starting a business

[matt fraser]

Great to have so much free flowing advice! Breamnut - listen to it! It's not easy starting a new business!

Apart from all the business advice, I'd recommend talking to as many other guides for their advice. Perhaps not local ones that you may be competing against, but other guys around the traps. There are many pitfalls which you may not have considered. Do your research and dont rush into anything.

Matt

[Simmo2]

I have a mate up here that owns a charter business.
He wants to sell, but will never recoup the outlay.
He started out his charter business coz he was a keen fisherman, would fish every day if he could.....
Well he did...and 4 years down the track....battling different conditions (people, weather, laws etc ) he is busting to get out of the 'game'.
I would imagine, that my mate could have earnt the same money pumping petrol at McDonalds (sic) 9 to 5 40 a week ....than the hours he put in with two boats running punters out to find fish.....

[tigermullet]

For those expressing a wish to start charter businesses (or other businesses for that matter) the fact that the Royal Bank of Scotland issued yesterday a warning of imminent decline in equity markets around the world might be relevant.

Almost at the same time there was another warning that the Hindenberg omen has popped up again. Briefly, the Hindenberg omen is a chart pattern generally used for stocks listed on the New York Stock Exchange but can serve as a warning for other markets.

Taken together both of these predictions point to tough times ahead for the United Sates, Europe and emerging markets. Australia is not as insulated as many of us would like to think.

The predictions from both, indicate a recession to occur within 120 days but, more ominously, the date of June 20th has been selected by some as the commencement of market turmoil.

I had been clinging to previous time tables which gave until October to get clear.

However, the worst of the message comes from the Royal Bank of Scotland which says that this is now all about financial survival and keeping your job.

Until a couple of days ago the chances of oil rising to $148.30 per barrel or declining to $122 were about equal but we have pushed through the $135 barrier so it seems that higher prices for fuel are about to impact. At $148 the charts will have to re-examined because from there it will be on to to $170 - $180 range or a decline back to the support level of $122 and possibly $100.

Further disturbing news reveals that another wave of mortgage distress is about to hit what was thought of as 'prime' in the United States. Banks are still not showing much willingness to lend to each other for more than one month (mainly European and United State banks) and, even here in Australia, some companies are approaching Hedge funds for credit because it cannot be obtained from normal sources.

Sorry to be so gloomy but it might be a good idea to hold off on plans until October when a clearer picture should emerge. Having lived through a few credit crunches I have seen what damage they can do.

I apologize for being a bit 'off thread' but in a down turn the first thing that goes is the luxury end of the market and fishing charters are probably in that category.

Apart from serious fishers and boaties, hiring a fishing charter will probably be the last thing on peoples minds as they battle for survival.

Please do not take this as financial or business advice. I am not qualified to give that. I'm just a keen observer of economic and financial matters. And I do hope that all of it is wrong and we continue to be the lucky country.

[Getout]

Good advice Tigermullet.
Be careful that you don't turn your hobby into work. When that happens, the thing you most love doing can become a chore, especially if you add the pressure of meeting payments, making a living.
I have watched many lifestyle businesses fail because the lifestyle just didn't pay enough to make the business viable

[manchild]

To find out why global crude prices are at historic highs, look no further than Christina Lu and her silver Honda Odyssey. A beneficiary of China's artificially cheap gasoline, she drives as though the world's energy resources are limitless.
"The current price of gasoline has no influence on my use of the car," said the 40-year-old, who works for a foreign company in Beijing.
"The price could even go a bit higher as far as I'm concerned. It would limit the use of cars — there are just too many of them on the streets."
China and other emerging economies have recently accounted for the entire growth in global oil demand as more mature economies have cut consumption.
This is partly expected, since China is in the middle of what looks set to be its sixth year of double-digit economic growth.
But price caps on gasoline and other oil products also play a huge part, insulating China's consumers from the real price of energy.
The nation's oil majors, Sinopec and Petrochina, suffer under price caps as they cannot pass the costs on to their customers. In turn, they get subsidies from the government to cover most of their losses.
Observers see it as a classic example of how government interference covers up the actual state of the market, leaving people with little direct sense of the value of the goods they consume.
"The money is paid from the tax revenue, so people actually wind up paying the same price," said Li Youcheng, an analyst with Hong Yuan Securities.
This is not just China's business. Since it is a power with growing global clout, economic developments such as this have repercussions far beyond its borders.
"A reform in the energy pricing system will not only benefit China itself, but the whole world," the China International Capital Corporation, or CICC, an investment bank, said in a research note.
"The international crude oil price largely depends on China's energy pricing policy, because China accounts for around 40 percent of the increment of global oil consumption."
CICC cited a detailed simulation which showed what would happen if China raises its oil product prices by 50 percent around mid-2008 to put the domestic refining gross profit margin in line with international levels.
Under this scenario, international oil prices would decline to $116 per barrel by the end of 2008, and $95 one year later.
By contrast, if China continues to control domestic oil product prices, international crude oil price will hit 200 dollars per barrel, the CICC's simulation shows.
According to Lin Yixiang, general manager of TX Investment Consulting, the Chinese system has brought about a litany of social ills.
"The measures have led to waste of energy, chaos in the market, queues of consumers, corruption of those in power and losses of producers. Moreover, it has exacerbated the supply shortage and inflation," he said.
"Curbs on energy prices are policies favourable for the rich classes, putting the unprivileged at a disadvantage and endangering social harmony," he said.
However, the government may be reluctant to change, as a rise in the cap on fuel prices could boost inflation, potentially a source of immense public dissatisfaction.
China's consumer price index rose by 7.7 percent last month, easing only slightly from April's 8.5 percent and still hovering near 12-year highs.
"The caps on oil product prices are vital now, because the government is seeking to rein in inflationary expectations," said Hong Yuan Securities' Li.
"The price caps must be removed, but given the concerns about stabilising the economy, it's not workable now."
The question is how much longer the government can afford to subsidise energy use.
As late as 2007, the value of China's direct and indirect subsidies was a manageable 0.9 percent of gross domestic product, lower than the three percent seen in many other economies.
However, if crude oil prices hit $211 per barrel at the end of 2009, the ratio will reach 6.3 percent of gross domestic product, according to the CICC.
This is more than the state can afford, since it is higher than the sum of state-owned enterprise profits and fiscal surplus combined, it said.
"The subsidies are not sustainable in the long term," the CICC said in its research note.
Sorry to be offtopic a little ,but this will make or break many businesses.
George

[tigermullet]

It certainly will make or break businesses. From a consumer viewpoint it would also get worse than not being able to drive boats around. Finding sufficient supplies on the supermarket shelf would also be difficult.

Perhaps the Chinese will rein in their economy and subsidies after the Olympic Games?

I hope so - having a limit put on boating because of high fuel price is bad but going hungry is worse and might even push us to doing some gardening. Yuk.

[BrewGuru]

I read an article about tax and boats a few years back. Basically the conclusion was that the ATO assumes that anyone trying to claim boat related business expenses is having a lend of them. They have very strict rules & evidence requirements. The article advised get detailed advice from a tax expert as the ATO has seen it all before when it comes to blokes buying boats for, er, business purposes.

That's not a reason not to have a go though, good luck with it.

Their was a Tax case only 2-3 years ago where a guy was claiming his boat as a tax deduction, the tax office knocked it back, he took it to the high court and was granted the tax break, the judge saw that owning a boat to entertain clients was no different to having a corporate box at the footy, races or cricket, he won his appeal

[tigermullet]

Manchild, your timing in posting the article about Chinese subsidies for fuel was perfect.

Contrary to all current thinking the Chinese Government increased the cost of fuel for its citizens by 18% overnight. Yippee! It's not known yet how much it will reduce demand but it will help. The oil price per barrel is falling.

This move has taken everyone by surprise - it wasn't expected that such a move would occur prior to the Olympic Games.

Gold moved up $7 almost immediately and the buying is thought to have come from China because the increased cost for fuel will by inflationary for them.

Fingers crossed. Filling up the boat might get a little less expensive.

[Mtx]

ok back on topic maybe?

A proper business plan is essential.

There is the old chestnut to consider.

IF YOU FAIL TO PLAN THEN YOU PLAN TO FAIL.