How Much Working Capital Will I Need When I Buy a Website? :: Sell Website Buy Website

How Much Working Capital Will I Need When I Buy a Website? Question: If you buy a business and you're getting a loan, how much capital should you have available until the business starts generating income? For example, if I have $100,000 should I be looking for a business that's $50,000 keeping some back or should I look for a business that's over and try to find financing for the overage. Answer: Thank you for your excellent question. Believe it or not, many buyers overlook this and wind up in trouble soon after they acquire a business. What you are trying to determine is known as the "working capital" requirements of the business. This is the amount of money you will need available to fund the business after you take over until it becomes self-sufficient, meaning that there is enough inflow of cash to pay the bills. Unfortunately, there isn't a standard answer, but it is something that you can easily calculate. Keep in mind that every business scenario is different. For example, if you acquire a business where clients pay immediately (i.e. a retail store), then you will have an inflow of cash the first day that you take over. On the other hand, if it's a business where you grant payment terms to clients and the average time to collect is 30 days, then at a bare minimum, you will need at least one month of working capital (although I don't think that 30 day's worth is enough, but I'll explain in a moment). The other thing to consider is inventory. If you will have to purchase products to sell prior to seeing payments form clients, here too your cash flow will be affected. The best way to approach this for any business is to do a forecast for the first six months after closing. Generally, you should take the average monthly revenue for the past 2 – 3 years. Then, factor in any seasonality to the business. For example, if you are buying a water sports equipment rental business on the beach in Florida in May, you can certainly expect sales to be far lower than they will be in December. Once you determine the average sales, then you must calculate all of the fixed costs that you will incur from day one. These are all of the expenses that the business will have that are not related to the sales. For example, if you have sales people on commission, their costs are only incurred when revenue is generated.

The Demand of Samsung

I. The demand for smartphones worldwide. – The worldwide mobile phone market grew 1. 9% year over year in the fourth quarter of 2012 (4Q12), as the number of smartphone sales raised to levels nearly equal to those of other phones. 219. 4 million units in 4Q12, which represents 45. 5% of all mobile phone shipments, the highest percentage ever. On an annual basis, 712. 6 million smartphones were shipped globally in 2012, which was 44. 1% more than in 2011. Top Five Smartphone Vendors, Shipments, and Market Share Calendar Year 2012 (Units in Millions) Vendor2012 Unit Shipments2012 Market Share2011 Unit Shipments2011 Market ShareYear over Year Change 1. Samsung215. 830. 3%94. 219. 0%129. 1% 2. Apple135. 919. 1%93. 118. 8%46. 9% 3. Nokia35. 14. 9%77. 315. 6%-54. 6% 4. HTC32. 64. 6%43. 68. 8%-25. 2% 5. Research In Motion32. 54. 6%51. 110. 3%-36. 4% Others260. 736. 5%135. 327. 5%92. 7% Total712. 100. 0%494. 6100. 0%44. 1% Source: IDC Worldwide Mobile Phone Tracker, January 24, 2013 - The huge demand from all over the world -> the need for expanding the production facilities as well as the employees. II. Production plan -Over the world,Samsung has plants in 5 countries: China,Korea,Brazil,India and Viet Nam. – The Vietnam unit of the company has started construction on the plant in Yen Binh Industrial Park in Thai Nguyen province.Operation of the plant, which will mainly produce mobile phones, is expected to start from the end of the year, and production is projected to be boosted since 2014 to hit 120 million units by 2015. -Together with the current plant in Bac Ninh Industrial Area in Vietnam, the completion of the new plant will lift production capacity of Samsung's Vietnam unit to 240 million by 2015, accounting over half of Samsung's total projected capacity. Prime Minister Nguyen Tan Dung (2nd, R), leaders of Samsung and guests press the button to start work on the hi-tech complex of Samsung in Thai Nguyen >The locations of the factories have major effects on the firm’s performance as establishing factories in these countries helps reduce the cost of renting space as well as the labor cost than in other countries due to the fact that they are big countries with a high population. ->helps increase the revenue of the firm. -The more factories they build, the more benefits they gain because according to economies of scale, the average cost per unit produced declines as the firm produces more units as the facilities stay the same. ->helps sell more products-> more profit.

Geology of the Appalachian Mountains

The Appalachian Mountain range is one of the oldest continental mountain systems in the world. The tallest mountain in the range is the 6,684-foot Mount Mitchell, located in North Carolina. Compared with the Rocky Mountains of western North America, which have 50 plus peaks over 14,000 feet in elevation, the Appalachians are rather modest in height. At their tallest, however, they rose to Himalayan-scale heights before being weathered and eroded down over the past ~200 million years. A Physiographic Overview The Appalachian Mountains trend southwest to northeast from central Alabama all the way to Newfoundland and Labrador, Canada. Along this 1,500-mile path, the system is split up into 7 different physiographic provinces  that  contain distinct geologic backgrounds. In the southern section, the Appalachian Plateau and Valley and Ridge provinces make up the western border of the system and are composed of sedimentary rocks like sandstone, limestone, and shale. To the east lie the Blue Ridge Mountains and Piedmont, composed primarily of metamorphic and igneous rocks.  In some areas, like Red Top Mountain in northern Georgia or Blowing Rock in northern North Carolina, the rock has eroded down to where one can see basement rocks that formed over a billion years ago during the Grenville Orogeny.   The northern Appalachians are made up of two parts: the St. Lawrence Valley, a small region defined by the St. Lawrence River and St. Lawrence rift system, and the New England province, which formed hundreds of millions of years ago and owes much of its present topography to recent glacial episodes. Geologically speaking, the Adirondack Mountains are quite different than the Appalachian Mountains; however, they are included by the USGS in the Appalachian Highland region.   Geologic History To a geologist, the rocks of the Appalachian Mountains reveal a billion-year story of violent continental collisions and the subsequent mountain building, erosion, deposition and/or volcanism that came with. The geologic history of the area is complex but can be broken down into four major orogenies, or mountain building events. It is important to remember that between each of these orogenies, millions of years of weathering and erosion wore the mountains down and deposited sediment in the surrounding areas. This sediment was often subjected to intense heat and pressure as the mountains were uplifted again during the next orogeny.   Grenville Orogeny: This mountain-building event occurred around 1 billion years ago, creating the supercontinent Rodinia. The collision formed tall mountains along with the igneous and metamorphic rocks that make up the very core of the Appalachians. The supercontinent began to break apart around 750 million years ago and by 540 million years ago, an ocean (the Iapetus Ocean) existed between the paleocontinents.  Taconic Orogeny: Approximately 460 million years ago, as the Iapetus Ocean was closing, a volcanic island arc chain collided with the North American Craton.  The remnants of these mountains can still be seen in the Taconic Range of New York.Acadian Orogeny: Starting 375 million years ago, this mountain-building episode occurred as the Avalonian terrane collided with the North American Craton. The collision did not happen head on, as it struck the northern section of the protocontinent and then slowly moved southward. Index minerals show us that the Avalonian terrane stru ck the North American craton at different times and with different collisional forces.Alleghanian Orogeny: This event (sometimes referred to as the Appalachian orogeny) formed the supercontinent Pangea ~325 million years ago. The ancestral North American and African continents collided, forming Himalayan-scaled mountain chains known as the Central Pangean Mountains. The modern-day Anti-Atlas Mountains of northwestern Africa were part of this chain. The mountain building ended some 265 million years ago, and the ancestral North American and African continents began drifting apart ~200 million years ago (and continue to do so to this day). The Appalachians have weathered and eroded away over the past hundreds of millions of years, leaving only remnants of the mountain system that once reached record heights. The strata of the Atlantic Coastal Plain are made up of sediment from their weathering, transportation, and deposition.