Deal With Credit Issues

Stagnation vs. Dynamism. Stagnation occurs when there is no infusion of new energy into the organization or relationship. In a closed organization with no partnerships (past orientation), change is undesirable and suppressed. Dynamism results from the infusion of new energy and ideas (future orientation), and it is essential if a business is to successfully change with the demands of its customers and markets. How stagnant or dynamic is your organization’s culture?

Alienation vs. Collaboration. Organizations that isolate themselves cannot form partnerships with others. There is a lack of trust toward people both inside and outside the organization, which results in alienation (past orientation). Collaboration (future orientation), on the other hand, involves the give and take of information and a degree of self-disclosure, which results in building trust between people. How would you rate your organization on the alienation–collaboration scale?

Where a person transfers anything of value either on death or during his lifetime, Inheritance Tax (IHT) may be payable. This fact could have a dramatic impact on the way a business owner structures a family succession plan.

IHT law, like most tax laws, is complex and an understanding of its implications requires careful study. Business owners contemplating a family succession as an exit route should obtain early advice on IHT law from their tax advisors.

On death the transfer of an estate of a UK resident up to a certain value is tax-free.

For the tax year 2005/2006 the tax free amount is £275 000.

Transfers to your spouse of any property either in life or after death, if both spouses are resident in the UK, are also free of tax.

Gifts can be tax free if certain conditions are met. These conditions include that the transferor lives for seven years after making the gift, or that the gift does not exceed a certain (relatively small) value, or that the total value of gifts does not exceed a specified amount in any single year.

Besides the exemptions for transfers after death and for gifts made in life, there is also significant business property relief under the IHT legislation, which could be crucial for business owners wishing to dispose of their business assets to family members, either through a sale at less than arm’s length, or through a gift, or a combination of both.

The economic influences on pricing include monopoly and the extent of competition. Antitrust legislation aims to stop abuses of market power by big companies and to prevent mergers or acquisitions that would create a monopoly. Supply and demand affect pricing, because generally when supply exceeds demand prices will fall. The converse is also true: when demand exceeds supply prices will rise. One sales technique is often to stimulate demand by creating a perception of scarcity. Linked to this concept is price elasticity of demand, which highlights how the volume of demand is influenced by changes in price.