Role of Tariffs in free trade

The basic meaning of free trade is that people of two different countries can do business between each other without having any interference from the government. But it doesn’t mean that two individuals can do that, only two companies can do that. It is done by the business or companies for the betterment of their organization. There are price variations in the demand and supply of the goods and services in free trade. But it is different from other trade policies. The interference of the government can bring a lot of change in the price value of the goods and services.  This interference includes taxes, subsidies, tariff and non-tariff barriers, and also some of the quotas and regulatory legislation. These interferences govern the domestic market to a high extent.

Free trade consists of some important features like trade of goods and services without any tax, no interference of government policies like subsidies, taxes, tariffs, regulations and laws, full access to the market at no cost, can gather all the information about the market without any regulation, the freedom of labors for their work and movement in between and inside the countries, movement of capital is free from laws and moves between and inside the countries. Tariffs are those taxes which are imposed on the products imported by the government. It is similar to sales tax. The rate of tariff defers from product to product. Government basically imposes these tariffs to save domestic traders and businesses and companies from other outsider companies, businesses and traders.  By doing this the government saves the domestic products to not be dumped in comparison to the products of outsider companies, because it causes money loss to the government. Foreign tariffs at a point are dangerous for the economy of the host country because it increases the rates of the products manufactured by the domestic companies because in comparison to outsider companies they produce fewer products.

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How Does Tariffs Affect The Economy?

A tariff is a duty or tax placed on an imported product by a government, similar to a sales tax. Tariff rates are different for every imported product. The main reasons a government will impose tariffs include the protection of aging domestic industries from competition in other countries, to protect new domestic industries from competition in other countries, and to protect foreign companies or governments from dumping domestic producers and causing them to lose money.

Foreign tariffs can hurt the economy of a country because it raises the cost of domestic producers, causing them to sell fewer products in those foreign markets. The reduction of sales causes the country to loose money, and then jobs have to be cut because producers aren’t making as much product. Like a ripple, the job losses will then affect other businesses. A reduced employment level causes a reduction in consumer product demands. When people do not have jobs, they do not have money to spend, and many different industries can suffer. These tariffs, coupled with other types of market restrictions, can cause a nation’s entire economy to decline.

A tariff will reduce the competition in a producer’s home market, causing prices to rise. Sales will also rise, causing producers to hire more workers and enticing consumer spending. As the supply of that product starts to grow larger than the demand, productivity slows, people are laid off, and consumers stop spending. Ultimately, tariffs cause a decline in the economy.

All signs point to tariffs being harmful to those involved. So why do countries bother to tax goods? Well, the gains received from imposing a tariff is a lot more visible than the losses are. There is no face to go with a slow economy, but the link between works and tariffs in a specific industry is noticeable and will create attention.

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4 Tips to Start a Relationship With Your Banker to Obtain a Small Business Loan

ContentOwning a small business can be a dream come true for many people, but it can also be a financial burden. Obtaining a small business loan can be a stressful process, but can also be an important source of funding to propel your business to success.

All small business owners should form a relationship with their banker and their banking institution. This can help a business owner obtain a loan, and also provides the perfect setting for an experienced banker to provide the small business owner with practical advice on financial matters.

With a few easy to follow tips, a smile, and a positive attitude, you will be well on your way to establishing a good relationship with your banker.

1. Open a new bank account.
Choose a bank that deals with other businesses with similar sizes as the one you would like to create. May also want to try and find a bank that has customers with the same type of business you have. This will assure you that this bank will understand your needs and be able to provide you with sound advice.

2. Effectively manage your bank account.
Use your account for a while to build up a positive reputation. Make regular deposits and withdrawals, avoid bouncing checks and overdraws. Make sure to keep your balance well above the minimum.

3. Get to know your banker.
As you visit your bank, get to know your banker. Small talk is great to open a conversation, and then start talking about your business. The more your banker knows about your business, they better he will be able to help you. Keep your banker informed of any missed payments, missed projections, like high sales periods and growth.

4. Borrow a small loan.
Prove to your banker that you are responsible by borrowing a small amount of money, for a short period of time. Pay the loan back quickly to establish good business credit.

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4 Financial New Year’s Resolutions for Small Businesses

ContentAs we reach the end of December, people are looking ahead to the new year; an opportunity to start fresh, set goals, and reach for the stars. Small business owners are no different. If you are looking for some ideas on financial goals for next here, here are some suggestions.

1. Prepare a budget.
Every business owner should have a budget, no matter how small or large the business is. The budget is your plan of action and should reflect money coming in and out, even potential expenses that are not currently being incurred.

2. Better manage cash flow.
Cash flow is the most important financial figure for a business. Not only do you need to pay attention to the money coming into your business, but you also have to keep a watchful eye on the money going out. It doesn’t matter how much money your business is bringing in if you can’t afford to pay the expenses, and your business will fail. Take some time each month to prepare a monthly budget and a Statement of Cash Flow, as it will make it much easier to run your business and maximize your profit.

3. Increase sales revenue.
There are many things that you can to do increase your sales. Create a website to market online customers. You can create them yourself, or hire a web designer to build a website for you. Broaden your customer base by accepting credit cards if you do not already do so. Anything that you can do to increase your customer base will increase your profit.

4. Keep great tax records.
Now is the time to invest in a computerized accounting program. As long as you enter your receipts on a daily basis, the computer program will do the rest of the work for you. When you have great tax records, it will be very easy to file your taxes at the end of the year.

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What is Microeconomics?

As we continue to look at various aspects of economics, let’s take some time to review microeconomics. In a nutshell, microeconomics is the study of economics at an individual consumer, group of consumers, or firm level. A more concrete definition of microeconomics is that it is the analysis of a group or individual’s decisions, the factors that affect those particular decisions, and how those decisions will affect others.

Most microeconomic decisions are motivated by cost and benefits to the companies or individuals making the decision. This could be a financial cost or an opportunity cost. When analyzing a microeconomic decision, the macroeconomist will think about how much a consumer will save, how much product a firm should produce, and what competitors are doing. And they even consider questions like “Why do people buy lottery tickets and insurance?” Again, notice that these scenarios deal with the habits of individuals or small groups of people.

Some examples of microeconomic questions and examples of potential microeconomical studies are: How the change of a price of a product will influence a family’s purchasing decisions? If a person’s wages rise will they be more inclined to work longer hours?

To provide readers with a reference, in contrast to microeconomics, macroeconomics deal with questions on a very large scope. An example of a macroeconomic questions would be: How does a change in the interest rate influence savings on a national level?

Then, to dig a little deeper, there are short run and long run microeconomics. These terns do not indicate a period of time, but it is the flexibility a decision makers has. The short run period is when the quantity of at least one input is fixed and the quantities of the other inputs can be varied. A long run is the period in which the quantities of all inputs can be varied. The short run and long run is different from one industry to another.

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Comparing Pet Insurance

Pet of the Week: Copper, 6398084
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When buying health insurance you like to shop around for the best deals. So why not do the same for your pet insurance? Comparing pet insurance online can really help you save a lot of money on your pet insurance.

Like health insurance, pet insurance can offer different policies that are completely different in price. Many companies do offer online quotes, which will make comparing pet insurance policies a lot easier on you. It’s important to make sure you read the policies carefully. Taking a look at three or four will give you a great idea to see how much pet insurance is going to cost you.

Make sure the policy you’ve chosen will cover any medical attention your pet may need.
Most insurers will give you the option to add certain types of care, such as dental cleaning, to your policy. You will need to think about your dog’s age before choosing a policy. The older your pet, the more you will pay in your pet insurance policy. They could also lower the cover of your pet.

Also keep in mind any medical care that could be needed for your pet. If you recently adopted a pet, make sure the pet insurance policy will cover either spaying or neutering.

Lastly, make sure the insurance company is licensed to sell pet insurance in your state. Each company will have all that information on their website. It’s also good to just make sure their credentials are good. If you have any doubts or concerns, it might be best to move to a different pet insurance company.

There is quite a bit of difference between many pet insurance quotes available online. In fact, the cost of your insurance plan can vary greatly, depending on your personal situation. What would make the price change is your pet’s age, its medical history and if your pet is an indoor or outdoor pet.

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You Don’t Have To Settle For Plain Business Cards

Business card case enclosure
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You know that your business card is a representation of both you and your company. It needs to present you in a positive light. It should also visually provide a look at your profession. There are many different ways to create just the right look for your business cards, and you may not even be aware of some of those options that can give you the perfect card.

Most business cards are 2” x 3.5” in dimensions. Most are horizontal, but can also be presented vertically for a little different look. Because this is the most common size it is usually the most inexpensive to produce and print.

However, because of the advancement of new printing techniques, you can explore other sizes and even different shapes. You can do something as simple as rounded corners on a regular sized card, to any number of custom shapes.

Another business card option is the folded card. This option also gives you more space for your information.

While most cards are printed on plain cardstock, there are many other options out there. First, there are different weights of cardstock. Then there are different colors as well as textures that you can explore when designing your cards. However, these should match your business — you probably don’t want a rock ‘n’ roll color if you are wedding planner.

There are also different types of paper coatings you can add including UV- and water-resistant coatings.

For the truly adventurous, there are a number of specialty materials available as well. Wood and plastic are quite popular; however, there are examples of metal business cards out there. Try imagining your card in a plastic material that is frosted or opaque — even clear. Imagine the impact that it will have.

Do a little research and find just the right materials and look for your business cards!

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Business Finance: A Business Check List

When you have a business, it is important to know how well you are doing in that business. Just like your doctor can give you a physical to determine your overall health, your can determine the “health” of your business by knowing these business finance basics.

1. Assets – this is a list of what a business owns that can be converted to cash fairly quickly. Some examples of assets would be inventory or accounts receivable (which is money owed to a business by another party). Assets can be further divided into current assets, which mature in one year or less, and fixed assets. Fixed assets mature in more than one year.

2. Liabilities – this is an obligation to pay another party. An example would be money owed for business equipment.

3. Equity – this is the result of subtracting liabilities from assets, showing the net worth of the business.

The standard Balance Sheet accounting equation is Equity = Assets – Liabilities. This balance sheet is similar to a report card for your business – it will indicate how it’s performing, and where it needs to be improved.

Periodically, business owners need to evaluate the performance and health of their business. A simple check of the balance sheet will be a quick indicator as to how the business is doing.

If the balance sheet shows an undesirable result, there are two steps to take.

1. Reduce your liabilities. This can be as simple as purchasing used office equipment instead of new. Other solutions could be reducing expenditures for other supplies, cutting back on company perks (such as providing a company vehicle for employees) or other measure.

2. Increase your assets. Increasing accounts receivable (as in getting more customers or clients) and purchasing equipment rather than leasing it can be two ways to increase your assets.

By paying attention to your bottom line, you will help ensure the continued success of your business.

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6 Tips to Prepare for a Lay-Off

America’s Health Insurance Plans
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The world of industry is without certainty: the economy can fail, public perception can change, and success can shatter quickly. There are no assurances. There are no promises.

And this is a truth you’ve tried to deny. You believe yourself to be one of the fortunate few: a laborer of rare efficiency and rarer sense. Such attributes are (admittedly) commendable. They’re not, however, guarantees. All businesses are dominated by the need to compensate costs. And this is often accomplished by firing employees; sparing corporations the burdens of wages, insurance and the dreaded vacation days. You can lose your job in an easy moment.

A lay-off therefore should never startle. It should instead be prepared for as a precaution:

  1. Network. Your life isn’t a solitary achievement. It’s instead a collection of acquaintances; each pivotal in helping you achieve your current position. These individuals once offered patience and energy to propel you forward and they can do so again. Seek them out when searching for new opportunities. They can offer access to a variety of companies and careers.
  2. Budget. Should a lay-off occur, you’ll be without income and unable to maintain necessary expenses. It’s important then that you begin preparing now. Tuck away a percentage of your weekly paycheck; spend only what you must; and accumulate at least six months of savings to protect yourself.
  3. Update Resume. You’ve given many years to your employer. You may soon need to, however, offer that time to someone else. A resume is therefore vital; and it shouldn’t be the one you’ve stuffed into your desk, smeared now to dust and disuse. It must instead be updated. List your recent achievements. Use strong descriptions and concrete statistics. And provide solid references (using the network of friends you’ve already created).
  4. Consider Freelancing. Despite your best efforts, you may not find work right away. While applying for other job opportunities, look for alternatives. Online businesses can help: they can offer relief (with a smaller surge of income) and also let you experiment with assignments, allowing you to learn what you now wish to do.
  5. Utilize Insurance. A lay-off means more than losing your job. It instead means losing your health coverage. You must then take advantage of your benefits: schedule visits to your doctor, dentist and pharmacist as soon as possible.
  6. Remember the Availability of  Emergency Cash. Planning for a catastrophe is admirable. Understanding that those plans can fail, however, is necessary. Clever budgeting won’t always be enough to sustain you. Accidents happen. Chaos is common. When finances are tight and you’re in need of cash fast, an emergency loan can help get you through short term. Look into different retailers locally and online that offer cash loans and decide which offers the most manageable interest rates and payment scheduling; and tailor those amounts to your life. These can secure the money you need (precisely when you need it).

Thinking about being laid off is never easy, but it’s a possibility. The future doesn’t have to be frightening. By preparing now, you’ll be better off if lay-offs come later.

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Tips on Managing Business Expenses

CHENGDU, CHINA - JANUARY 12: Job seekers line...
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Owning your own business can be difficult because of the free market system.  In addition to the difficulty in gaining capital, competing with establish megacorporations is highly challenging.  However, if you take the right steps, you can gain the funds needed to compete.  Vacation rentals are great for travel expenses. Saving your company money by renting a vacation rental, is a great way to keep your employees happy and track expenses. You have to watch your expenses closely and ensure that all employees who have access to company checkbooks know what is appropriate and what is not. It is easy for one hindsight on an employee’s part to cause you a large chunk of pocket change. There are lots of ways you can ensure big mistakes do not happen, though.

One such way to ensure your company’s money does not get used in a poor way is to issue prepaid credit cards instead of company checkbooks to your employees who need to have access to company money. A prepaid credit card is great because you can preload it with a set amount of money and more easily monitor what your employees buy because transactions will be electronic. Your employees will know they cannot get away with certain expenditures that might have been easily overlooked when they were using a company checkbook. You can even go as far as only putting money on the card when you know there is an expense that your employee will need to pay for. With the Internet, it is easy to add and subtract money from prepaid cards on a whim. The Internet also makes it fast and easy to track transactions.

Depending on what kind of business you own, there may be a need for software other than Quickbooks to track your company expenses. There are lots of different expense-tracking programs available on the market.  By following these steps to running a tighter budget, you can survive a little better in the free trade world.  Even if it’s not ideal, it’s better than floundering.

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