Finance Today
What is the role of finance in a typical business? Finance is the lifeblood and nerve center of a business, just as circulation of blood is essential in the human body for maintaining life; finance is a very essential to smooth running of the business. It has been rightly termed as universal lubricant that keeps the enterprise dynamic. No business, whether big, medium or small can be started without an adequate amount of finance. Right from the very beginning, i.e. conceiving an idea to business, finance is needed to promote or establishthe business , acquire fixed assets, make investigations such as market surveys, etc., develop product, keep men and machine at work, encourages management to make progress and create values. Even an existing concern may require further finance for making improvement or expandingthe business.
What are the projections for jobs in finance of the next few years and beyond?
New research suggests fewer companies will be hiring MBAs this year, and salaries in tech, financing, and manufacturing will be flat or down By Anne VanderMey
What are the key trends, developments, and challenges? By Scott Shane
Here are my top five trends for small business finance for 2009:
1. The amount of capital provided to small and start-up companies will continue to shrink
All of the sources of finance, from venture capitalists to business angels to banks to peer-to-peer lenders, are all reducing the amount of money that they are providing to entrepreneurs. Until the problems in the credit markets get resolved and the economy starts to grow again, it’s very unlikely that we will see a reversal of this trend. Getting money will be difficult for entrepreneurs in 2009.
2. Investors in start-up companies will continue to face a poor market for exiting from their investments
The IPO market is in a deep slump and there is little indication that it will emerge from that downturn in 2009. With the economy in recession and sentiments turned against investments in public equities, it’s hard to see how any but the handful of start-ups with already strong positive cash flow will go public in the coming year. The market for acquisitions looks almost as bad. Few companies can raise debt to acquire other businesses right now, and, with the stock market down, acquisitions with company stock are difficult to pull off. Until the economy gets moving again, the acquisitions market should stay in the doldrums.
3. Methods for internally financing companies will grow in popularity
With sources of external financing remaining difficult to tap in the coming year, we will see the emergence and growth of creative ways to finance businesses internally. For instance, companies that help people tap their 401Ks to finance their businesses, and consultants that advise entrepreneurs on ways to bootstrap their growth, will grow in popularity.
4. Government officials won’t pay much attention to entrepreneurial finance
With massive job losses and big companies on the brink of failure, policymakers won’t make 2009 the year that they adopt major new policies toward entrepreneurial finance. No one in the government will be re-reading Josef Schumpter to figure out how to stimulate the process of creative destruction. Instead, they will be focused on the opposite – bailing out big companies. Virtually of all the ideas for changes to entrepreneurial finance that had been floated previously – such as cutting capital gains taxes on start-ups and funding new high tech companies – will be driven off the agenda by a focus on fixing the problems faced by big businesses.
5. Attitudes toward financing start-ups and small businesses will change
During 2009, a new realism about entrepreneurial finance will continue to emerge. Entrepreneurs are beginning to recognize how difficult it is to raise money for their companies , and are beginning focus more on finding the right sources of capital for their businesses. Moreover, they are becoming less willing to start businesses with little chance of getting needed capital. At the same time, investors, like venture capitalists and angel groups, are lowering their expectations of how much money they will make off of their investments and are increasing their expectations of how long it will take to exit from them. The shift toward greater realism about entrepreneurial finance will accelerate during 2009, bringing us back from the inflated views of recent years.
Some the Challenges that i have seen is that there are many people without an income and many companies are having to lay off a lot of workers.... just that it is not a very good market with all the bad rap of all the banks failing and such.
What are where are the opportunities?
What are the opportunities for career growth?
What are the projections for jobs in finance of the next few years and beyond?
New research suggests fewer companies will be hiring MBAs this year, and salaries in tech, financing, and manufacturing will be flat or down By Anne VanderMey
What are the key trends, developments, and challenges? By Scott Shane
Here are my top five trends for small business finance for 2009:
1. The amount of capital provided to small and start-up companies will continue to shrink
All of the sources of finance, from venture capitalists to business angels to banks to peer-to-peer lenders, are all reducing the amount of money that they are providing to entrepreneurs. Until the problems in the credit markets get resolved and the economy starts to grow again, it’s very unlikely that we will see a reversal of this trend. Getting money will be difficult for entrepreneurs in 2009.
2. Investors in start-up companies will continue to face a poor market for exiting from their investments
The IPO market is in a deep slump and there is little indication that it will emerge from that downturn in 2009. With the economy in recession and sentiments turned against investments in public equities, it’s hard to see how any but the handful of start-ups with already strong positive cash flow will go public in the coming year. The market for acquisitions looks almost as bad. Few companies can raise debt to acquire other businesses right now, and, with the stock market down, acquisitions with company stock are difficult to pull off. Until the economy gets moving again, the acquisitions market should stay in the doldrums.
3. Methods for internally financing companies will grow in popularity
With sources of external financing remaining difficult to tap in the coming year, we will see the emergence and growth of creative ways to finance businesses internally. For instance, companies that help people tap their 401Ks to finance their businesses, and consultants that advise entrepreneurs on ways to bootstrap their growth, will grow in popularity.
4. Government officials won’t pay much attention to entrepreneurial finance
With massive job losses and big companies on the brink of failure, policymakers won’t make 2009 the year that they adopt major new policies toward entrepreneurial finance. No one in the government will be re-reading Josef Schumpter to figure out how to stimulate the process of creative destruction. Instead, they will be focused on the opposite – bailing out big companies. Virtually of all the ideas for changes to entrepreneurial finance that had been floated previously – such as cutting capital gains taxes on start-ups and funding new high tech companies – will be driven off the agenda by a focus on fixing the problems faced by big businesses.
5. Attitudes toward financing start-ups and small businesses will change
During 2009, a new realism about entrepreneurial finance will continue to emerge. Entrepreneurs are beginning to recognize how difficult it is to raise money for their companies , and are beginning focus more on finding the right sources of capital for their businesses. Moreover, they are becoming less willing to start businesses with little chance of getting needed capital. At the same time, investors, like venture capitalists and angel groups, are lowering their expectations of how much money they will make off of their investments and are increasing their expectations of how long it will take to exit from them. The shift toward greater realism about entrepreneurial finance will accelerate during 2009, bringing us back from the inflated views of recent years.
Some the Challenges that i have seen is that there are many people without an income and many companies are having to lay off a lot of workers.... just that it is not a very good market with all the bad rap of all the banks failing and such.
What are where are the opportunities?
What are the opportunities for career growth?
Finance Careers
1. Financial analysts work for businesses to help them or their clients make investment decisions. Analysts must have a bachelor's degree, often in business administration, accounting, statistics or finance, analysts with a master's degree in business administration will find themselves among the most desirable employees.
Average salary: $58,205/year*;
With benefits and bonuses: $73,594
2. Personal financial advisors use their knowledge of investments, tax laws and insurance to recommend financial options that help individuals meet their short- and long-term goals. Advisors with a bachelor's degree in accounting, finance, economics, business mathematics or law will have the best opportunities for jobs in their field.
Average salary: $66,405/year;
With benefits and bonuses: $85,553
3. Accountants analyze, plan, evaluate and advise on matters of accounting theory and practice. A bachelor's degree in accounting or a related field is usually required, but those with a master's degree or experience to boot will have better job opportunities.
Average salary: $43,215/year
With benefits and bonuses: $52,813
4. Auditors examine and analyze accounting records and prepare financial reports for clients. Auditors usually need a bachelor's degree, but as with accountants, experience and advanced degrees increase their chances of getting hired.
Average salary: $57,365/year;
With benefits and bonuses: $68,138
5. Loan officers assist individuals and organizations in applying for loans, assess the individuals' creditworthiness and help them determine the most appropriate type of loan for his/her needs. Employers usually require loan officers to have a bachelor's degree in finance, economics or a related field. Loan officers will find experience in banking, lending or sales and knowledge of computers to be huge assets in their job search.
Average salary: $48,318/year;
With benefits and bonuses: $58,685
6. Collectors keep track of accounts that are overdue and attempt to collect payment on them, making computer literacy and good communications skills a must in this job. Most collectors are required to have at least a high school diploma; however, employers prefer workers who have completed some college or who have experience in other occupations that involve contact with the public.
Average salary: $27,960/year;
With benefits and bonuses: $33,215
7. Bank tellers cash checks, accept deposits and loan payments and process withdrawals. They also may sell savings bonds and travelers' checks, accept bill payments and process paperwork. Most tellers have at least a high school diploma, but people with bachelor's degree in business, accounting or liberal arts may get jobs as tellers to break into banking with the hopes of being promoted.
Average salary: $19,828/year;
With benefits and bonuses: $24,793
8. Buyers buy the goods and services a company needs either to resell to customers or for the establishment's own use. Educational requirements vary with the size of the organization, but many manufacturing firms prefer applicants with a bachelor's or master's degree in engineering, business, economics or one of the applied sciences.
Average salary: $44,919/year;
With benefits and bonuses: $54,428
9. Treasurers direct an organization's financial goals, objectives and budgets. Their duties may include overseeing the investment of funds and executing capital-raising strategies. Employers require a bachelor's degree in accounting, finance, economics or business administration; however, employers increasingly are placing emphasis on advanced degrees in these fields.
Average salary: $97,645/year;
With benefits and bonuses: $130,957
10. Budget analysts provide analysis and assistance to help companies develop their annual budgets, decide how to allocate current resources and estimate future financial requirements. A bachelor's degree -- often in finance, economics, accounting, business, statistics, political science or sociology -- is the minimum requirement for most employers, but an advanced degree is often preferred and sometimes required.
Average salary: $55,566/year;
With benefits and bonuses: $67,586
Average salary: $58,205/year*;
With benefits and bonuses: $73,594
2. Personal financial advisors use their knowledge of investments, tax laws and insurance to recommend financial options that help individuals meet their short- and long-term goals. Advisors with a bachelor's degree in accounting, finance, economics, business mathematics or law will have the best opportunities for jobs in their field.
Average salary: $66,405/year;
With benefits and bonuses: $85,553
3. Accountants analyze, plan, evaluate and advise on matters of accounting theory and practice. A bachelor's degree in accounting or a related field is usually required, but those with a master's degree or experience to boot will have better job opportunities.
Average salary: $43,215/year
With benefits and bonuses: $52,813
4. Auditors examine and analyze accounting records and prepare financial reports for clients. Auditors usually need a bachelor's degree, but as with accountants, experience and advanced degrees increase their chances of getting hired.
Average salary: $57,365/year;
With benefits and bonuses: $68,138
5. Loan officers assist individuals and organizations in applying for loans, assess the individuals' creditworthiness and help them determine the most appropriate type of loan for his/her needs. Employers usually require loan officers to have a bachelor's degree in finance, economics or a related field. Loan officers will find experience in banking, lending or sales and knowledge of computers to be huge assets in their job search.
Average salary: $48,318/year;
With benefits and bonuses: $58,685
6. Collectors keep track of accounts that are overdue and attempt to collect payment on them, making computer literacy and good communications skills a must in this job. Most collectors are required to have at least a high school diploma; however, employers prefer workers who have completed some college or who have experience in other occupations that involve contact with the public.
Average salary: $27,960/year;
With benefits and bonuses: $33,215
7. Bank tellers cash checks, accept deposits and loan payments and process withdrawals. They also may sell savings bonds and travelers' checks, accept bill payments and process paperwork. Most tellers have at least a high school diploma, but people with bachelor's degree in business, accounting or liberal arts may get jobs as tellers to break into banking with the hopes of being promoted.
Average salary: $19,828/year;
With benefits and bonuses: $24,793
8. Buyers buy the goods and services a company needs either to resell to customers or for the establishment's own use. Educational requirements vary with the size of the organization, but many manufacturing firms prefer applicants with a bachelor's or master's degree in engineering, business, economics or one of the applied sciences.
Average salary: $44,919/year;
With benefits and bonuses: $54,428
9. Treasurers direct an organization's financial goals, objectives and budgets. Their duties may include overseeing the investment of funds and executing capital-raising strategies. Employers require a bachelor's degree in accounting, finance, economics or business administration; however, employers increasingly are placing emphasis on advanced degrees in these fields.
Average salary: $97,645/year;
With benefits and bonuses: $130,957
10. Budget analysts provide analysis and assistance to help companies develop their annual budgets, decide how to allocate current resources and estimate future financial requirements. A bachelor's degree -- often in finance, economics, accounting, business, statistics, political science or sociology -- is the minimum requirement for most employers, but an advanced degree is often preferred and sometimes required.
Average salary: $55,566/year;
With benefits and bonuses: $67,586
Finance Mentor:
Discussion with:
Josh Pena
Date:
11-24-09
Objectives
What do you really want to get out of this interview? What would make it successful for you?
To understand the part of finance that is involved in a company. Helping out a friend.
Marketplace
What are your projections for this type of work or industry? Is it stable, growing, declining?
Well it is growing but for bankers and the realtors have hit a wall and that wall is going to be there for a couple years more. But yes it is growing collectively.
What are the key trends or issues? New developments? Key challenges?
Trends are going green and some of the issues are losing your job. Some new developments are stricter reforms in mortgages and less loans given.
What and where are the opportunities?
The opportunities are the banking industry it good also investment firms.
What are typical salaries in this type of job, entry-level to experienced? What are the opportunities for career growth?
The typical salaries can be from the regular $15 dollar job to making about $150,000. There is a lot of career growth because I got to being a manager in only a couple of years.
Entry into Position
When and how did you get involved in this work?
I started working as a teller and my brother was already in this line of work and our family has always been involved with money.
What was your training and background? Is this typical for people in your position and in similar positions?
Well they trained me in the basics which involved working with our computer software that simulates having clients and then we do frequent training secession because of our company working around the recession.
How important are specific credentials for entry or success?
Having an education always help but having a good personality and being a good people’s person as well helps but with credentials having a bachelors in accounting or some finance field makes you pretty valuable to the bank.
Job Specifics
What’s a typical day like for you or someone in a similar position?
Well I get there and I make sure of the amount of money that we have and the project usage of that money and make sure that everyone else is making their quotas for the quarter.
What do you like most about your work?
I like working with my coworkers and working with my client helping them is something that I like about my work.
What do you like least?
What I don’t like is all the stress that is put on you and all the complaints that you get from people that are upset about the service or anything that they want to complain about.
What talents or skills do you think are the most crucial to success in this work?
Being a people’s person and being able to work under stress and to be able to put forth the work needed to make your quota.
What attitudes or values are important?
What attitudes are valuable are having a happy attitude even when the higher ups are pressing you to have your people do more with less and they value honest people because we are working with a lot of money here you are talking about transactions and such in the millions of dollars.
Who doesn’t do well in this type of work?
Those that don’t do to well in this are those that are tempted to take even a penny because you will get caught but also those are not a peoples person.
How do you advance or get promoted in this type of work?
By doing your job and by doing a good one too. By putting up honest numbers shows to the bosses that you are will to do whatever it takes to get your quota.
Recommendations
Would my background be appropriate for this type of work?
Yeah you are pretty good with people but make sure that you do your work or you will be fire.
What would you recommend I do if I want to go into this type of work?
Make sure that you were to go into some finance classes at college because like I said that you will be getting a better job to begin with then just someone that is applying just from off the streets.
Are there other jobs similar to yours that you would suggest I also consider?
Hum I think that my job is the best haha no really I would suggest that if you were to go into a similar job I would suggest in getting into some investment firms or becoming a stockbroker.
Can you recommend other people I can talk to, or other resources I can check out?
Sure you have our banks website.
Knowing what you do now, would you approach this career (or job) in the same way? If not, what would you do differently, and why?
I would have gone to school first then just working there for the money. I also would have not have lost my job by leaving it so make sure that you don’t let your temper and pride get in front of you in losing your job.
Josh Pena
Date:
11-24-09
Objectives
What do you really want to get out of this interview? What would make it successful for you?
To understand the part of finance that is involved in a company. Helping out a friend.
Marketplace
What are your projections for this type of work or industry? Is it stable, growing, declining?
Well it is growing but for bankers and the realtors have hit a wall and that wall is going to be there for a couple years more. But yes it is growing collectively.
What are the key trends or issues? New developments? Key challenges?
Trends are going green and some of the issues are losing your job. Some new developments are stricter reforms in mortgages and less loans given.
What and where are the opportunities?
The opportunities are the banking industry it good also investment firms.
What are typical salaries in this type of job, entry-level to experienced? What are the opportunities for career growth?
The typical salaries can be from the regular $15 dollar job to making about $150,000. There is a lot of career growth because I got to being a manager in only a couple of years.
Entry into Position
When and how did you get involved in this work?
I started working as a teller and my brother was already in this line of work and our family has always been involved with money.
What was your training and background? Is this typical for people in your position and in similar positions?
Well they trained me in the basics which involved working with our computer software that simulates having clients and then we do frequent training secession because of our company working around the recession.
How important are specific credentials for entry or success?
Having an education always help but having a good personality and being a good people’s person as well helps but with credentials having a bachelors in accounting or some finance field makes you pretty valuable to the bank.
Job Specifics
What’s a typical day like for you or someone in a similar position?
Well I get there and I make sure of the amount of money that we have and the project usage of that money and make sure that everyone else is making their quotas for the quarter.
What do you like most about your work?
I like working with my coworkers and working with my client helping them is something that I like about my work.
What do you like least?
What I don’t like is all the stress that is put on you and all the complaints that you get from people that are upset about the service or anything that they want to complain about.
What talents or skills do you think are the most crucial to success in this work?
Being a people’s person and being able to work under stress and to be able to put forth the work needed to make your quota.
What attitudes or values are important?
What attitudes are valuable are having a happy attitude even when the higher ups are pressing you to have your people do more with less and they value honest people because we are working with a lot of money here you are talking about transactions and such in the millions of dollars.
Who doesn’t do well in this type of work?
Those that don’t do to well in this are those that are tempted to take even a penny because you will get caught but also those are not a peoples person.
How do you advance or get promoted in this type of work?
By doing your job and by doing a good one too. By putting up honest numbers shows to the bosses that you are will to do whatever it takes to get your quota.
Recommendations
Would my background be appropriate for this type of work?
Yeah you are pretty good with people but make sure that you do your work or you will be fire.
What would you recommend I do if I want to go into this type of work?
Make sure that you were to go into some finance classes at college because like I said that you will be getting a better job to begin with then just someone that is applying just from off the streets.
Are there other jobs similar to yours that you would suggest I also consider?
Hum I think that my job is the best haha no really I would suggest that if you were to go into a similar job I would suggest in getting into some investment firms or becoming a stockbroker.
Can you recommend other people I can talk to, or other resources I can check out?
Sure you have our banks website.
Knowing what you do now, would you approach this career (or job) in the same way? If not, what would you do differently, and why?
I would have gone to school first then just working there for the money. I also would have not have lost my job by leaving it so make sure that you don’t let your temper and pride get in front of you in losing your job.
Key Finance Terms
ROI is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.
Net Present Value is defined as the total present value (PV) of a time series of cash flows. It is a standard method for using the time value of money to appraise long-term projects. Used for capital budgeting, and widely throughout economics, it measures the excess or shortfall of cash flows, in present value terms, once financing charges are met.
Stocks of a business entity represents the original capital paid or invested into the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors.
Bonds is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals.
Stockholders One who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors. also called shareholder.
Government Securities Securities issued by a government to raise the funds necessary to pay for its expenses.
Mutual Fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.
SEC A U.S. government agency that supervises the exchange of securities so as to protect investors against malpractice.
Stock Markets is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.
Intial Public Offering (IPO) is when a company issues common stock or shares to the public for the first time.
Venture Capital is a type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company.
Interest Rate A rate which is charged or paid for the use of money.
Dow Jones Industrial Average an indicator of stock market prices; based on the share values of 30 blue-chip stocks listed on the New York Stock Exchange.
Net Present Value is defined as the total present value (PV) of a time series of cash flows. It is a standard method for using the time value of money to appraise long-term projects. Used for capital budgeting, and widely throughout economics, it measures the excess or shortfall of cash flows, in present value terms, once financing charges are met.
Stocks of a business entity represents the original capital paid or invested into the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors.
Bonds is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals.
Stockholders One who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors. also called shareholder.
Government Securities Securities issued by a government to raise the funds necessary to pay for its expenses.
Mutual Fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.
SEC A U.S. government agency that supervises the exchange of securities so as to protect investors against malpractice.
Stock Markets is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.
Intial Public Offering (IPO) is when a company issues common stock or shares to the public for the first time.
Venture Capital is a type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company.
Interest Rate A rate which is charged or paid for the use of money.
Dow Jones Industrial Average an indicator of stock market prices; based on the share values of 30 blue-chip stocks listed on the New York Stock Exchange.