When deciding upon an appropriate location for your business, you must consider the following:

• Health and environmental requirements must be satisfied
• Basic infrastructure and amenities e.g. water, electricity, roads, etc. should be in place
• The location should be adequately secured
• Storage space will be required
• Adequate workspace will be necessary to function efficiently
• The location should be easily accessible to customers.

Home-based business: Most entrepreneurs start with their home as the primary business location. Some of the pros and cons of doing so are as follows:

Advantages:

• You will not have to pay rent
• You will spend less time commuting
• You will be closer to your children and family

Disadvantages:

• Domestic interruptions from children, spouse and other family members
• Work and personal life may become too intertwined
• If your business is expanding you may not have enough space at home

Even though you may decide to operate from your home, it is still advisable to register your business.

The type of tools, equipment and other resources needed for the new enterprise depends on the nature of the enterprise. You should put measures in place to avoid shortages of resources that may result in setbacks that can negatively affect your sales and customer loyalty. Therefore, you should keep an inventory and have a stock management plan for your business. It is also important for you to have an alternative plan in the event that you are unable to acquire material from your regular source(s) or have a back-up plan for machinery malfunction.

For example, if you use clear plastic bags to package your product, you must ensure that you always have these bags in stock. It is wise to have business relationships with more than one supplier so that in the event that you are unable to source inputs from your regular supplier, you would have an alternative.

If you are in the baking business it would be wise to have a second oven so that if one malfunctions, you will still be able to continue your business operations for some time. Always remember that if you encounter problems that result in non-completion of jobs, you may have dissatisfied customers, which may result in loss of customer loyalty and future sales.

If you are having difficulties with delivery, you should inform your customers in a timely manner and possibly refer the client to another service provider who you believe can do the job. This way you could maintain your customer base and respect.

It is unacceptable to simply say to your customer that you cannot do the job. Additionally, it is your responsibility to ensure that the service providers you refer persons to or other persons with whom you work also provide a high quality service to your customers in order to keep them satisfied

When operating your own business, especially in the service industry, you must be sure to collect your funds when due as non-receipt of funds could affect your ability to cover your operating expenses. You must be able to prepare proper estimates for all your jobs. In your estimates (proforma invoices), you should include the total cost of providing the service i.e. all materials and labour including any individual(s) hired. You should request a down-payment before you begin the job and ensure that the customer signs to pay you upon completion of the job. Exercise caution when providing services for credit.

Additionally, you must prepare receipts for your customers. This will also enable you to keep better records.

If you work in the service industry, do not take on more work than you can handle. This may result in a number of unfinished jobs and lead to customer dissatisfaction, loss of customer loyalty and therefore loss of revenue. You must properly schedule jobs so that you would have an idea about how much work you can take on. If you recognize that you have an increase in business that you are unable to manage on your own, you should consider hiring more staff.

As an entrepreneur, you will be exposed to a number of risks and challenges. A true entrepreneur however, is tenacious – able to withstand obstacles and hold firm even in the face of adversity! Some of these risks and challenges include the following:

• You may experience emergencies or unexpected events such as becoming ill, getting in an accident or natural disasters affecting your business.
• Competition from other small and more established businesses. For example you may set up a catering service in your area and when doing well someone else may set up a competing business and attract some of your clients.
• Your actual revenue is less than anticipated, rendering you unable to meet some of your expenses.
• One mistake made that can affect future operations, especially if you are in the service industry. An example of such can be prepared food that was found to be tainted. You should have measures in place to deal with these challenges as they arise.

You can do the following:

• Plan well – Budget
• Establish an emergency fund
• Constantly enhance your products or service in order to maintain your reputation and your customer base
• Keep abreast of market trends and changes so that you will always have a current product or service
• Manage your time well
• Have patience and give your business time to grow
• Provide a ‘top of the line’ service to whomever you are serving
• Be positive at all times even when everything may seem difficult
• Make every effort to maintain a high level of efficiency
• Think about the things that can go wrong and try to develop back-up plans.

WOODEE’S FURNITURE STORE

Woodee’s is a specialty furniture store located at Quash Trace, Sangre Grande. It is owned by Mr. Lawrence Woods and Mr. Thomas Dee and is registered as a partnership. Woodee’s sells handmade furniture that is tailored to meet clients’ requests. Customized to the desires of its client base, Woodee’s range of products include dining sets, work tables, wardrobes, space savers, cupboards, doors, counter tops, computer desks, cabinets and more. Giving persons the opportunity to obtain any of these pieces made especially to his/her liking, will make the service offered by Woodee’s sought-after by persons who crave exquisite and unique furniture pieces to decorate their homes or offices.

Our customer base includes home owners, business persons, and persons renting apartments. Competition from other joiners is limited as there are relatively few in Trinidad. Our major competitors however are the large furniture stores like Courts, Standards, Singer and American Stores. They all have business outlets in Sangre Grande in close proximity to high customer traffic areas. Woodee’s however, attracts customers because of the options we give them in terms of personalized furniture. Our customer base will be maintained because of the high quality product and service we provide at competitive prices as compared to the prices charged for the mass produced items at the large furniture stores.

Woodee’s assets include cutting tools, staplers and other manufacturing equipment. Our overhead costs include rent and utilities. Our variable cost include raw material such as treated wood, polish, handles, screws, and staples. Sources of finance include personal funds pooled together by the partners with the difference needed obtained from a NEDCO loan. The loan finance would be used to purchase operating equipment and initial stock

DZIGN CLOTHING CONCEPTS (DCC)

Dzign Clothing Concepts (DCC) is a personalized tailoring service available to persons who experience difficulty obtaining that perfect fit from ready-made clothing. DCC has recognized that it is really impossible for ready-made clothes to fit the wide range of body shapes and sizes of different individuals.

Therefore many persons while shopping have the hassle of finding the right sizes for pants, sleeves, waistlines, busts, etc.! Many times compromises are made when purchasing ready-made outfits. With DCC however, persons can have all aspects of their clothing suited specifically for their bodies!

The business provides specially designed clothing by the two partners who also manage the business. The industry within which DCC operates is relatively large as there are a number of tailors and seamstresses. It has been identified though that the high demand for personalized tailoring services, outweighs the supply of these services. Therefore, there is tremendous opportunity for business growth.

SANDIRA’S PRESERVATIVES

Sandira’s Preservatives provides preserved fruit for eight grocery outlets and six local mini-marts. The stocked preservatives include sweet mango, pepper mango, sweet plum, and pepper plum. Moderate demand exists for these products, with an estimated five hundred packs of preserved fruits demanded monthly by larger clients (groceries) and one hundred packs by smaller clients (mini-marts). Overall, an estimated four thousand, six hundred packs of preserves will be demanded monthly.

To meet this demand, a bulk-production and packaging method will be employed since the fruits utilized are seasonal. The preservation process will be organized in three batches, commencing in the respective months of the fruits’ bearing seasons, which last approximately three months each. Based on the estimated monthly demand, fifty-five thousand, two hundred packs of preservatives will be required annually. During the respective seasons for both fruits, nine thousand two hundred packs of preservatives will be produced each month. Fruits will be packaged and distributed on a first-in, first-out basis to avoid spoilage and wastage, as the preservatives have a shelf life of approximately eight months.

The production process begins with acquiring the fruits, which will be thoroughly washed and examined for imperfections. The mango will be cut using cutting machinery or a machete. After cutting, the fruit is washed again and placed in barrels, where a mixture of water, sodium benzoate, saccharine (an artificial sweetener), salt, peppers, and coloring is added. The barrels will be covered with airtight lids and checked periodically to ensure that the fruit does not become too soggy. The actual preserving process time fluctuates between one and four months. Once preserved, the fruit will be placed on large tables for drying. After drying, it will be packaged in bags and sealed.

Raw materials required for production include the relevant fruits (mango and plum), seasonings, preservatives, coloring, sweeteners, plastic bags, sealers, and cutting machinery. The labels for the packages will be outsourced from a design company.

MARKETING STRATEGY – THE KOMPUTER WIZ

The Komputer Wiz provides maintenance and service repairs to personal computers, laptops, printers and scanners for personal (as opposed to commercial) use. There are many businesses which provide computer services however the services of Komputer Wiz will be like no other!
Our target market has been identified as:

• Students
• Young adults
• Professionals

The Komputer Wiz, once contacted will solve customers’ computer problems in a speedy manner. We offer special packages to customers which will come at minimal cost to us, yet assist in maintaining customer loyalty. We also plan to provide courtesy calls on customers to ensure that they are satisfied and that their machines are in good working condition. This will also allow us to create sales potential as customers may have minor problems or issues that they wanted addressed but did not get the time to call!

We will also provide a shopping service to consumers for computer parts, computer accessories and software upgrades. This additional service will enhance customer loyalty and contribute to widening our customer base.

We will advertise using classified ads, attractive flyers placed in strategic locations, signage on vehicles and distribution of call cards. Additionally, we believe that word-of-mouth will assist in promoting sales since we anticipate satisfied customers communicating to their peers about our effective and reliable service. We will price our services competitively to attract and maintain customers. Additionally, house visits is another benefit for customers.

You can do the following:

• Efficient service attributable to our experience and knowledge about computers
• Access to new software, accessories and information relevant to persons interested in staying on in the cutting edge of developments in information technology
• The fast, high quality service we provide.

Our weaknesses include:

• Location

“Proper Preparation Prevents Poor Performance!”

Planning helps you to think things through thoroughly. It can be time consuming, but it can help you avoid mistakes that may be disastrous.

The core elements of a business plan should include:

• Executive summary
• Business description
• Management and Operations plan
• Development and Production plan (for businesses in the manufacturing industry)
• Marketing strategy
• Financial plan

It is very important that your business plan be well thought out, straight forward and easy to understand. Your business plan should be reviewed periodically and updated if circumstances, opportunities or business operations change.

TIP: If you experience difficulty in writing your business plan, seek assistance from a reputable source such as National Entrepreneurship Development Company (NEDCO).

The executive summary explains the basic elements of your proposed business. These include:

• Name, location and contact information of your business
• The owners
• A brief description of your product or service
• Your target customers
• How much financing is needed
• How this financing will be used to make your business profitable
• How you plan to attract and maintain customers.

Your executive summary should entice readers and stimulate interest in your business. It is advisable to write the executive summary after you have completed the other elements of your business plan. Then, you will be equipped with all the necessary information from which you can extract highlights to include in your executive summary. The completed executive summary, however, should be the first item in your actual business plan document.

A business description details the characteristics of the industry in which you wish to operate. For example, you will need to describe whether the business is in:

• Trading such as wholesale or retail, for e.g. suitcase trading
• Manufacturing such as making preservatives e.g. sweet mango, pepper plum
• Service-oriented e.g. catering, landscaping, hairdressing, etc.

Additionally, you should state whether the type of business is a sole proprietorship, partnership or is in some other arrangement.

The sole proprietorship is defined as a business that is owned and operated by one person who has full control of the business and who is personally liable for all its debts. This form of business is very popular for self-employed persons. Examples include:

• Taxi-drivers
• Shopkeepers
• Vendors

A partnership is a legally binding business relationship between two or more individuals (not more than twenty). The partners are liable for all the debts related to the business and no one partner has complete control of the business. Examples of a partnership may include:

• Restaurant owners
• Land developers
• Small contractors (construction) etc.

A Limited Liability Company (LLC) is another form of business company. It differs from the two types above because it offers limited liability to its members. Limited liability refers to a situation where each owner/ member of a company is not personally liable for all the debts of the company. Each member is only liable up to the amount contributed.

LLCs are formed by a group of entrepreneurs who see benefits of collaborating with similar or related industries. For example a group of farmers in a particular area may form an LLC and all contribute to the purchase of a vehicle which they can all use to transport goods, as opposed to each farmer acquiring their own vehicles. This alternative can result in financial savings for the farmers as well as circumventing the problem of having underutilized vehicles.

TIP: Whatever the form of business operation, it is advisable that you register your business with the Registrar of Companies to ensure that the name selected is unique and not being used by another company. Additionally, registering your business can be beneficial in several ways. Some of these include the ability to:

• Access loans from reputable lending agencies so that you can expand your business or acquire assets
• Pay National Insurance and so qualify for the relevant benefits and;
• Access training programmes offered by institutions (in Trinidad and Tobago) specialized in assisting SMEs

How to register your business name?


You will need to complete and file the Registration of a Business Name form. This form is to be submitted to the Companies Registry with the applicable fees. For a Limited Liability Company (LLC), once you have a name reserved you will have to file Articles of Incorporation.

To register your business name, you can obtain forms from the Ministry of The Attorney General and Legal Affairs via its website http://www.legalaffairs.gov.tt or from its office located at:

Government Plaza
Corner of London & Richmond Street
Port-of-Spain
Tel. (868) 624-1660

Protecting your product or idea


Trademarks, Patents and Copyrights

A trademark or service mark is a word, name, symbol, device or combination thereof, adopted and used by a manufacturer, service provider or merchant to identify goods and services in order to distinguish them from others. A patent gives legal recognition of a new product or work of art. For assistance with patents and trademarks you can contact the Intellectual Property Office at the Ministry of The Attorney General and Legal Affairs.

Managing your business
You will need to think about who is going to manage your enterprise. It may be you or someone you hire to work on your behalf. If hiring, it should be someone you trust and who has the required skills to do a good job. The person responsible for management should provide leadership from the very beginning as many decisions need to be made at the start-up stage.

Decisions may include:

• Identifying a suitable business location and deciding on a marketing plan
• Finding initial funds (capital)
• Managing the purchases required to start the enterprise
• Hiring additional staff

These are managerial decisions that will dictate the future growth of the business. The management plan should include details about the ownership structure, management and human resource needs.

The operations plan specifies where you will locate your business (along with the physical requirements) and how you will service your clients. If you are into manufacturing, your operational plan should provide details on the manufacturing process. If in the service industry, you should explain how you plan to serve your customers. Any implementation of measures to maintain certain standards where your product or service is concerned should be included in the plan.

Hint: You should find out about the regulations that govern or monitor the type of business you are getting into! For example, if you are getting into catering, there are certain standards around food preparation, packaging, distribution etc. that you would need to adhere to. If you depend on suppliers for certain inputs into your business, your operations plan should describe the arrangements you have with your suppliers in terms of re-orders (frequency and quantity) and costs. Alternatives or back-up suppliers should also be included.

If you are in the manufacturing industry, you would find it helpful to outline a development and production plan. Maintaining your output level to satisfy your customers’ demands is an essential skill.

The following questions therefore need to be answered:

• What quantity and how frequently should my goods be produced? (This would depend on sales turnover)
• What raw material is used in production?
• Is the raw material available?
• Do I need anyone to assist in the production?
• If special skills are needed, how can they be acquired and retained?
• What are the total production costs?

Production Costs

• All items directly and indirectly related to the manufacturing process must be considered in the estimate of the unit cost of the product. In order to estimate the cost of production you would need to do the following:
• Identify all the inputs needed to produce and sell.
• Calculate the cost of the production of a specific quantity that you can manage.
• Identify production inputs under the following headings:
• Fixed cost: Costs that will be incurred regardless of the level of production e.g. if you rent space for a hairdressing salon, the rent will need to be paid regardless of the amount of business you receive from your customers.
• Variable Costs: Costs that are directly related to the level of production. The more goods produced, the more variable costs will be incurred and vice versa. For example, if you manufacture furniture, the cost of fabric to upholster the furniture will vary since the amount of fabric to be purchased will depend on the quantity of furniture to be produced.

N.B. Total production cost is the sum of all fixed costs plus all variable costs.

Your business venture needs effective marketing regardless of the product or service you provide. In developing your marketing strategy you must identify the customer you are targeting and how you plan to reach them. To achieve this you should include the following issues in your marketing plan:

• Pricing
• Distribution
• Product differentiation
• Advertising and
• Promotion strategies.

Pricing: The price of your product or service will directly impact the success of your business. If you want to stay in business, you must at least breakeven i.e. your income must cover your expenses. It is however advisable to compete on quality rather than reduce your prices in order to attract more customers. You must be able to compare your prices with those of your competitors and determine the reasons or their prices being higher or lower than yours. You should never sacrifice quality for quantity and never compromise the quality of your product to save on costs – this will inevitably lead to loss of customer loyalty and future business.

Distribution: Distribution is the process of getting your product or service to your customers. The direct sales method involves selling your product directly to the customer. For example, making pies and selling them yourself. Wholesale distribution usually involves the sale of your product to another party who would subsequently re-sell to customers or use it in the production of his or her own business. Examples of this include the making of preservatives to sell to grocery owners who in turn sell to customers and farmers who sell their vegetables to restaurant owners who will use the food stuff in the meals they prepare for sale to customers.

Promotion Plan

Your promotion strategy is the way you plan to entice potential customers to purchase your product or service. Some common ways to advertise include distributing fliers, putting up signs and posters, word of- mouth, newspaper advertisements and call cards. Social media avenues such as Instagram, facebook and twitter can also be used to promote your products and/or services.

Packaging is another important aspect of promotion especially for food items such as preservatives, juices, etc.
Sales promotion involve strategies specifically aimed at giving you a boost in sales by offering special prices or discounts to customers, or using competitions, etc. You must, however, be sure that the sales promotion will not cause your income to be lower than your expenses.

Product Differentiation

Product differentiation refers to your ability to use your creativity to make your product or service as unique as possible to distinguish it from the others in the market. If you are in the service industry, your personal appearance, your package deals and the quality of your service can set you apart from the others in your industry. On the other hand, if you manufacture goods, the type of packaging as well as distribution channels will be critical to your success.

The financial plan is another important feature of the business plan. You should be able to describe what your inflows and outflows of cash will be (cash flow statements) profit and loss statements and balance sheets.

Sources of Financing (Where do I get the money?)

A main reason for the failure of small businesses is insufficient capital (money).
To avoid this dilemma you should review your situation by answering:

• How much money do I have?
• How much money will I need to start my business?
• How much money will I need to stay in business?
• If I need additional financing, where can I get it?

When venturing into a small or micro enterprise, you must understand that you will incur start-up costs for your business. If you do not have the initial funds for start-up, you may need to approach a financial institution such as a commercial bank, credit union, special credit-providing institution of the state, etc. that may assist you in securing funding for your business. It is important to have an effective business plan in order to access financing from these institutions.

A debit card enables the holder to have his purchases directly charged to funds on his account at a deposit-taking institution and can also facilitate the withdrawal of cash from ATM machines.

These cards may be internationally or locally branded (for example, LINX). Debit cards can be used to pay for everyday items such as groceries, meals, shopping, etc. With the debit card, you are accessing your own funds as opposed to a credit card which accesses funds loaned by an issuing institution.

When you use your debit card, the value (cost) of the transaction is taken directly from your account held at your financial institution. You can use a debit card to get cash from ATMs or to pay for goods and services at point-of-sale terminals at participating merchants and service providers. When you use your debit card to pay for goods and/or services from merchants and service providers, this is called a point of sale (POS) transaction. For this POS transaction, all you need to do is present your card to the merchant who will swipe it through the electronic terminal and enter the amount of your purchase. You are then required to confirm the value of the transaction and enter your PIN (Personal Identification Number). This process creates a debit transaction for the value of your purchase which will be automatically deducted from your account.

For your safety and protection, each financial institution sets a predetermined limit to values of both POS and ATM withdrawals. Upon collection of your card, your financial institution will advise you about these limits, the period for which they apply and about the process for renewal of your card.

Some financial institutions charge a fee for using ATM machines at any of their outlets, whether at a branch or facility (e.g. gas station). However, all financial institutions charge a fee if you use your debit card at an outlet belonging to another institution (for example, an RBTT customer using a First Citizens Bank ATM machine).

If you have a TT-dollar, international debit card issued by a local bank, you can pay for purchases or withdraw cash from an ATM in a foreign country. The TT-dollar equivalent of the foreign currency amount will be withdrawn from your bank account. There is usually a higher charge for using your debit card to withdraw cash. This charge varies with each financial institution. 

A debit card is a means by which purchases are automatically deducted from a cardholder’s account. When you use a debit card, you are withdrawing money from your own account. Payments made using a debit card do not accrue interest charges because the money is deducted from funds which are available in the cardholder’s account.

A credit card is a means of executing payments by drawing on a line of credit with the financial institution that has issued the card. Each financial institution has certain qualifying criteria for issuing credit cards. These include your credit history, income, other debts and the ability to repay. Cardholders are given a period of time to clear their outstanding credit balances. If payment is not made in full by the end of this period, interest is charged on the outstanding balances.

The basic difference is that a debit card accesses the cardholder’s money while a credit card draws on the financial institution’s money.

When you use your debit card to withdraw cash at an ATM, you would receive a transaction receipt which will usually show

• The amount withdrawn.
• The balance in your account after the withdrawal.
• The unused portion of your assigned limit.

The assigned limit is set by your financial institution. It refers to the amount of funds you can withdraw within a given period and is automatically restored on expiry of this time frame. You should note that if the unused portion of your assigned limit is greater than the balance in your account, you will be allowed to withdraw only up to the balance in your account.

The following are some useful tips for using your debit card wisely:

• Do keep your ATM/Debit card in a safe place and never “lend” it to anyone, including friends and family members.
• Do keep your PIN private. Your PIN is your Personal Identification Number. Memorize it and do not give it to anyone, even a bank employee.
• Do conduct ATM transactions when and where you feel safe.
• Do use your hand or body as a shield to prevent others from observing the details of your transaction.
• Do remember to take your card and your transaction record after completing your transaction.
• Do carefully count the cash received and secure it immediately after making a withdrawal.
• Do reconcile your withdrawal slips and LINX receipts against your account statements on a regular basis.
• Do report any discrepancies immediately. Missing and/or unfamiliar transactions could be a sign that your card has been used fraudulently.
• Do keep your receipts in one place for easy retrieval and better oversight of your account.
• Do report lost or stolen cards to your financial institution immediately.
• Do report any fraudulent use of your card immediately to your financial institution.
• Don’t keep your PIN with your card.
• Don’t choose a PIN that others could figure out, such as your phone number or birth date.
• Don’t accept assistance from any unknown individuals at the ATM Machine.
• Don’t ask anyone to conduct your transactions for you.
• Remember your Debit Card can be an extremely useful tool.
• Here are three main advantages of Debit Cards to bear in mind:
  • Using a debit card frees you from the risk inherent in carrying cash.
  • Debit cards may be more readily accepted by merchants than personal cheques.
  • The debit card is a quick, “pay now” product, so that there is no worry about late payments!

USE YOUR CARD WISELY!

There’s no doubt about it – owning a home is an exciting prospect. After all, you’ve always dreamed of having a place that you could truly call your own. But buying a home can be stressful, especially when you’re buying one for the first time. Fortunately, knowing what to expect can make it a lot easier.

According to a general rule of thumb, you can afford a house that costs tow and a half times your annual salary. But determining how much you can afford to spend on a house is not quite so simple. Since most people finance their home purchases, buying a house usually means getting a mortgage. So, the amount you can afford to spend on a house is often tied to figuring out how large a mortgage you can afford. To figure this out, you’ll need to take into account your gross monthly income and any long-term debt.

Once you have an idea of how much of a mortgage you can afford, you’ll want to shop around and compare the mortgage rates and terms that various lenders offer. When you find the right lender, find out how you can pre-qualify or get pre-approval for a loan. Pre-qualifying gives you the lender’s estimate of how much you can borrow. Prequalification does not guarantee that the lender will grant you a loan, but it can give you a rough idea of where you stand. If you’re really serious about buying, however, you’ll probably want to get pre-approved for a loan. Pre-approval is when the lender, after verifying your income and other searches, lets you know exactly how much you can borrow. This involves completing an application, revealing your financial information, and in some instances paying a fee. It’s important to note that the mortgage you qualify for or are approved for is not always what you can actually afford. Before signing any loan paperwork, take an honest look at your lifestyle, standard of living, and spending habits to make sure that your mortgage payment won’t be beyond your means.

A knowledgeable real estate agent or buyer’s broker can guide you through the process of buying a home and make the process much easier. This assistance can be especially helpful to a first-time home buyer. In particular, an agent or broker can:

• Help you determine your housing needs
• Show you properties and neighborhoods in your price range
• Suggest sources and techniques for financing
• Prepare and present an offer to purchase
• Act as an intermediary in negotiations
• Recommend professionals whose services you may need (e.g. lawyers, mortgage brokers, title professionals, inspectors)
• Provide insight into neighborhoods and market activity
• Disclose positive and negative aspects of properties you’re considering

Keep in mind that if you enlist the services of an agent or broker, in most instances, it will involve a fee.

Before you begin looking at houses, decide in advance the features that you want your home to have. Knowing what you want ahead of time will make the search for your dream home much easier. Here are some things to consider:

• Price of home and potential for appreciation
• Location or neighborhood
• Quality of construction, age, and condition of the property
• Style of home and lot size
• Number of bedrooms and bathrooms
• Property taxes
• Proximity to shopping, schools, and work.

Once you find a house, you’ll want to make an offer. All terms and conditions of the offer, no matter how minute, should be put in writing to avoid future problems. Typically, your attorney or real estate agent will prepare an offer to purchase for you to sign. If the seller accepts the offer to purchase, he or she will sign the contract, which will then become a binding agreement between you and the seller. For this reason, it’s a good idea to have your attorney review any offer to purchase before you sign.

Once the seller has accepted your offer, you, your real estate agent, or the mortgage lender will get busy completing procedures and documents necessary to finalize the purchase. These include finalizing the mortgage loan, appraising the house, surveying the property, and getting homeowners insurance. Typically, you would have made you offer contingent upon the satisfactory completion of a home inspection, so now’s the time to get this done as well.

At the closing, you’ll be required to sign all necessary paperwork to make the transaction legal. In addition, you will need to provide proof that you have insured the property. You’ll also be required to pay certain costs and fees associated with obtaining the mortgage and closing the real estate transaction. The closing can be a tedious process – but when it’s over, the house is yours!

Enjoy it.

Taking a vacation at least once a year is quite important for renewing your strength especially after a busy work schedule.

Equally as important though is the quality time that a vacation affords you to spend with your family, away from the demands and stresses of everyday life.

• Avoid borrowing or incurring debt to finance your vacation.
• Dipping into your emergency funds to pay for your vacation is equally unwise and is generally not a good financial practice. The burden of rebuilding these funds could place unnecessary strain on your finances, especially if an emergency arises.
• Financing your vacation airfare via miles accumulated enables you to travel for a minimal fee (usually only taxes).
• The ideal way to finance your vacation is to budget for it from your disposable income. Determining the amount of disposable income that you save for this event will require you to:
  • Decide on your vacation destination;
  • Estimate the cost of your airfare, hotel, meals, tips and entertainment;
  • Estimate the cost of transport and sightseeing;
  • Cater for exigencies

Working backwards from your intended vacation date would enable you to calculate the amount of money that you need to accumulate on a monthly basis in order to pay for the vacation. In the absence of such a plan, it may be a good idea to save at least 5% per month from your net income.

One way to save on a vacation is to book an All-Inclusive package deal. This type of vacation is excellent for a family with young children as it offers great value for money. It also provides an excellent form of relaxation because of the facilities which are offered at such venues. Most All-Inclusive packages include all meals, various sporting activities and entertainment. They also offer special supervised activities for your children. All-Inclusive resorts offer great value for your money, privacy, security and an escape from the daily routine!

These are ideal for large groups such as extended families. In this type of setting, there is usually a well furnished kitchen with all the amenities including utensils. You will usually though have to purchase groceries and prepare your own meals. This type of accommodation is usually much cheaper than staying in a regular hotel.

Time-share describes the shared ownership by several individuals in a piece of real estate in a given location. These are condominium-style units outfitted with 1-3 bedrooms, bathrooms, kitchen, living room that generally come fully furnished. Time-share involves purchasing property, so all the rules around purchasing property would have to be followed. Alternatively, if you know persons with available Time-shares , you might be able to negotiate use of these for a relatively small fee. You and your family can have a wonderful vacation at a fancy resort for a modest fee.

Develop a financial plan for your annual vacation and enjoy a debt-free holiday with your friends and/or family!

With Christmas and the pre-Carnival and back to school seasons all rolled into the space of a couple of months, the way you manage your financial situation in this last quarter of the year will be crucial in determining your financial success in 2019. While some festivals and celebrations may be far more austere and somber than others they all take some degree of financial literacy to be able to enjoy the greater meanings, benefits and enjoyment of the occasion. 
Financial literacy and restraint beg for greater consideration in a multi-cultural society such as ours where most of us are likely to participate in several of the major holiday events.

The DIC is responsible for the protection of deposits only and does not protect against any investment loss. Investments are speculative by nature and, as such, may, on occasion, result in loss.

Thinking ahead will be the key to success over the next few months. Get your calendar out right now and take note of the holidays you have coming up. Most likely some of them require increased entertainment and grocery budgets, some call for a wardrobe intervention and even gym training, while others call for gift giving and maybe that trip to visit family far away. Whatever it is, try to make an honest and realistic budget for each of the remaining months of the year and start putting aside the required funds.

Do not wait for the eve of a celebration to start scrambling around for the things you need. Last minute scrambles are a sure way to see your money evaporate into thin air. For Christmas for instance, put your gift list together now and, if you can, start buying some of those gifts. It would not only save you money, you will save on the headache and blood pressure pills.

With the price of Carnival costumes increasing every year, it is enough to completely kill a well-wrought budget. Many mas players are now required to place a down payment when booking their costume. This is indeed a good budgetary measure; nevertheless, that final payment seems to sneak up on us. This will be especially true in a short season. Put aside a little something every month in anticipation of this midnight robber. Put your hands on a calendar of the events for Carnival, get a blue marker and choose the ones you would like to go to. Get a red marker. Go over your itinerary and start highlighting the ones you can realistically afford to go to.

In each of the upcoming festivals, preparing meals and entertaining guests will play a fairly big part. Many of us have had the experience where we simply cook too much and we end up wasting food. Take a tip from the British – try to find out and confirm how many people will be coming by, so you can cater more precisely. For festivals that span a number of days, plan your menu ahead of time to avoid heat-of-the-moment cooking sprees.

Remember:
To be prudent when spending over the holidays;
or
To exercise thrift when spending in order to avoid experiencing financial despair 

Established by the Central Bank in 1986, the Deposit Insurance Corporation is responsible for protecting your financial deposits against potential loss, providing coverage of up to $200,000

It should be noted, however, that only deposits made with institutions registered under the Financial Institutions Act are afforded this protection. To date there are twenty four institutions, including commercial banks, finance houses, trust companies and merchant banks, that are registered under the Financial Institutions Act.

These financial institutions are:

Commercial Banks

• Bank of Baroda (Trinidad and Tobago) Limited
• Citibank (Trinidad and Tobago) Limited
• First Caribbean International Bank (Trinidad & Tobago) Limited
• First Citizens Bank Limited
• JMMB Bank (T&T) Limited
• RBC Royal Bank (Trinidad and Tobago) Limited
• Republic Bank Limited
• Scotiabank Trinidad and Tobago Limited
• First Citizens Trustee Services Limited
• Guardian Group Trust Limited
• JMMB Express Finance (T&T) Limited
• RBC Investment Management (Caribbean) Limited
• RBC Merchant Bank (Caribbean) Limited
• RBC Trust (Trinidad and Tobago) Limited
• Scotia Investments Trinidad and Tobago Limited

Finance Houses

• Caribbean Finance Company Limited
• Fidelity Finance and Leasing Company Limited
• Island Finance Trinidad and Tobago Limited
• Massy Finance GFC Ltd
• NCB Global Finance Limited

Trust Companies and Merchant Banks

• ANSA Merchant Bank Limited
• Citicorp Merchant Bank Limited
• Development Finance Limited
• First Citizens Asset Management Limited

The DIC is responsible for the protection of deposits only and does not protect against any investment loss. Investments are speculative by nature and, as such, may, on occasion, result in loss.

• Keep all deposits made to your account updated.
• Ensure that all your deposit and loan documents are kept in a safe place

The Deposit Insurance Fund provides insurance protection to depositors against the potential loss of their deposits held in financial institutions registered under the Financial Institutions Act. Only deposit instruments issued by these institutions are covered (these instruments are outlined below) and not instruments of an investment nature. The Deposit Insurance Fund provides coverage to depositors up to a maximum of $50,000 currently but the 2007-2008 National Budget proposes an increase to $75,000.

Deposits received by a licensed financial institution are insured. These include the following:

Normal Deposits

• Savings Accounts (principal + interest up to a maximum of $50,000)
• Current Accounts (including interest up to a maximum of $50,000)
• Fixed Deposits (including interest up to a maximum of $50,000)
• Interest Payable up to the day before the date of closure of the institution Other Deposits
• Outstanding or uncleared balances for which the financial institution has issued a certificate, receipt, cheque, money order, draft or other such instrument.

The current coverage is up to a maximum of $50,000 for each depositor in respect of deposits held in each financial institution.

Examples of instruments not covered by DIC are:

• Letters of credit;
• Stand-by letters of credit, and similar instruments;
• Inter-bank deposits;
• Deposits from affiliated companies;
• Foreign currency accounts and
• Investment accounts

In December 1986 (the same year in which the DIC was established), upon the application of the Central Bank, the High Court gave orders for closure of four financial institutions. On December 22, 1986, the DIC was required to initiate insurance payments to depositors in these organizations – a deposit insurance liability of $191 million within a period of 90 days. DIC was required to make payments to over 13,000 depositors. During the period 1988 and 1993, additional payments totaling $27.5 million were paid out to depositors of the four financial institutions.

• If you change your address notify your banker immediately to have the records reflect the new address.
• Be aware of the implications involved in using your deposit as a guarantee for someone else’s loan. Ask your banker about your deposit insurance coverage under these arrangements.
• If you use your deposit held in Bank A as collaterall for a loan for a friend or relative in Bank B and Bank A subsequently fails, the following will obtain:Deposit in Bank A will be assigned to Bank B. As such, the payout of deposit insurance will not be made to the depositor in Bank A, but to the institution Bank B.
• Be aware of the extent of coverage within the different types of deposit accounts. Ask your banker about deposit insurance coverage options for Single, Joint and Trust Accounts.

No: If you have all your property in joint ownership with the person you wish to inherit the property after your death, then a will is not necessary. If you have the intended recipient of the asset as the beneficiary of the asset, then a will is not necessary. If however you have assets that are assigned to your estate after death, you need to have a will to ensure your property goes where you want it to or it may go to folks you did not intend it to go to or it may go to the state!

Anyone with property or assets: A will is a good way of keeping track of your assets and how they are to be disposed after your death. If you change your mind about the disposal of any item, that change should be made in your will and on the asset in a beneficiary is listed on the asset. A will is also the fastest and easiest way to bring closure after your death.

You can do it yourself: Once you are clear on what assets you own and how you want them distributed after your death, you can prepare your will yourself in clear precise language then sign it in the presence of two witnesses who can attest to your being of sound mind and who must sign as having witnesses your signing. The witnesses must not be beneficiaries in your will. There are a number of other publicly available stipulations to be followed in the preparation of a will. Once these are followed you will have a valid will. Alternatively, you can have an Attorney prepare your will for you. The cost for this service is usually a percentage of the value of your estate i.e. the property you have to distribute.

Anytime before you die: Since we do not know when death will occur, it is a good idea to prepare a will once you have assets whether assigned (to a beneficiary) or not. Once you start contributing to a pension plan, it is a good time to contemplate the preparation of a will. Otherwise once you start accumulating assets, a will becomes essential.

Everything of value including your organs. Your will could contain all your assets such as:

• Real estate
• Jewelry
• Paintings
• Money in financial institutions
• Time Sharing property
• Stocks & Bonds or options
• Bills of exchange
• Livestock and other farming property
• Interest in any asset, company, prospectus
• Endowment policies
• Assignment of your pet parrot, china and other possessions
• Organs to be donated for research or other use

Your next of kin will have to engage a lawyer to initiate the process of getting letters of administration. This process takes some time (three months and longer). After this is completed that individual can start managing your assets. Even before the letters of administration are processed, those assets that have beneficiaries assigned to them as well as those that were held jointly with someone else will be distributed to the beneficiaries and joint owners will become owners of the shares which previously belonged to the deceased.

If you engage an attorney to prepare your will, the cost is apt to be a per cent of the value of the property you have in the will. If you want to keep your cost down, you can exclude those items that you have already assigned beneficiaries to and you can exclude those accounts and facilities that you have joint with your intended beneficiary.

A will can be a relatively inexpensive tool in your financial tool-kit which keeps you informed of your assets. It is better to have a will as it simplifies the process distributing your assets after your death as it passes your wealth to the next generation whom you hope would add to it for the next generation. If you have several assets that are not included in your will, it is advisable to have a complete list of your assets attached to your will in a safe, dry place.

• Credit Limit:
  Your credit limit is the maximum cash value assigned to the card by the bank. This credit limit can be for cash advances or to make purchases.
• Balance
  The balance on your credit card is the amount of credit that you have used. It is the total of your cash advances, purchases and may include credit card fees. The higher your credit card balance, the less credit you have available to make other transactions.
• Annual Percentage Rate (APR)
  The annual percentage rate (APR) is the interest rate applied to a balance carried beyond the grace period. Cash advances incur additional charges (cash advance fee) beyond the APR on outstanding balances.
• Grace Period
  The grace period is the amount of time granted to pay your balance in full after which charges are applied.
If you carried a balance from a previous month, you may not have a grace period for new purchases.
Cash advances generally do not have a grace period. To find out the length of the grace period, you should refer to the credit card application or your credit card agreement.
• Finance Charge
  The finance charge is the cost of carrying a balance. Finance charges are computed using your balance, the APR and the time the balance is deemed to be outstanding. Some credit cards carry a minimum finance charge. If your calculated finance charge is less than the minimum, you must still pay the minimum charge.
• Incentives and Rewards
  Some financial institutions offer rewards and other incentives for using their credit card. Rewards come in various forms such as cash back; ‘points’ to redeem; travel miles; discounts, etc.
• Credit Card Fees
  Some of the most common fees are: annual fees; finance charges; late fees and over-the-limit fees.

• Every credit card has its unique, confidential and card – holder specific Personal Identification Number (PIN).
• Most credit cards carry the card holder’s name emblazoned on its front and usually, the card holder’s signature at the back.
• Each card has its own number. This comprises:
  • The prefix – which determines the credit card network;
  • The BIN – which is the Bank ID; The Account Number and The Validity Check Code.
• In addition to the main credit card number, credit cards also carry expiration dates (given to the nearest month), as well as extra codes such as issue numbers and security codes. Not all credit cards have the same set of extra codes nor do they carry the same number of digits.

In choosing a credit card, you ought to consider

• Your personal spending habits.
• The purposes for which the card is to be used.
• The pre-approved credit limit that you will be granted.
• The length of the grace period, if any.
• The interest rate applied to unpaid balances and all associated charges.
• All the terms and conditions of using the card.
• The extent of local, regional or international acceptability of the card for which you are applying.
• The incentives and rewards that are related to the card usage.

• Credit cards are convenient and eliminate the need to carry large sums of cash.
• Credit cards provide additional purchasing power. However there is a cost if the sum used is not repaid in full, on or before the due date stipulated.
• Various incentives such as bonus points, discounts, cash back rewards and travel miles are offered with usage of these cards.

• High interest charges can apply if the account is not paid off in full on or before the due date. These interest charges can be as high as 24% per annum. Moreover, if the minimum payment is made, an additional late payment fee may apply.
• Any cash withdrawn from your credit card can incur an upfront charge. This can amount to 2.3% of the sum withdrawn. In addition, interest accrues daily from the date of withdrawal until the amount is repaid in full.

• Credit card debt arises when the outstanding balance is not paid off on or before the due date.
• Credit card issuers offer customers the facility of making minimum payments in order to keep their card/account active. This option is often the cause of many customers getting into insurmountable card debt. When balances are not settled in full by the due date, interest charges accrue. This increases the amount to be repaid and where this is repeated, large outstanding credit card debt can result.

To manage the use of your credit card and avoid falling into credit card debt, the following pointers can serve as your guide:

• Do not apply for, or accept a credit card if you cannot manage the repayments.
• Do not accept or request an increase in your credit limit unless you know you can manage the increase.
• Pay the full outstanding balance on or before the due date. Avoid making only the minimum payments on your credit card.
• Avoid having too many credit cards.
• Shop around for the credit card that best suits your individual needs, ensuring that you compare interest rates, administration fees, acceptability by the merchants you patronize and the interest-free periods for repayment.
• Avoid withdrawing cash through your credit card.

Credit card fraud refers to the unauthorised use of a credit card to make purchases or obtain funds from someone else’s account. How can you protect yourself from becoming a victim of credit card fraud?

• Never disclose your Personal Identification Number (PIN) to anyone.
• Refrain from writing down and/or leaving your PIN in a conspicuous place.
• Keep your card with you at all times and in a safe place.
• When making credit card transactions, always have your credit card in view. You have the right to observe any transaction involving your credit card.
• When you sign a receipt, draw a line through any blank spaces above the total.
• Keep a record of your card account number, expiry date and card issuer contact information in case of loss or theft.
• Report lost or stolen credit cards immediately to minimize the occurrence of unauthorized transactions.
• Reconcile statements promptly.
• Exercise caution if requested to disclose personal information to callers who say they are from your credit card company.

• Credit Card interest rates can be as high as 24 percent per annum. Use your credit card only when necessary and pay off the balance on or before the due date.
• Some card issuers charge a higher interest rate for late payments. Carefully review all penalties which can be incurred in the event of late payments.
• Carefully compare interest charges when shopping for a credit card. A comparatively low interest rate may be just an initial rate that would increase after a period of time.
• Annual fees can range from TT$150.00 to TT$300.00. You will be required to pay the annual fee whether you use the card or not.

Few of us today have cash readily available to purchase a house, a car and appliances, just to name a few. We become borrowers through bank and student loans, finance companies, and credit cards. Many of us, however, let debt get out of hand.

Core reasons for persons falling into debt include:

• Using Credit Cards to meet living expenses
  If you are putting purchases on credit cards just to make ends meet or in other words as extra income, then you could be in serious debt trouble. Credit cards, after all, are a form of debt.
• Poor money management
  A monthly spending plan is essential; it is very easy to spend more money than necessary and to rack up debt by spending impulsively, without one.
• Living beyond your means
  If you are living extravagantly and are not saving, then you are living beyond your financial means, which is a core cause of debt.
• Spending cash “to come” in hand
  If you spend money, in anticipation of receiving a lump sum, instead of it being of assistance, it can be a hindrance and can upset your financial situation.
• Financial illiteracy
  One can find him or herself in debt simply by not being educated about finances. Without fully understanding how money works and grows or the importance of saving and investing for a rainy day, undoubtedly, debt would be incurred.

To identify if you are in debt, start by writing down the value of what you own paralleled against what you owe. If you owe more than you own, you ARE in debt. Furthermore, if you are struggling to “make ends meet” that may be a major sign that debt is “knocking on your door”.

Other signs that you are in debt include:

• Taking loans from financial institutions to repay existing debt(s)
• Requesting extensions and waivers of bill payments
• Being bombarded by telephone calls and letters from creditors
• Having credit applications rejected
• Having “maxed out” credit cards
• Having items taken out on credit repossessed
• Having utilities “cut off” e.g. electricity, water etc
• Constantly borrowing money from the money lender, friends and family

No one wants to remain in a position of indebtedness for any prolonged period of time. You must, make serious efforts to emerge from debt, because if you have borrowed money, it is your civil duty to repay it. Knowing that you have to emerge from debt is quite simple; however, the problem that arises is HOW. How does one begin to emerge from that “debt” sentence?

The following are some debt reduction tips:

• Reduce the Number of Creditors
  If you currently have two credit cards, for example, you ought to reduce that number to one. The best solution is to minimize the amount of expenses that you have to manage.
• Use automated payment/Salary Deductions
  One way to emerge from debt is to honour your debts by paying them via an automated debit system for example salary deductions and/or standing orders.
• Get a handle on your spending by using a budget
  Most people spend without putting thought to their purchases. A good debt reduction strategy is to use a budget. Starting by listing all of your debts, your budget will determine how much you can devote to a plan for savings, spending and most importantly reducing your debt.
• Expect the unexpected
  Build a cash cushion worth three months to six months of living expenses in case of an emergency. If you do not have an emergency fund, unexpected incidents such as a broken freezer or damaged car, can seriously upset your finances.
• Record keeping
  Create a file in which you keep careful track of debts accumulated along with an idealized payoff plan. Record keeping is the sure-fire way of controlling one’s finances and debt.
• Formulate a Debt-pay off plan
  In embarking upon a debt reduction plan, it must be decided which debt ought to be paid off. It is advised that one tries to pay off “bad debt(s)” first.
• Seek help!
  If you are encountering difficulty repaying your debts, inform your financial institution as soon as possible. These institutions may be able to make adjustments to suit your financial situation by modifying your repayment plan (s).
• Monitor your money’s final resting place
  Identify where your money goes by tracking spending over a period of time and eliminating unnecessary expenses, is another way of emerging from debt.

One of the most effective ways to avoid any future debt problems is to learn to manage your finances consistently and exercise proper money management practises.
Despite the fact that it may seem like a daunting task, your debt management strategy need not be too complicated.

Here are some simple tips:

• Save as much as you can!
  One never knows when it’s going to rain, financially speaking, so develop and sustain a good saving habit. A financial rule of thumb is that you ought to be saving at least ten percent of your monthly salary.
• Get priorities in order!
  Know your monthly expenses, prioritize them and ensure that funds are allocated for savings. Develop this into a habit and you will surely remain debt free.
• Investigate before you borrow!
  Comparison shop to find the best money bargain available, whether you’re shopping for money from a financial institution or applying for a new credit card, or simply purchasing an item.
• Once rid of debt, commit to debt free living!
  Once one is aware of the mistakes made which caused debt in addition to being able to identify debt symptoms, use knowledge acquired to implement the cure to as a life lesson to maintain debt free living.

In light of what we have covered in the article, to sum it up here are some salient tips that all persons can follow:

• Use any extra cash – whether it is savings, bonuses, extra pay checks, lottery winnings to pay debts.
• Keep records of credit card purchases, and a plan to pay for the item(s).
• Although one is required to make a monthly minimum payment, set a goal for paying major credit card debts (i.e. appliances) within a specific time frame like three to six months.
• Eat at home when possible. Avoid buying fast food and dining out too often.
• After one’s debts/bills are paid, allot a specified certain amount of cash for entertainment, shopping etc. When the cash is done, so too is the fun!
• Make extra loan payments if possible.
• Do ‘debt checks’ at intervals to keep track of how you’re going.
• Limit yourself to one credit card. Cancel all addition credit cards except the one with the lowest rate.