Google Gadgets, Yahoo Widgets & Myspace Widgets – Social Media Marketing On Demand

Remember the film “Field Of Dreams” and the tagline “If you build it, they will come?” Well, the same goes true for a Google Gadget, MySpace Widget or Yahoo Widget. Social Media Marketing and Viral Marketing are the crux of the online industry. Create a great looking website, fill it with informative content and useful information and viola – you have something that people will want. Something people will even be willing to pay for.

The trick is to get them to see your website. This is where viral marketing and social marketing come in. It is amazing what a few simple tricks that you can learn on the internet can do for your business. Creating a Google Gadget or a Yahoo Widget is not difficult at all. These are little bits of code that can be implanted in text. Because they are attractive little photo codes, they are appealing in text and can be put just about anywhere. Many people use these as their signatures on forums and blog posts to draw attention to their websites. They are very, very effective marketing tools and not difficult to create.

There are several tutorials online about how to create a widget or gadget. The first thing you need to understand is that this will connect to a website. Every time the website updates, the text that you use can update. A widget or gadget can be used in many different ways. For the most part, however, they should be used as a way to update information.

If, for example, you connect your widget to the weather channel, and you incorporate it into text into your website, your website will be updated every time the weather changes, which is often. This can continue to keep your website updated and at the top of RSS feeds.

If you change your website frequently, you will want to build a gadget or widget connecting it to your website. Again, with every change, the widget will automatically reflect that a change is being made. If you have subscribers to your website, even if it is a social page on MySpace, anywhere you post the widget online will continually update each time you change your MySpace page.

Think of what you use in your business that repeats often. Instead of constantly notifying people that you have a new shipment of a certain product, for example, you can incorporate a Google gadget into something like a subscriber link and have it automatically update each time you change your website. You can spread the links all over the internet, on bookmarking sites as well as social networking sites and the sky is the limit.

Building a Yahoo Widget, MySpace Widget or Google Gadget is simple and fun. There are fun tutorials that teach you how to complete this task. Just think about what you want to do with the gadget or widget and how you want to use it. Then log onto the Google, Yahoo or Myspace and follow the prompts. Then you can start building it.

Why Use EBITDA Instead of Net Income When Valuing a Business?

When calculating the value of a business most valuations rely on a multiple of EBITDA instead of a multiple of profits. Occasionally, a buyer will object, saying that his return will be after taxes, interest, and depreciation so the profit figure should be used instead of EBITDA. The reason that approach does not work is that the cost of the items that are backed out in EBITDA depend on the sellers circumstances and may be quite different for the buyer.

Let’s look at an example. Assume that we have two businesses (A Widget Inc. and B Widget Maker). Each of the two companies produces the same number of identical widgets, which they sell for the same price, using a machine that cost $2,000,000 and each financed the machine using a bank loan. Because of their credit histories the first company pays 5% on the loan while the second company pays 15%. A Widget Inc. is a sole proprietorship and so shows no corporate taxes on its income statement but B Widget Maker is a C Corp it is paying $100,000 in corporate taxes. Our two widget companies occupy identical buildings, side by side. A Widget Inc. acquired their building a decade ago and this year will be able to take only $100,000 in depreciation. B Widget Maker acquired their building only one year ago and because of the high purchase price will be able to take $400,000 in depreciation on this year’s income statement.

Let’s look at the income statements for these two companies:

……………………………. A Widget Inc……….B Widget Maker

Sales…………………………5,000,000……………..5,000,000
Cost of Goods Sold……..2,000,000……………..2,000,000
Other Expenses*…………1,000,000……………..1,000,000
EBITDA……………………..2,000,000……………..2,000,000
Interest……………………..100,000…………………..300,000
Taxes……………………………….0……………………..100,000
Depreciation…………………100,000…………………400,000
Profits………………………..1,800,000……………..1,200,000

*All other expenses except Interest, Taxes, and Depreciation.

In our simplified universe, based on the excess earnings method of valuation, A would be worth 50% more than B (since 180,00 if 150% of 120,000). But let’s look at what happens to their earnings after you acquire them.

You are going to refinance the machines. Your credit history is better than B’s but you are unwilling to pledge your house as collateral (which A did to get his low rate) so in both cases you could get a rate of 7% (making the interest only payment on the loan $140,000). In both cases you will mark up the value of the building to fair market value, on which you’ll be able to take $450,000 in depreciation. Your company is organized as a C Corporation, and you project taxes on the additional profits at $80,000. Post acquisition, in either case your profits are identical.

So, you ask why not pay on a multiple of what you project your EBITDA would have been? You may internally calculate the rate of return that you’d like to see after non-cash expenses but talking to a seller about your taxes, methods of depreciation, and financing costs is never a good idea. and remember that if you are calculating a multiple based on profits and you want to close deals you’ll need to make the multiple higher since other buyers will be basing theirs on EBITDA.

Finally, I want to add a note about depreciation since with this non-cash expense the problem becomes a little more complex. There is a great deal of latitude in choosing what depreciation method a company uses and often the useful life that is assumed for depreciation is not an accurate reflection of the real world. You certainly do not want to value a company more highly simply because it chose a less aggressive depreciation schedule. In some circumstances, however, depreciation may represent a reasonable approximation of a real expense. I have, for example, seen buyers in the non-emergency medical transportation business who used a seven year depreciation schedule as a proxy for the cost of replacing a fleet of vehicles, which they decided was necessary roughly every seven years. In those cases I have seen buyer and seller agree to talk in terms of EBIT.

Make a Business Plan for Working from Home

One of the biggest mistakes those who work from home make is neglect creating a business plan. Oftentimes they are thinking that because they work at home, a business plan does not apply to them as it would for other types of business startups where financing is needed. Of course there are home businesses that need financing to start up but oftentimes the reason why people choose a home business is because little startup capital is needed (i.e., financing). But you still need a business plan. Lets look at a few reasons why.

A business plan defines your product or service. First, you need to decide what products or services you are going to offer when you work from home. You need to take your business idea and write it down. This will be the basis of further market research to test your idea. For example, lets say you make a great blue widget and decide you want to go into business and sell it. So, you declare that you will sell blue widgets. However as you do market research you find out that everyone is now buying yellow widgets and blue widgets are no longer in demand. This means in order to work at home and sell widgets, you will have to adapt to make and sell yellow ones. Our example uses imaginary widgets but you can replace widget with your idea and see if there is a market for it. Deciding what it is you want to sell or the service you want to offer now will save you expense later on.

A business plan identifies your target market. If you have no idea who your target market is for selling your product or service then you do not know where to focus advertising for your home business. Using our widget example, it could be that younger people like yellow widgets with green stripes while senior people like plain yellow widgets. With the business plan, you can write this research down so that you can refer to it as you build the marketing strategy for your home business.

A business plan identifies your competition. You have to identify your competitors and as much as possible pinpoint what they do right and how you can do it better. Remember that in order to increase the chances for success of your home business, you must have characteristics that set you apart from your competition. A business plan lets you identify what it is that will set you apart and by writing it down you can refer to it and stay on track.

A business plan defines the daily operation of your business. Your home business [http://www.beasuccesfulconsultant.com] might be a one-person shop but you still need an operational plan. For example, what are your terms of service? What are your payment policies with your clients? What are your delivery procedures? Who are your suppliers if you have them? These are just a few of the questions you will answer in a business plan for your home business.

A business plan identifies any loan requirements. As mentioned before, one of the big reasons why people set up home businesses is that the capital investment requirements are lower. However there are certain types of businesses where you might need people to invest money or you have to get a loan from a bank. These people wont even meet with if you have no business plan.

Get yourself a self-help book and read how to make a business plan [http://www.beasuccesfulconsultant.com] for your home business. It might seem labor-intensive but it will help your business be more profitable and run smoother in the long run.