What is Sales Force Automation?

Sales Force Automation, also known as SFA, is a technique of using software to automate the day to day business tasks of sales, including order processing, contact management, sharing information, inventory monitoring and control, order tracking, customer management, sales forecast analysis and employee performance evaluation.
SFA may be used in conjunction with CRM; however you should note that CRM (Customer Relationship Management) is not the same as sales force automation, they are in fact different terms altogether.

The Sales force automation (SFA) application is able to provide businesses with much better results than they would otherwise have. When searching for Sales Automation solutions it’s infinitely important that the application you choose is comprehensive and easy to customize. Another benefit of SFA is that Sales Representatives can spend more time making the sale and less time in the administrative process, which is a big plus. It enhances the ability to manage time more effectively and allows for a better sales management program.

This technology can help your sales force better manage contacts, be more organized, and generate higher sales. If growth is part of your company agenda, then sales force automation is one of the best investments you could make for your company. Productivity and a good supply of qualified leads are important and companies are able to benefit much from the automation of their sales force.

Sales Force Automation (SFA) and Customer Relationship Management (CRM), have come a long way over time and it seems to be going back to a closer association with its roots. SFA is appearing everywhere in industry guides and in company marketing materials with a much higher frequency than it used to. Individuals are beginning to realize how important SFA and CRM are to their productivity and its ability to increase their profit base.

Any good sales rep knows the value of a good personal data assistant and new products that provide contact management have become every sales rep’s best friend. That PDA that now has all your contacts, calendar, and memos, was made possible by contact management software. The same thing is being done with SFA as well. All in all, Sales force Automation is a cutting edge technology you can utilize for your own business.

Car Problems? Tips for Finding a Reputable Mechanic

The cost of car repair services varies greatly depending on the mechanic you choose, your location, your vehicle make along with a bunch of other factors. Like anything, if you are educated about vehicle repairs and maintenance you’re less likely to get “ripped off.”

Use these 7 tips to choose a reputable car mechanic.

1. Ask your friends and family. Almost everyone has had a bad experience with a car repair. It’s hard to feel like you’re not getting ripped off when you aren’t educated about that type of repair or cars in general. Friends and family that have gone through the process of sourcing and hiring a car mechanic will be more than happy to share an honest review of their experience. If they’ve had a negative experience, they will want to make sure that you don’t go through the same thing. Ask around.

2. Look online. What do online review sites say about the car mechanic you’re considering? Is there a pattern of poor customer service? Do the reviewers indicate whether they would use the mechanic again? Are there issues with cost?

3. Once you’ve narrowed down your search to three or four shops, refine your research. How long have the shops been in business? If they’ve been in business for several years you can probably assume that they have skilled mechanics that can do the job in a timely manner.

4. Are they members of national auto repair organizations? Again, membership in well-respected associations indicates a mechanic’s commitment to the industry. It also shows that they are interested in improving their skill, service and process.

5. Have they won awards in the car repair industry? Look for leaders. Does the company take pride in what they do?

6. Get a price quote. Is the moving company competitively priced? Be sure to get any quotes in writing and find out what circumstances could cause the estimated price to increase.

7. Finally, what does your gut reaction tell you? Do you an uneasy feeling at the mechanic’s shop? Do you feel like they are transparent in their process or do you feel like they have something to hide? Do they care about making you feel comfortable?

Keep in mind that if it is too daunting to find a reputable mechanic, you can always get a membership to a car repair service like Repair Advocates. RepairAdvocates.com is a car repair program that sources reliable and cost-effective mechanics, negotiates car repairs and handles the communication with the car mechanic so you don’t have to. Sign up for a free trial on the website.

Starting An Online Business – What You Need To Know

If you’re thinking of starting an online business, there are some key issues and areas you need to address to get your dreams off the ground.

Why are you starting an online business?
You need to clearly identify your reasons for starting this business. Are you appealing to a gap in the market that you’ve noticed or are you basing your business on your passions and lifestyle? Do you want to establish this business purely for financial gain or to, first and foremost, meet a consumer need or demand? It doesn’t matter which of these reasons you claim as your reason for starting an online business, it’s only important that you clearly identify your reasons and intentions. If you know why you are embarking on this particular journey, you have a greater idea of what goals you will put in place and the direction in which you’d like to be heading. A clear direction will feed into clear goals, and once you establish your business goals, you can construct an online strategy to achieve these goals. At that point on the process, you can then decide whether you want to go it alone or employ the services of an online marketing specialist to really give your strategy some additional drive.

Identify your target audience
You need to know your target audience inside and out. Without a clear idea of the group you are marketing to, how will you market your business towards them? Ask yourself questions about your ideal audience: how old are they? What gender are they? What are their likes and dislikes? What problems do they need solutions for? The more you know about this group of people, the more you can target your marketing efforts to entice their business and increase your sales success.

An excellent example is analysing the target market of a retail fashion store. It is a boutique store or budget friendly? Is it targeting young females or catering to the needs of tall men? The best way to determine your target market (and thus, how you will market your business to them) is by sitting down and putting yourself in their shoes. Figure out their likes, dislikes, their needs, and so on, and you’ll have a firm base from which to develop an online strategy for your business.

Create an enticing website
Unless you’re an accomplished designer, here is when you will almost definitely need to employ a professional graphic designer or online marketer to design your business website. This is a job for professionals because your website design will need to encompass a strong brand image, captivating content, and enticing design elements to tie it all together. More often that not, your website will be the deciding factor in whether prospective customers will purchase from you or make an enquiry – and you have about three seconds to make a positive impression. So copious amounts of text or headache-inducing graphics should be used sparingly, if at all. And remember, consistency is key; whether in the context of branding, font choices, logos, or colour coordination, always make sure you are consistent across all your brand collateral – both offline and online.

Take advantage of traffic generating tools
By traffic generating tools, I mean Search Engine Optimisation (SEO) and Pay-Per-Click Advertising (PPC) resources. You can utilise particular keywords relating to your business and SEO tools to push your business’ website listing higher in search engine rankings. More people are likely to click on the first few search results and this gains your business increased online credibility and weight. Search Engine Optimisation is also a practice that is absolutely free to use. Pay-Per-Click Advertising, though not free, is a quick and effective way to get your business noticed on popular search engines. PPC Advertising positions your advertisements in the ‘featured’ areas on search engines and using PPC, you have a higher number of resources to monitor, track, and adjust your advertising efforts. Ever see those sidebar adds that creep up when you Google something? Those are feature ads, and your business could be the next feature.

Track, reassess, and refine your processes
Google Analytics and AdWords are paid advertising methods that enable you to keep track of your site rankings, visitor data, keyword performance, and much more so that you can pinpoint the successful and underperforming aspects of your marketing and advertising campaigns. You can track this information down to the smallest detail and modify elements of your efforts to achieve short-term goals quickly and efficiently. And I do mean down to the smallest detail; you can monitor which keyword is the weakest link in your efforts, how many clicks your links get on any given day, and how quickly people bounce back from your site. All of this information is exceedingly valuable when trying to build a strong online business.

PPC Advertising is ideal for short-term performance goals and SEO is ideal for long-term goals, but used together, they can help your business build online credibility and drive online traffic.

These are some essential components you need to consider when starting an online business.

Equity Research for Value Investing

Despite many of the negatives that we hear about DCF-based stock valuation these days, it is still a mainstream method for stock valuation as part of fundamental equity research. In his 1992 Berkshire Hathaway (BRK.A) annual report concerning the DCF stock valuation method, Warren Buffett stated “In the Theory of Investment Value, written over 50 years ago, John Burr Williams set forth the equation for value, which we condense here: The value of any stock, bond or business today is determined by the cash inflows and outflows – discounted at an appropriate interest rate – that can be expected to occur during the remaining life of the asset.” Many of the popular stock market report bands equity analysis resources that retail value-investors rely on utilize this stock valuation method. This article will examine the strengths and weaknesses of DCF-based intrinsic value calculations and why it is importing for value investing.

Let’s review the main weaknesses of DCF-based stock valuation.

The first is that it requires us to predict cash flows or earnings long into the future. Data shows that most equity analysts cannot predict next-year’s earnings accurately. On a macroeconomic level, the “experts” have a terrible track record in predicting jobless claims, the year-end S&P, or GDP. This is no different when it comes to projecting the future cash flow of a business when picking stocks. We have to admit to ourselves that we have tremendous limitations in the ability to forecast future cash flows based on past results and recognize that a small error in the forecast can result in a large difference in the stock valuation.

The second challenge is determining the appropriate discount rate. What is the discount rate? Should we dust off our college or graduate school notebook and look at the CAPM, which calculates the discount rate as the risk-free rate plus the risk premium?

Well, since this I learned this formula from the same guy (by business school finance professor) that convinced me as a 22-year old, wet-behind the ears student that markets are efficient, I am skeptical. The most famous value investor Warren Buffett’s public comments about the issue have evolved as he has stated that he uses the long term US treasury rate since he tries “to deal with things about which we are quite certain but reminded us in 1994 that “In a world of 7% long-term bond rates, we’d certainly want to think we were discounting the after-tax stream of cash at a rate of at least 10%. But that will depend on the certainty that we feel about the business. The more certain we feel about the business, the closer we’re willing to play.” I’m inclined to take these seemingly contradictory guidelines from Buffett and from there derive a reasonable estimate of the discount rate as part of my stock research. With the September 1, 2011 30-Yr treasury yield at 3.51%, we must think that our discount rate for large cap stocks is closer to 10% than to the risk-free rate.

Finally, the problem with determining a feasible growth rate is that a DCF will simulate the growth rate to be eternal, and we know that no business can sustain an above-average growth rate in perpetuity.

Let’s now move to the strengths of a DCF model as a stock valuation tool.

George Edward Pelham Box, a Professor of Statistics at the University of Wisconsin, and a pioneer in the areas of quality control and experimental models of Bayesian inference famously remarked:

All models are wrong, some are useful.

I would argue that the DCF model can provide a useful stock valuation estimate as part of fundamental stock research if the user follows the following principles:

1. Invest in companies that have a sustainable competitive advantage. Stock investing should be though of as ownership interests in these companies.

2. As Buffett alluded to in his 1994 letter, certainty in the business is essential. I therefore look at different measures of stability in revenues, earnings, book value, and free cash flow as part of my equity research.

3. Your stock research should include through due diligence in analyzing companies financials (income statement, balance sheet, cash flow statement, efficiency ratios, and profitability ratios over at least a 10-year period of time.

4. Before using a DCF stock valuation model or a PE and EPS estimation method for valuation, kick the tires by using a valuation model that requires no assumption of future growth. Jae Jun at http://www.oldschoolvalue.com has some very nice articles and examples on this topic (reverse DCF and EPV). I like to use the Earning’s Power Value (EPV) model (described below).

5. Look at simple relative valuation metrics such as P/E, EV/EBITA, PEPG, P/B etc.

6. Employ conservative assumptions of growth and a discount rate between 8-13%.

7. A healthy dose of intellectual honesty is needed so as not to modify the key growth and discount rate assumptions to arrive at a pre-conceived intrinsic value.

8. Always use a Margin of Safety!

As mentioned, I am a big fan of Professor Bruce Greenwald’s Earnings Power Value calculation. Earnings Power Value (EPV) is an estimate of stock valuation that puts a value of a company from its current operations using normalized earnings. This methodology assumes no future growth and that existing earnings are sustainable. Unlike discounted cash flow models, EPV eliminates the need to predict future growth rates and therefore allows for more confidence in the output. It is a valuable tool as part of thorough equity research.

The formula: EPV= Normalized Earning’s x 1/WACC.

There are several steps required to calculate EPV:

1. Normalization of earnings is required to eliminate the effects on profitability of valuing the firm at different points in the business cycle. This means that we consider average EBIT margins over the past 10, 5, or 3- years and apply it to current year sales. This yields a normalized EBIT.

2. Subtract the average non-recurring charges over the past 10 years to the normalized EBIT.

3. Add back 25% of SG&A expenses to, as a certain percentage of SG&A contributes to current earnings power. We use a default add back of 25%. This assumes that the company can maintain current earning’s with 75% (1-input) of SG&A. The input range can be 15-25% depending on the industry. Where applicable, repeat for research and development expenses.

4. Add back depreciation for the current year. We use a default add back of 25%. This assumes that the company can maintain current earning’s with 75% (1-input) of capital expenditures. The input range can be 15-25% depending on the CapEx requirements of the industry.

5. Subtract the net debt and 1% of revenues from normalized earnings (this is an estimate of cash required to operate the business)

6. Assign a discount rate (or calculate WACC if you wish).

7. Earnings Power of Operations = Earnings of the firm * 1/cost of capital

8. Divide the EV of the firm by the number of shares, to get Price per share.

The DCF stock valuation model.

In this 3-stage DCF model, free cash flow growth rates for years 1-5, 6-10, 11-15, and the terminal rate, are estimated. The sum of the free cash flow is then discounted to the present value.

The formula for a DFC model is as follows:

PV = CF1 / (1+k) + CF2 / (1+k)2 +… [TCF / (k – g)] / (1+k)n-1

Where:

• PV = present value

• CF1 = cash flow in year I (normalized by linear regression or 10, 5, 3-yr average of FCF)

• k = discount rate

• TCF = the terminal year cash flow

• g = growth rate assumption in perpetuity beyond terminal year

• n = the number of periods in the valuation model including the terminal year

Again, we must recognize that intrinsic value that is produced by our model is only as good as the numbers put into the model. If as part of our stock research we assume unrealistic growth rates (or terminal value), or discount rates, you will get an unrealistic intrinsic value result. No stock valuation model is going to magically provide the completely accurate intrinsic value but, if you are conservative and intellectually honest, and dealing with a company with solid underlying economics in addition to a long track record, you can find this method useful in identifying stocks that are priced below their intrinsic value. Buffett seemed to do OK for himself using this methodology so, if you follow the above principles, you can too.

How to Judge Automated Systems to Make Money From Home

In the Make Money from Home industry, as some of us call it, we continue to see business opportunities that run like a automatic vending machine on the internet. It’s like seeing an advertisement and an informational website, liking what you see and joining without talking to a person.

Opportunities that have you Plug-In to their automated system is another term used in the industry where you simply join a well thought out plan and you use the materials they supply for you to run the business without much human contact.

I have written in the past about how you must be able to contact the sponsor and get the right answers in order to feel comfort in your not being scammed. The question therefore arises, “Considering the number of automated systems without apparent human contact do I still feel comfortable in the advice I have written?”

That is a good question for anyone to ask, because nobody wants to “be taken” and there are so many good opportunities found on the internet that a blanket statement like “you must be able to talk to the sponsor” is just a little short sighted, if taken out of context.

The meaning behind any statements I’ve made about needing to contact the sponsor is this. If you want to get the highest degree of comfort you must contact the sponsor. That does not mean all other opportunities are scams. In fact some of the best opportunities are as close to being fully automated as is possible.

So let me identify some things you should consider while making a decision when you have some but little way of contacting the sponsor and asking important questions. These considerations are pretty simplistic but if you’re at all like me you can get pretty mixed up when looking at all of the opportunities to choose from and therefore simplification can be helpful.

1. How well put together is the information about the opportunity, may be a sign about how much thought was put into the business opportunity. Usually well thought out opportunities are signs of quality.

2. Are all of your questions answered in the sales websites and informational e-mails you read about the opportunity.

3. Are you able to “Google” the person responsible for the program and find good reviews and comments made about the product and the person. This is sometimes a hard one because there are those who write bad comments about good people and good opportunities. But it is worthwhile reading nonetheless as you should be able to decide for yourself if the comments are real.

4. In some cases you know the sponsors name and that may be good enough to know if they have conducted themselves with integrity on the internet in the past.

5. Is the price low enough that you would not loose any sleep if it did not happen to work out. Sometimes you like an opportunity so much that you feel it’s worth a chance even though you can’t contact anybody about the opportunity. Don’t get me wrong here I’m not saying you should take a chance but the other questions and price point can help you decide the level of risk you are taking.

6. Does logic tell you that there is something wrong or right about the opportunity? The internet is a wide-open venue and there are few rules so sometimes you must use your gut feel along with the other items listed above that you should consider.

I found myself in the past and also know that there are others (usually new people considering making money online) that have a difficult time determining whether a business opportunity will be right for them. I have written many articles about this subject and there are many more than I have written that can give one ideas about this subject. I have given suggestions above in numbers 1 through 6 that should give you an idea of how to look for a viable opportunity for you.

But if there is one single thing as important as anything else it is this. Do not be lazy, do your research. If you do the research, you will be taking into consideration warning signals as well as positive signs and have sufficient information for you to make an educated decision.