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Practical Tips on Reducing Financial Risks to Your Business

September 17, 2015 by · Leave a Comment 

Practical-Tips-on-Reducing-Financial-Risks-to-Your-BusinessWhen you are running a business of your own, there are always risks involved. The first thing that probably comes to mind is your cash flow. When you run out of money or credit, your business ceases to operate until you begin funding it again. Risk management is one of the most important elements of a startup business. This separates the great from the successful.

When you are dealing with a limited amount of funds, you’re going to need to cut out non-essentials from your business. Things like fancy desks or expensive computers will only leave you struggling in the first few months of your startup. Your goal is to obtain positive monthly returns and by setting yourself up with all these “necessities”, you’re taking steps backwards.

Whatever helps the company services or products are what you should be focused on. Amenities will come later once you’ve reached the point where your investment has been covered and solid revenue is being produced.

Maintain a proactive approach by calculating your burn rate, which is how much money you are losing per month. By keeping a constant tab on this, you can determine how many months or years you have left with money still in your reserve.

Financial risks are always going to be associated when you create a startup business. The approach to this is appropriately preparing for what’s to come. The glory days will come in due time. The sacrifice leading to success is what makes this journey so worthwhile.

Bio: Ferhan Patel, formerly with AlertPay has implemented his certifications and skill sets to become the Chief Compliant Officer and Director of Global Risk and Compliance for Payza.



The Greek Depression: What Happened

September 2, 2015 by · Leave a Comment 

By Phin Upham

The Greek debt crisis is the most memorable of the crises to the hit the Eurozone beginning in 2009, but it was actually one of five crises at the time. Greece was struggling with fallout from the Great Recession in America, and weaknesses in the structure of the Greek economy contributed heavily to the decline of the country.

Greece was introduced to the Eurozone in 1999, when a common currency was looked at as a major benefit. Trade costs would be reduced, which would contribute to the volume of trade for Greece and hopefully raise its GDP. Initial reports suggest this largely worked as intended, with Grek GDP rising a full 10% between 1999 and 2008. Investment in the EU also came with lower rates on government bonds.

Alone, Greece represented a significant financial risk. As part of the EU, investors thought Greece would find discipline.

In 2009, the potential for Greece to miss its debt payments became clear. The country had been misrepresenting its debt, and its value, for years. Obviously, this revelation shook investor confidence in the country which led to a spread in bond yields. Greece also saw the costs for credit swaps rise.

Coupled with the effects the Great Recession had on Europe, namely the drying up of funds to the core European countries, Greece’s significant mismanagement become something more like an epidemic.

By 2012, the country had accumulated the largest sovereign debt in recorded history.

Under normal circumstances a country would allow inflation to take over, causing a brief period of economic stagnation to pay its debts back on devalued currency. Greece couldn’t do that because it was part of the Eurozone, thus sharing a common currency. This is why exiting the EU represented a viable strategy for Greece, which saw no measures other than austerity to save itself.

About the Author: Phin Uphamis an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Phin Upham website or Twitter page.