Monthly Archives: March 2017

The ABC's of Project Management For Project Managers

I recently watched a very interesting independent film (on DVD) that sparked a thought. The 1992 film "Glengarry Glen Ross" is a movie about some desperate salesmen in a desperate situation. Alec Baldwin, who plays Blake, engages in an extremely abusive diatribe with the sales team in which he exclaims "ABC-A-Always, B-Be, C-Closing. Always be closing, always be closing." Having been in a sales role in a previous life I had heard this before, but I reflected on this for a moment. Then I asked myself, "Are there ABC's for Project Management?"

Digging deep into my collective resources on project management I found the document that I intended use for the basis of this article. It was titled "The Competencies for Project Managers" and I thought for sure it was going to provide information that would benefit project managers in all industries. It turned out afterwards reading this document again that it was an eye opening experience for me. Although I had seen this information before in a presentation, looking at it again I discovered why the PMO in the corporation failed. The competencies listed did not tie back to any project management competencies relating to PMBOK or any other project management methodology including the very own project management solution the corporation paid for. In fact, the competencies were so generalized that they could be used for a typical managers role. But being an optimist, I have a solution so let's delve into that.

As project managers I feel we should follow the same ABC's that salesmen do but in a different perspective "Always Be Closing." Now let's break this into parameters that apply to Project Managers, this is an action oriented item. Think of all that a project manager is responsible for. First a quick review of the project management process groups, they consist of …

Initiating, Planning, Executing, Controlling and Monitoring, and Closing.

"Always be closing" in each of the project process groups. In each of these groups, there are a number of items that need to be addressed. Get them on your list or get them into the project plan and work on closing the action items. Always Be Closing!

In addition to the process groups there are the nine knowledge areas of Project Management which consist of …

Integration Management
Scope Management
Time Management
Cost Management
Quality Management
Human Resource Management
Communications Management
Risk Management
Procurement Management

For each of these groups there are items that may be determined necessary for the success of a project. Again, identify what needs to be done, get in the plan or on the task list and "Always Be Closing."

There are more ABC's of project management to keep in mind for the success of a project. The next ABC on the list is "Always Be Courteous." In respect to this, it is good to remember that as project managers we are also responsible interpersonal understanding and customer service. Interpersonal understanding involves the workings of individuals and knowing how to get the best out of the individuals on the team. I personally like the DiSC Personality Profile method of learning about your team resources. In regards to customer service, if you place yourself in the customer service role for a moment, as a project manager you are in a service role and the team members are customers. Kindness and understanding will get you farther than bitterness and intolerance.

Next on the list of ABC's is "Always be Considerate." This is not similar to the courteous guidance. This is directed towards the impact and influence of a project manager. Here is where a project manager should be considerate the organization and understand the need for relationship building. If a project manager is aware of the organizational goals and its mission, the project manager can reinforce this when the going gets tough on projects. When it comes to relationship building, as a project manager, we may need to influence these relationships in order to have an impact on the project success by incorporating the sound practices of project management. The advantages of sound process benefit the current projects and provide valuable information for future projects.

This next ABC is around the managerial side of project management and that is "Always Be Cultivating." The focus of this topic is around teamwork, developing others, team leadership and being assertive. As a project manager we are in a leadership role that is responsible for the team success as well as the project success. There are times when we may need to develop others either with mentoring or training in order to get the best results from the team resources. We need to realize that when new teams are created there is the typical forming, norming, storming and conforming. In this situation (and others) we need to provide the leadership, persuasive assertiveness and use of personal power to keep the focus on the goals of the project and strive for cooperation.

The next ABC for project managers is "Always Be Cognitive." This is the area where project managers must be up for analytical and conceptual thinking. In regards to analytical thinking, as project managers we will be dealing with various problems and complex situations. There is the need to be able to scrutinize the information and break it down into discernible facts that can deliver a solution to a situation. This is not a task specific to the project manager, this may require the team to gather and discuss the situation and follow the process to break it down and resolve it. It should be the project manager who is able to recognize this and take the necessary action. Conceptual thinking on the other hand may involve experience or training to provide solutions. Its not based purely on fact but it also takes into consideration intuitive processes, creativity and inductive reasoning. I feel that this is where an organization may consider Agile Project Management, be advised that this requires a specific type of project management mindset in order to be successful.

There are two more ABC's to consider so let's keep going. "Always Be Competent." This has four areas for consideration, self-control, self-confidence, flexibility and organizational commitment. These are pretty self explanatory yet, let's take a moment for review. Self-control is huge for the project manager as we face the issues and risks that arise during the course of a project. If we maintain our composition in the face of challenge we reflect our ability to take charge and keep a project on course. Self-confidence is an area that ties in a project managers ability to be in control of its surroundings and be confident in the outcome. It is our ability to respond positively to a situation versus react withability. The point here is to take the time you may need to think and respond accordingly. There will be times that you will be asked to find a solution, respond with what actions you may take to resolve the issue and give it a time frame. Flexibility, this is a broad topic that takes into account resources and the triple constraints of project management. Be aware of this and determine how to manage it with consideration for the success of a project. How much flexibility exists is dependent on the type of project being managed. Organizational commitment is when you work to improve the organization not the financial condition of your wallet.

Last but not least, "Always Be Communicating." Put this hand in hand with "Always Be Closing." This topic was not even on the original list of competencies but it is certainly very important. As project managers we must be on top of project communications among the members of the team and we must communicate the proper project reporting that feeds up the chain. Although it is good to get things out to the team in an email, be sure to talk to team members on the phone or in person, especially if you have tasked them to do something. I'm not sure I like the word "tasked." Why do not we just remove the "T" and follow-up on what you "asked" them to do. Communications is so important, we should be persuasive in our communication methods in order to encourage the best response from those on the team. I'll say it here, that you will not find me peeling a lemon and passing it out as a team snack. But add some sweetener and water and you'll cool down even the most heated. And really, that's what we want to do, we want to make the project work, we want the project to be successful. You should display goodness and kindness in your communications if you want it to be effective. There is a time and place to handle difficult team members, communicate in a manner that elicits the best productivity from your resources and measure the results.

Let's take a moment to recap this information. What we have reviewed here are seven ABC's of project management for project managers. Here is a list of them …

1) Always be Closing
2) Always be Courteous
3) Always be Considerate
4) Always be cultivating
5) Always be Cognitive
6) Always be Competent
7) Always be Communicating

You may want to take the time to reread this article, take some notes compare this to your current actions and see if you can improve your results. If there is something you could do to improve the success of your project, or your project team or the organization, is there something that you have learned here that can assist you? I would certainly like to hear from you. Likewise, I would certainly enjoy hearing about your experiences.

Laundromat Business Plan – Sample Layout

These days most experts will advise you to create a business plan before you decide to take the risks that are associated with starting a business. A laundromat is typically a little more complicated than other small business models so the need for research, planning and a clear direction are even more essential for entrepreneurs entering the coin operated laundry industry.

A laundromat business plan will help you to prove to yourself that your ideas are viable. With a plan in place you will be able to set clear goals and map out a path towards achieving them in an organized manner. A sound business plan may become essential if you have to show it to financiers or investors prior to getting the startup funds that you need. Lastly it will help you to be more realistic and to ask yourself some tough questions about your ideas.

In this article we have set out a sample laundromat business plan layout. We have set out some examples of titles and content that you might consider using. Feel free to use it as a template as you proceed to put your own plan together.

Cover Letter

Your plan should be set out neatly in a folder with a cover that outlines what the report is about and who contributed to it. It is likely that many different parties will read your plan so you may consider attaching a cover letter to each one that addresses the reader specifically, highlighting the concerns that they will have.

Contents Page

If the plan is any longer than a couple of pages you should include a table of contents. This includes a list of all headings and sub-headings together with a page reference so that the information can be located quickly by the reader.

Executive Summary

An executive summary is a simple introduction to the report. Give the reader a brief introduction to your business plan and summarize each of the sections in the plan.

Mission Statement

While not essential, some businesses like to set out a mission statement which outlines their purpose or business philosophy. It usually covers non-financial motives. For a laundromat you might say that you strive to provide the best service to your customers or that you want to provide a clean, safe and efficient way for them to do their laundry. Your mission should be to do your best for the customer and to be better than your competitors.


Provide readers with some background information on yourself and any other individuals who are involved with the proposed laundromat. Readers may want to know what your qualifications are and if you have had any experience in business or in the coin laundry industry.

Provide a background on the local coin laundry industry so that readers get a better understanding of the opportunities that are available.

If your planning has been in progress for a while then you might want to update the reader on what stage you are at. If you are considering purchasing an existing laundromat then you will want to outline the history of the business in this section too.

Business Description

Offer readers a basic description of the proposed coin laundry business. When will your new unit open for business? Where will it be located? Will you have an attendant on-site at the laundromat all day or only part-time?

Goals and Targets

Set out a list of realistic targets that you want to achieve with the business in the first year or two. Such targets could be financial and relate to gross or net profits on a monthly basis. They could also be related to other metrics such as membership numbers or customer satisfaction rates. Thinking longer term you may also set goals to expand into new locations.

Startup Requirements

Before you can launch your new laundromat business you must know exactly what you are going to need and how much it will cost. Costs will include everything from equipment purchases, renovations and marketing along with professional fees and compliance costs.

Once you have listed everything out you can then work out the total startup cost. From here you can mention some of the options that you have for funding the laundromat. Mention how much you will be able to contribute yourself and how much external funding you will require.

Products and Services

Go through the services that you plan on offering to customers. As well as a basic machine laundry service with washers and dryers you may also offer more upmarket services like ironing or dry cleaning. Make a note of the products that will be sold onsite. Obviously you will sell washing related products like soap powder and fabric softener but you may also offer non-related products like coffee and soda.

Market Analysis

As a prerequisite to writing a plan you should have done at least a little market research around the area where you propose to open your coin laundry. You can present your findings in this section of the plan.

In your research you should attempt to discover if there is sufficient demand for a laundromat in the area in question and if so, exactly what kind of services the people within this target market wants.

You also need to consider the competition that you have in the local area. Produce a map that shows your customer catchment area bearing in mind that customers will usually go to the laundromat that is more convenient for them to get to. Look at the strengths and weaknesses of your competitors. Is it going to be possible to pull customers from the catchment area of ​​competitiveness laundromats? Can you make your service that much more attractive than their?

Marketing Plan

Set out a plan to bring new customers into your laundromat and to convert them into regulars. The marketing component of your plan should cover everything from the development of your brand, pricing, advertising, other marketing methods and customer service.

Remember that in the laundromat business you will be relying on building long term relationships with regular customers. You not only need to focus on bringing in new customers but you also have to focus on satisfying and 'over delivering' to your existing customer base. If you retain your customers and please them then you will also benefit by referrals and 'word of mouth'.

Business Operations

Set out a plan for the daily operation of your laundromat. Make a note of the equipment that you will have in place and how the demands for water and energy will be met. Mention how you plan on maintaining the machines.

Discuss your daily staff requirements. What role will you, as the owner take in the daily running of the laundromat? How many employees will you need and what will their responsibilities be?

What other systems will you have in place to ensure that the laundromat runs smoothly on a daily basis and that you can control and manage the business efficiently. Will you have a computer system to keep track of stock and cash flows? What about a security system?

Financial Analysis

Lastly, but most importantly, a sound business plan will include detailed financial forecasts over a period of two to three years. This data is best displayed in spreadsheets so that you can set up a column for each month. Some businesses include more than one spreadsheet to allow for different situations. You may consider including one as a best case scenario and others that show revenue growing at a slower rate than is expected.

Try to identify a break even point where the business would basically be running without making a profit, but without losing money at the same time. Then you will have an idea of ​​the customer volume that you will have to aim for. To calculate break even point you need to absorb an average customer spend per visit and then calculate the number of customer visits needed on a monthly basis.

If you are borrowing money to start the business you should also include a repayment schedule to show how fast the loan will be paid back.


Many claims are made in business plans so it is important to be able to give reasons as to why you made such assumptions. Rather than guessing you should try to include data that backs up your theories. Include an appendix at the end of your plan that includes all supporting materials that do not fit conveniently into the pages of the report. These could include maps, pictures, spreadsheets, tables and lists of references and sources to name just a few examples.

The Importance of Branding and Marketing in Hospitality

Managers in the hospitality industry should understand marketing and branding. Hospitality marketing prepares future managers with the knowledge needed to ensure that their company, whether it is a well established hotel or a new restaurant, understands the way consumers think. This is extremely important, because the consumer drives the hospitality industry. Understanding the mind of the consumer and why they make the purchasing decisions that they do can prove to be lucrative. It's useful to know what role marketing and branding plays in those decisions and how you can make it work for you. Many hospitality management training courses discuss marketing and branding as a way to improve the company or brand you may work for.

As some experts discuss in hospitality management training courses, brands have something known as "equity." Brand equity is when consumers associate that brand with positive and favorable feelings. A brand's reputation and goodwill adds value to the company. Sometimes, this added value can be worth more for the company than the actual physical assets the company is worth. This is why sometimes new products are released under well-known and well-established brand names.

It gives more comfort and reliability for the consumer to trust and try the new product. This is true for the hospitality industry, for example when new hotels are often represented under one same brand name. While learning about hospitality marketing you begin to understand why these people trust these brands, which is something known as brand loyalty.

Brand loyalty is when a consumer insists on continuously buying one particular brand of a product. They stick with that brand for a long period of time and will choose it over any other similar brands, even if the unknown brand costs less. Although being in that position is considered extremely successful in hospitality marketing, it has recently become increasingly difficult to gain loyal consumers. This is due to two causes, one being that brands within the same category have become increasingly similar. The second cause is that sales promotions and lower priced deals are being offered constantly by different brands- making it difficult for consumers to just stick with one brand because they can get a better deal. However, if the quality of a brand is consistently great and no other brand can offer the same, there is a great chance that consumers will be loyal.

This can lead to what experts and marketing professionals in hospitality marketing describe as a "master brand." The master brand is a brand that is so dominant in consumers' minds that they immediately connect it with an entire product category. Branding and marketing is extremely important in getting brands to this position. Even if your brand does not reach this level of recognition, there are ways to be successful at marketing it for effective results. For example, good branding can be valuable when you have an easily identifiable brand, whether it is through the name or trademark.

As mentioned previously, another way to be successful at hospitality marketing is through consistent quality and service. As some hospitality management training courses explain, branding is also successful when the location is convenient. There are always better approaches, methods, and techniques to use to make your brand better and increase equity, loyalty, and recognition for the consumer and branding can be a big part of it. These are key concepts to remember and put into practice to establish a successful career in hospitality.

Economic Basis for International Trade!

Trade is the exchange of commodity and services. International trade representations transactions taking place at the global level, and it is fundamentally different from domestic trade. Trade at international level demands huge investments, network of franchiseses and profitable people to run the show. Many corporate giants are trying to capture Asian markets, especially Indian market, which has become the industrial hub for such economic activities. Economic liberalization has been the focus of many developing countries for the past two decades and this has allowed multinational companies with huge investment potential to enrich the weaker economies.

International trade tries to generate more foreign exchange, which is always good for the economy. Say, if a country has rich resources of petroleum, naturally it will try to sell the surplus to countries not endowed with such natural resources. That is why Middle East nations are prosperous and economically independent. The diversity in productive capabilities in different countries is due to the presence of limited natural resources. When a country gets a head start in a particular product, it can become the high volume, low cost producer. The economies of scale give it a significant advantage over other countries, which find it cheaper to buy from the leading producers than to make the product themselves.

Every nation must try to specialize in the production and export of those commodities, which are available in plenty and must import such products in the production of which they have a resource deficiency. It should be remembered that there are sever man made barriers in international trade such as, export duties, quotations, exchange restrictions etc., that hinder the free movement of products. Neverheless, it is not also possible for a country to produce domestically every kind of product. In spite of all these restructuring factors, global trade is thriving, thanks to the advanced technological aspects introduced in communication and faster means of transportation. Distance is no more a constraint and the world has become one small global village.

All domestic transactions, say in a country like India take place in rupees, which is the legal tender in the country. However, in its trade with other countries like USA, Germany, Japan, France and Britain, the payments have to be made in terms of dollars, marks, yens, francs and pound sterling respectively. The mechanism through which payments are executed between two countries having different currency systems is called foreign exchange. It may also be defined as the exchange of money or credit in one country for money or credit in another.

Foreign exchange rates can affect relative prices and net exports. A rise in the a nation's foreign exchange will depress that nation's net exports and output, while a fall in the foreign exchange rate will increase net exports and output. Because of the significant impact of exchange rates on national economies, countries have entered into agreements on international monetary agreements.

How To Reduce Construction Cost By Over 50% And Still Maintain High Quality – Part 1 – Foundations

Construction material cost has been steadily increasing over the years.

5 years ago, the average construction cost in Nairobi for a medium-priced building was KES 15,000 per square meter.

Currently, this cost has increased by 68% to an average of KES 22,000 per square meter for the same.

The trend does not seem to be slowing down any time soon.

Therefore, we need to think outside the box to keep costs low and still maintain the same or oven higher quality of construction.

This can be achieved by using ingenious methods of cost-cutting from the foundation stage through to the fines.


On average, foundation costs approximately 10% of the total cost of construction.

The main works in a foundation are:

1. Excavation

2. Reinforced concrete works [foundation footing and ground floor slab]

3. Masonry walling to ground floor level

Excavation costs can be reduced by use of machinery -Excavators. An excavator is rented at an average cost of KES 6000 per hour and would take 2 to 3 hours to excavate the foundation of a 3 bedroom house.This brings the cost to kes 6000 x3 = kes 18,000.

Excavating the same using manual labor would take an average of 7 days with 10 men at a cost of kes 300 each per day. This brings the cost to KES 300 X 10 X 7 = KES 21,000.

Reinforced concrete works

This consists of concrete reinforced with twisted steel.

A cubic meter of concrete on average takes 7 bags of cement and will cost a minimum of KES 8,000.

A cubic meter of masonry stone consists of 75 stones of 300mm long by 200mm wide. Each stone costs an average of KES 25. This estimates to approximately KES 25 X 75 = KES 1,875.

This is approximately 75% cheaper than concrete.

The reinforced concrete foundation footing can be replaced with masonry walling to achieve this great saving.

Ground Floor slab.

On average, a reinforced concrete ground floor slab costs KES 1,200 per square meter.

Masonry walled horizontally can replace this slab. A square meter of masonry walling using machine cut stones costs KES 40 X 15 Stones = kes 600. Add KES 100 for cement plaster and this brings it to KES 700 per square meter. This constitutes a savings of nearly 45%.

Old colonial homes built in the early 1900s in Kenya utilized these cost-cutting methods and are still standing to date.

A good example is the Officer's Mess at the National Youth Service Bahati Farm in Nyandarua.

The foundation footing and floor slab is made of masonry walling and it still stands to date, nearly 100 years from the day it was constructed.

With the passage of the new constitution, we hope that such a method of foundation construction will be allowed by the Local Authority. The current Building Code in Kenya specifics too much concrete / cement used because resulting in a high cost of foundation construction.


With the use of Machinery for excavation [15% savings] and use of masonry to replace reinforced concrete on foundation footing [75% savings] and ground floor slab [45% savings], this will greatly save on the overall foundation construction costs.

Francis Gichuhi

Four Major Forces Creating Change in Organizations Today – Skills That Leaders Need

Globalization, technological changes, knowledge management and cross boundaries collaboration are four factors that are major forces creating change in organizations today.

These changes affect decision-making as organizations are forced to recognize that they need leaders who are innovative, creative visionaries who understand the various environments that their organizations are operating in, and are capable to differentiate between these different environments.

These environments include: the external or operating environment ; The competitive environment (that part of the external environment in which firms that are competitive for the same market exist) and the macroenvironment in which influences such as the economy, government regulations, societal values, demographics and technology come to bear upon an organization.

Faced with such complexities leaders need to be equipped with appropriate skill-sets such as flexibility, good communication, and critical thinking and negotiation abilities. They must also be supported with the necessary resources in order to make good decisions that will benefit their organizations.


A convergence of international activities such as the increase in overseas production of goods and services; Increasing consumer demands in emerging markets worldwide; Declining barriers to international trade aided by rapidly changing technology, have created a globalized economy in which inter-dependency among countries has emerged as the norm today. Therefore the hiring practices of companies who are seeking the best talent have changed because the best talent may no longer be resident in the home country.

Companies have had to calibrate their hiring, training and management practices to meet this challenge. In a world where "Americans too often come across as intrusive, manipulative, and garrulous" (David, 2007, p.291), US organizations have to be respectful of the culture, customs, political, and legal differences of the countries that they Are operating in.

Some of these customs affect protocol such as the exchange of gifts, the observation of holidays, and labor laws. Even accounting standards vary internationally. Therefore organizations must be sensitive to these differences when formulating operating and human resource (HR) policies for implementation abroad, in this global environment, it is very likely that companies can apply the domestic policies that work at home, abroad.

Technological Change:

Technology is like a two-edged sword that can make our lives easier or worse. The Internet has revolutionized the way in which information is exchanged, communication facilitated and commerce conducted. Technology is rapidly changing and effective management demands more knowledge in these areas in order for companies to manage their resources and develop, maintain or keep their competitive edge.

While technology has enabled firms to save time and money by conducting business such as negotiations, trade, and commerce in real time, it can also facilitate the issuance of sensitive information about a company's practices, trade secrets and new product development in a matter of seconds .

Hackers can break a company's security via the internet and put companies at risk. Organizations have responded by having whole new types of departments such as Information Technology (IT) departments, headed by managers with titles such as Chief Information Officer (CIO), to manage both the opportunities and the risks associated with technological changes.

Additionally, technology has ushered in an array of high-tech devices that aid and facilitate companies in gathering and managing information, maintaining contact with their employees globally, making and communicating decisions instantaneously. This can be both a boon and a source of stress for managers and leaders who must learn to manage their choice and use of these devices. In a global economy technology can aid in knowledge management

Knowledge Management

Driving forces such as shifts in buyer demographics and preferences; Technology, product and market innovation; Changes in society, consumer attitudes and lifestyle all demand new ideas. This has created a need for knowledge workers .

Knowledge workers combine a company's intellectual capital and are made up of creative people with novel ideas and problem-solving skills. Managing its knowledge assets can give a company a competitive edge as it effectively utilizes the expertise, skills, intellect, and relationships of members of the organization.

For example, a company's strategic management efforts can be greatly enhanced when knowledge that is resident in its international talent pool is tapped at its source, since a manager who is "closer to the ground" and part of the local culture might be better able to Sense environmental changes than one who is not.

Keeping knowledge workers motivated and incentivized by both intrinsic and extrinsic means will cause organizations to re-think and change their benefits and compensation methods and, sometimes, even redefine the traditional view of the employer-employee relationship into something new, such as a company- Contractor model, for example.

Cross-boundaries Collaboration

An important part of knowledge management is effectively managing organization-wide collaboration. Use of appropriate technology and applications such as a virtual private networks; VoIP, e-mail, social networking websites such as Face Book, and even company-sponsored blogs can facilitate communication between an organization and its stakeholders, and help in different types of internal and external collaborative processes. An example of a tool that can be used in cross-boundaries collaboration may be an easily accessible online database that provides a central source of information to employees, customers, or suppliers.

Managing in the 21st Century

In the 21st Century change is the norm rather than the exception and leaders must be able to embrace it. They need to be able to develop:

  1. A vision, and be able to communicate it to their organizations
  2. An orientation to serving
  3. An entrepreneurial mind-set
  4. A commitment to continuous innovation
  5. A global mindset
  6. Ease and confidence with technology
  7. Know-how in systems thinking (a broad view of the inter-relationship of an organization's parts, rather than a narrow view that is focused on one part or event.)
  8. A sense of ethics and appreciation of spirituality in the workplace
  9. A commitment to continuing learning, personal and professional development

In order to respond effectively to the four major forces creating change in today's global economy leaders must be willing to embrace change; They must be curious and appreciative of the richness and diversity of other cultures. The must be trust-worthy and flexible; And they must have very strong time management, communication, conflict-management, problem-solving and people-skills in order to effectively manage these drivers of change.


David, Fred R. (2009). Strategic Management, Concepts and Cases , 11th ed. (P. 291). New Jersey: Pearson Prentiss Hall.

Ruth M. Tappin

© 2009

Understanding Logistics

According to Ghiani (2004), logistics can be defined as the planning and controlling of products and information in an organization. It aims at delivering materials to a given destination for another trying to optimize a particular measure and ensuring satisfaction of a particular set of constraints. These definitions can be simplified to mean the managing of the flow of goods as well as services from the point of manufacture to the point of consumption ensuring that the requirements of the consumer are observed. Activities under logistics include information integration, warehousing, packaging, inventory, security, transportation, as well as handling of materials. Logistics compliments supply chain by add value to place, as well as time utility.

Logistics are identified in different fields due to performance value. These fields include procurement, after sales, production, disposal, as well as distribution fields. This paper will identify the areas where organizations involve logistics as well as the essence of an effective logistics to an organization.

These fields of logistics determine specific activities. Procurement logistics involve make/buy decisions, supplier and other management, as well as market research. Production logistics’ key principle is to connect procurement to distribution logistics. This field of logistics determines the capacities of production under available resources in response to distribution logistics. Distribution logistics deal with delivering of finished goods to the consumer or rather customers. Its components include processing, warehousing, as well as transportation. This logistics is most essential since the time, place as well as quantity of production vary from the time, place, and quantity of consumption.

Today, logistics have been simplified through technological advancements. Complexities which hinder effective logistics management can now be visualized, modeled, optimized and analyzed through particular simulation software. These complexities have necessitated the use of this software. Successful businesses are using this software to case the work of logistics analysis and hence providing effective strategies of managing supply and demand. Problems in logistics majorly occur in organizations that engage in product delivery but they can also occur in firms producing services (Ghiani, 2004). Examples of this include garbage collection, after sales services, as well as mail delivery, among others. Maintenance and operational cost of logistics is another hindrance of its use. Research conducted in the United Stated in 1997 proved that organizations used 862 billion dollars as the total logistics expenditure. It is hence essential for organizations to understand how to minimize logistics cost (Rushton, 2000).

Reliability and sustainability are other factors which affect the efficiency of logistics. Reliable systems as well as equipment’s should be able to perform intended purpose for the identified period under stated conditions through effective logistics. Inefficient logistics will lead to a wrong probability on performance capabilities of systems hence causing massive losses. Reliability will thus project the probability of systems and equipment in an organization (Landford, 2006).

In conclusion, the main issue under logistics is deciding how and when raw goods and finished products will be shipped, transported, and stored. This unlike other operations management is most evident in modern societies. A logistics system comprised of facilities that have been corresponded to the transportation services. Facilities include locations where goods are processed, and they include manufacturing centers, distribution centers, transportation terminals, as well as dumpsites, just to mention a few. The transportation services move goods between the facilities.

Mezzanine Financing Overview: What It Is, Pros and Cons, and Common Situations

If you’re raising growth capital to expand your business, you may want to consider using mezzanine financing as part of your funding solution.

Mezzanine financing is a form of debt that can be a great tool to fund specific initiatives like plant expansions or launching new product lines, as well as other major strategic initiatives like buying out a business partner, making an acquisition, financing a shareholder dividend payment or completing a financial restructuring to reduce debt payments.

It is commonly used in combination with bank provided term loans, revolving lines of credit and equity financing, or it can be used as a substitute for bank debt and equity financing.

This type of capital is considered “junior” capital in terms of its payment priority to senior secured debt, but it is senior to the equity or common stock of the company. In a capital structure, it sits below the senior bank debt, but above the equity.


  1. Mezzanine Financing Lenders are Cash Flow, Not Collateral Focused: These lenders usually lend based on a company’s cash flow, not collateral (assets), so they will often lend money when banks won’t if a company lacks tangible collateral, so long as the business has enough cash flow available to service the interest and principal payments.
  2. It’s a Cheaper Financing Option than Raising Equity: Pricing is less expensive than raising equity from equity investors like family offices, venture capital firms or private equity firms – meaning owners give up less, if any, additional equity to fund their growth.
  3. Flexible, Non-Amortizing Capital: There are no immediate principal payments – it is usually interest only capital with a balloon payment due upon maturity, which allows the borrower to take the cash that would have gone to making principal payments and reinvest it back into the business.
  4. Long-Term Capital: It typically has a maturity of five years or more, so it’s a long term financing option that won’t need to be paid back in the short term – it’s not usually used as a bridge loan.
  5. Current Owners Maintain Control: It does not require a change in ownership or control – existing owners and shareholders remain in control, a key difference between raising mezzanine financing and raising equity from a private equity firm.


  1. More Expensive than Bank Debt: Since junior capital is often unsecured and subordinate to senior loans provided by banks, and is inherently a riskier loan, it is more expensive than bank debt
  2. Warrants May be Included: For taking greater risk than most secured lenders, mezzanine lenders will often seek to participate in the success of those they lend money to and may include warrants that allow them to increase their return if a borrower performs very well

When to Use It

Common situations include:

  • Funding rapid organic growth or new growth initiatives
  • Financing new acquisitions
  • Buying out a business partner or shareholder
  • Generational transfers: source of capital allowing a family member to provide liquidity to the current business owner
  • Shareholder liquidity: financing a dividend payment to the shareholders
  • Funding new leveraged buyouts and management buyouts.

Great Capital Option for Asset-Light or Service Businesses

Since mezzanine lenders tendency is to lend against the cash flow of a business, not the collateral, mezzanine financing is a great solution for funding service business, like logistics companies, staffing firms and software companies, although it can also be a great solution for manufacturers or distributors, which tend to have a lot of assets.

What These Lenders Look For

While no single business funding option is suited for every situation, here are a few attributes cash flow lenders look for when evaluating new businesses:

  • Limited customer concentration
  • Consistent or growing cash flow profile
  • High free cash flow margins: strong gross margins, low capital expenditure requirements
  • Strong management team
  • Low business cyclicality that might result in volatile cash flows from year to year
  • Plenty of cash flow to support interest and principal payments
  • An enterprise value of the company well in excess of the debt level

Non-Bank Growth Capital Option

As bank lenders face increasing regulation on tangible collateral coverage requirements and leveraged lending limits, the use of alternative financing will likely increase, particularly in the middle market, filling the capital void for business owners seeking funds to grow.

Entity Documents Typically Required

If you are applying for a loan and there are entities involved be smart and make sure you have all of the correct paperwork and that it is up to date. I have seen many loans get postponed until proper documentation is received by the bank. Here is a list of documents for the most common entities that you will most likely have to provide before closing your loan:


Articles of Incorporation

Amendments-(if applicable)

Fictitious Business Name Statement-(if applicable)

Statement of Information-No more than one year old if the Corporation is “for profit”


Amendments to Bylaws

List of Corporate Officers and Directors, stating the % interest owned by each – Signed & Dated

Secretary of State website indicating the Corporation is “Active”

Certificate of Good Standing-No more than 30 days old

Borrowing Resolution

Is the Escrow Vesting Correct


Statement of Partnership (GP-1)

Amendment-(if applicable)

Fictitious Business Name Statement-(if applicable)

Partnership Agreement

Certificate of Good Standing-No more than 30 days old

Borrowing Resolution

Is the Escrow Vesting Correct


Articles of Organization (LLC-1)

Certificate of Amendment (LLC-2)-(if applicable)

Fictitious Business Name Statement-(if applicable)

Statement of Information (LLC-12)-No more than two years old

Operating Agreement

Amendment to the Operating Agreement

Secretary of State website indicating the LLC is “Active”

Certificate of Good Standing-No more than 30 days old

Borrowing Resolution

Is the Escrow Vesting Correct


Limited Liability Partnership Registration (LLP-1)

Amendment to Registration of Limited Liability Partnership (LLP-2)-(if applicable)

Fictitious Business Name Statement-(if applicable)

Limited Liability Partnership Agreement

Board of Accountancy website indicating licensing is “Current”

Certificate of Good Standing-No more than 30 days old

Borrowing Resolution

Is the Escrow Vesting Correct


Certificate of Limited Partnership (LP-1)

Certificate of Amendment (LP-2)-(if applicable)

Fictitious Business Name Statement-(if applicable)

Limited Partnership Agreement

Amendment to Limited Partnership Agreement

Secretary of State website indicating the LP is “Active”

Certificate of Good Standing-No more than 30 days old

Borrowing Resolution

Is the Escrow Vesting Correct


First Page of Trust

Appropriate Powers

Signature Page of Trust

Certification of Trust

Is the Escrow Vesting Correct.

What Services Do Property Management Companies Offer?

Owning real estate is a wonderful feeling, especially for those who have really toiled for many years to become a property owner. Though it might sound a little materialistic, but a property is actually a mark of someone’s hard work. Thus, when a family has to relocate to some other place far from their land or property, due to job commitment or any other reason, it is a natural concern to be worried about the property. Managing the property effectively, without keeping an eye on it regularly, is almost impossible for the landlord. This is exactly when a property owner should start looking for a professional property management company. However, it is good to know what services these property management companies offer before you go ahead and fix a meeting with any agency. This would actually give you a clear idea of what you should expect and ask for while interviewing the property manager.

Basically, these companies deal with flats, villas, independent houses, rental apartments and commercial properties. Once you sign a legal agreement with any of these companies, it actually becomes their responsibility to rent out your property by searching suitable tenants. To look for right tenants, they advertise your property through the local media. The replies that come to the property advertisement are promptly attended by the company. Their expert staff then shows the whole rental property to the prospective tenants. In fact a clear and detailed report is provided to the landlord on all those potential tenants who had come to check out the property. This is to ensure that the landlord makes a right decision. Once the tenants are finalized, then the company would execute a rental agreement.

The responsibility of the company does not end here. They collect monthly rent on the landlord’s behalf and deposit it into his bank account. Apart from the timely rent collection, the professionals would also visit the property regularly, in order to make sure that it is efficiently maintained and not harmed by the tenants. Professional photographers are hired to take the photographs of various parts of a property to be sent to the landlord. Though these visits by the property managers are periodical, they are always keen to help tenants if they find anything objectionable.

Also, in case there is a repair work to be done, the company takes care of it by appointing an external contractor to fix the problem areas. Another very important service offered by a property management agency is conducting an inventory audit. It is conducted when a property is rented out to a tenant and when he/she vacates it. The reason for conducting this audit is to make sure that all physical assets of the property are in a good condition. To summarize, the services proffered by a property management company play a pivotal role in reducing the burden of a landlord, owning multiple properties. Therefore when you actually enter into a contract with such a company and you can indeed be totally assured of getting quality services.