reconciled Solutions. She is a Certified Profit First Advisor and has an MBA from Loyola (Chicago). Fall is in the air, and I’m breathing in the scents of fourth-quarter planning. As an entrepreneur, I revel in wiping the slate clean. This is when creativity and dreaming flow. And as the owner of a company that specializes in bookkeeping and profit acceleration, I think this is a particularly good time to create your sales forecast for the upcoming year. Before getting started, I suggest taking stock of the past 12 months, noting market changes and measuring how you were able, or unable, to adapt. Entrepreneurship is a fluid journey, and the outcome of even the best-laid plan will never fully match up with the goals you developed in the prior year. It’s crucial to be able to look back at last year’s plan and identify where changing circumstances made some fluidity necessary. How did shifting your plans impact your volume, margins, energy levels and ...

Talking about and handling money is one of the most complicated aspects of being an adult. And for many of us, the conversation can get uncomfortable fast. Whether that’s parsing through finances with your partner or negotiating salary at work, the issue can be a source of anxiety and discomfort. And while it’s normal to be a bit reluctant when it comes to cash talk, sometimes your negative feelings toward money come from past financial trauma. A condition you may not even be aware of. So, what is financial trauma? “Financial trauma is a financial wound or injury that can cause disruptive behaviors with money,” explains Stephanie Genkin, Certified Financial Planner (CFP), Certified Financial Therapist (CFT-1) and founder of My Financial Planner, LLC. “We tend to think of trauma as something extreme, but it’s not limited to dramatic events.” That means even the smallest incident can forever affect how you deal with money. In the same way that emotional o...

Some 93% of small business owners are worried that the United States will enter a recession in the next six months, a survey released by Goldman Sachs showed on Wednesday, with a majority of firms saying the country was headed in the wrong direction. In the same survey a year ago, with increased vaccinations promising an end to the COVID-19 pandemic, businesses were more optimistic and 67% said the United States was headed in the right direction. That has reversed in the latest version, 61% of responding firms said the United States was on the wrong track. Some 78% of small business owners said the economy has got worse in the past three months, with only 5% saying it had improved. Over the same period, 84% said hiring challenges had worsened and 80% said inflationary pressures had increased. This quarterly survey is the first time the recession question has appeared. It found that 6% of respondents were not worried at all about a recession, while 1% said they did not know. ...

How many entrepreneurs are as confident now as they were before the Covid-19 pandemic began? Yes, we know the majority of the S&P 500 are companies that began in down markets. And yes, the best entrepreneurs intuitively use hard times to lean in and listen even harder to their market and customers, innovating where necessary and making their companies more resilient than ever before. But for many of us, the current climate feels different. The exits many or even most were aiming for are now delayed or entirely different. Consumers are different in ways we could not have predicted. Employees are different and even the fundamental forms of employment have changed. Given this, is it still possible to become financially secure enough to retire? From my perspective, it absolutely is, but quite possibly through different methods than the ones you’d expected. I believe we can build a map for what we need to do now in four words: Think like Warren Buffett. That’s it. But when I s...

August 17, 2021 6 min read This story originally appeared on MarketBeat You know the long list of investment regrets: Not starting to invest soon enough, selling at the wrong time, going for the safe option, et cetera, et cetera.  However, the only path forward can sometimes involve… well, simply moving forward. Here's how to deal with the investment regrets you sometimes encounter at any point during your investing life and future. Tip 1: Keep your goals top of mind. What goals do you have for your financial future? Do you want to save enough money to retire by 60? Have money to send your kids to college?  Whatever missteps you made in the past, you can wipe them out by becoming completely goal-oriented. Figure out how much you need to invest using MarketBeat's retirement calculator, then break that amount down into monthly contributions. Let's say that in order to retire by 60, you need to save $40,000 per year. Break that into a monthly contribution. In t...

In an ever-changing business landscape, scaling operations in a healthy way is a primary goal (and challenge) for many small businesses. Especially in a post-pandemic world, entrepreneurs must keep current on the latest technology and utilize best practices to attract and retain customers. If you’re looking to scale your small business, here are four expert tips on how to do so sustainably from a recent CO— Roadmap to Rebuilding panel. Leverage Technology and Know Your Audience to Expand Your Reach Michelle Aragon, vice president of brand marketing and strategy at Spectrum Reach, encouraged business owners to leverage technology to stand out from their competitors. “As technology advances, consumption shifts,” Aragon explained. “Customers have new places to access content … [so] businesses need to think about new ways to connect with audiences.” Beyond using technology, Aragon recommended that entrepreneurs first get an understanding of their audience, and then work on...

Some 117 million Americans — age 50 and up — are arriving in the promised land of post-pandemic spending. It's scary. It's exciting. It's confusing. And, yes, it's different than the world they left. Are the actions that used to be OK pre-pandemic — in terms of spending and saving — still OK? What has changed in the world of personal finance over the past 14 months, since the pandemic got its terrible grip on the nation? If you're an older American, are there specific actions you should be taking right now even as the pandemic clouds start to fade? For some workers in their 50s and 60s who kept their jobs, saving money wasn't necessarily so difficult during the pandemic. For them, basic pleasures like traveling and eating out became no-no's — and many also received hearty financial bumps from stimulus payments — so saving was easier. For others, particularly those who lost their jobs or whose businesses or incomes took a hit, it remains a serious str...

As the pandemic slowly begins to wind down, economists are taking the pulse of small business. Their performance is critical to the overall U.S. economy, with small businesses employing nearly half of the workforce, creating two-thirds of net new jobs and accounting for 44 percent of economic activity. A survey by Clutch identified the four greatest financial challenges they faced in 2020: +Revenue. Thirty-one percent said their main financial challenge was a decline in revenue. Forty-five percent of businesses with up to 10 employees experienced reduced revenue. +Surprise expenses. Unforeseen business expenses were the main challenge for 11 percent of small businesses. +Financial expertise. One in 10 said their biggest challenge was lacking the expertise or experience necessary to manage business finances. +Assets. A lack of capital was the biggest challenge for 8 percent of small businesses. In a separate survey, Huckleberry, a small-business insurance provider, looked...