AT&T sells Japanese domestic outsourcing unit to IIJI

AT&T sells Japanese domestic outsourcing unit to IIJI
AT&T (NYSE: T ) made it official today that it will sell off its Japanese domestic outsourcing services to Internet Initiative Japan (NasdaqGS: IIJI ) for $100.7 million. Under the terms of the agreement, IIJ will acquire a subsidiary created by AT&T to sell off its Japanese unit. In acquiring the unit, IIJ will gain about 1,600 domestic Japanese business customers and 250 AT&T employees who …

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Money Management Tips for the Home Business Owner

Working from home is becoming a large desire for many people. The ability to set your own schedule and to be your own boss is a large benefit. As with any business opportunity, there are risks involved and you could lose more money than you gain. To help you avoid any financial losses with your business, it is important that you follow basic money management tips.

While your idea of working from home probably does not involve annoying record keeping, it is still important to set a side enough time in order to manage the money that you have coming in and going out. Having an effective management system will lessen the time that it takes and ensure that all of the records are organized.

The following are effective for money management systems:

Software

A software program that you can load onto your computer is an easy and convenient way to keep track of your entire home based business finances. You can input checks, keep track of a payment calendar and create a budget. There are various business software programs on the market by different companies, but you will have to choose appropriately so that it will benefit your business.

Invoices

Having professional supplies is important for any business. Customers feel more secure with companies when the receipts and invoices look legitimate. For example, creating invoices in word-processing programs will benefit your company and your money management system.

Look to see if your computer is already equipped with a program for invoices. Usually, they have templates that you can use. Not only will these invoices be effective with companies, but you can refer to these when you are trying to compile your list of incoming finances.

Business Bank Account

It is never a good idea to mix your business money with your personal money. Not only will this be a red flag for customers, but it will be very confusing when you are trying to manage your money. Open an account at a reliable bank that has suitable interest and very low fees. You can find a good bank by asking other business owners. Many banks also offer a program that is beneficial for business owners.

Create a Budget

While this is probably common sense, you would be surprised at the amount of home based business owners who forget this aspect. The end result is that they overspend and are left digging in their personal money accounts in order to get out of the negative with their business account. As mentioned earlier, you can do this in a computer software program.

A budget is essential in planning for future income and any expenses that occur on a monthly basis. Make sure that you compare the planned income and expenses with your actual income and expenses.

Before you make a purchase for your business, consider if it will actually improve your sales, or if it will set you back for the next month. Not only will budgeting help you gain control over your finances, but you will feel more secure about your money.

Cash Flow

It is your responsibility to collect the necessary cash from customers. To do this appropriately in order to maximize your business, collect all necessary cash made from products at the time of delivery. This will decrease that amount of customers that do not pay and decrease your overall money loss. A great way to make this happen effectively is to offer a credit card payment option with your customers. This will motivate them to pay faster.

Overall, the way that you manage your money for your home business is responsibility and discipline. You are the only one that can impact the funding of your business and the way that the money is controlled. If you manage your money effectively, you will greatly improve the way that your business is operated.

VoIP Solutions: Helping to Expand Business Plans

VoIP Solutions have so many advantages and serve as an excellent platform to help users access a well defined communication mode that is most contemporary. It is interesting as one can make long distance or international call at much lower cost as compared with traditional phone line. Low cost being a revolutionary benefit, there are also other services such as calling card platform, callback services, IP PBX solution, SMS delivery solution and three way calling.

This method offers cost savings by providing unbeatable rates. The user can make use of this service from any place of the world. One can dial a number and instantly get connected with the end user. The VoIP solutions include services such as SMS call back service and web call back service. The card is a value added service and offers hassle free activation. An organisation can increase its overall productivity by making use of the IP PBX solution. The user can make intra and inter office calls. It is possible to get reports of the number of calls made during a specified period of time.

Thus, VoIP has grown with the number of VoIP solution provider increasing day by day. Residential as well as business customers have started to understand the importance of this high speed internet connectivity. The users are more accustomed to its user-friendliness and belief that Voice over telephony is a larger means to productive business.

VoIP Solution has many uses. It offers mobile internet calls, private lines, telecommuting, network of free calls and more. It can also be installed in office areas whereby the user can create a virtual network that makes it possible for users to make VoIP phone calls free of cost. Then there is the mobile internet phone service with which a user can make calls even while one is travelling.

The VoIP business solutions offered by service providers are scalable. So, a business finds time and opportunity to expand. The PBX can also be configured as now the users can modify its features though an internet site that is highly secure. This system helps to achieve productivity in business and users can utilise it for other purposes also. The users make use of it to listen to voice mails, achieive call forwarding and simultaneously make use of the individual fax numbers. Infact, it is found that VoIP solutions are cost effective for an organisation where the employee strength of 5 to 100. It also works well in large establishments.

Business can be expanded with the VoIP solution provider. An organisation can expand to multi-locations with VoIP coming to its aid. Moreover, business options has increased with Queue systems and voice-mails. The Queue Report can be gathered from VoIP portals. VoIP solutions can terminate calls free of cost if it is within its own network. In case it is outside its network, low charge rates are made for each call.

Energy program can save small business customers money

Energy program can save small business customers money
PEARL RIVER Eligible O&R small commercial customers in New York can save energy, lower their bills and reduce their carbon footprint through an O&R’s energy initiative.

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A Closer Look at Lexmark

In 2005, Berkshire Hathaway bought about a million shares of Lexmark. I haven’t followed this story closely, but I assume the stock was purchased by Lou Simpson rather than Warren Buffett. I have only two reasons for believing this: the total purchase was small relative to Berkshire’s investable assets and the Lexmark purchase is typical of Simpson’s investment philosophy (or at least, what little I can glean about his investment philosophy from his past purchases). Regardless of who actually makes the purchases, a new Berkshire holding always draws a lot of commentary.

The commentary on Lexmark has been almost uniformly negative. Even many value investors have a very dim view of Lexmark at these prices. Now, I am not a contrarian investor. Psychology and sentiment do not enter into my considerations at all. I’ve bought stocks trading near five year lows, and I’ve bought stocks trading near five year highs. I just try to be rational. I’m not afraid to agree with the consensus, if it’s an accurate representation of reality. Here, it isn’t. The model of Lexmark that has emerged in my mind over the past few weeks bears little resemblance to the Lexmark I’ve seen described elsewhere.

Most of the negative comments about Lexmark have focused on the consumer segment. Yet, more than 75% of Lexmark’s profits come from the business segment. The business segment is Lexmark’s franchise. There, the company has managed to build a moat, not a very wide moat, but a moat nonetheless. Lexmark is the only focused, integrated printing company of any consequence. It understands its business customers’ needs, and provides specially tailored solutions that none of its competitors can offer. Worldwide, some very large companies use Lexmark’s products for some very specialized tasks. Among these are retailers, banks, and pharmacies. Lexmark has complete control of their product including the printing technology itself and the software used to manage its printers (i.e., to interface with the user’s computer). Businesses that care about getting these specialized tasks done right (and getting them done cheap) use Lexmark.

Even Lexmark’s competitors have to concede the fact that Lexmark knows printing better than anyone else. Lexmark is the only company that develops its own ink – jet, monochrome, and color laser technologies. It is a vertically integrated printer business like no other. The two competitors most often mentioned as threats to Lexmark are HP and Dell. While everyone will suffer from deep price cuts; I think it’s HP and Dell who should be scared.

Lexmark has the much stronger competitive position. For years to come, it will be launching the best printing products for high ink consumption tasks. Lexmark hasn’t been focused on competing directly with these companies in the consumer segment; that’s going to change because of the emerging photo printing market.

Lexmark isn’t interested in selling hardware. It’s interested in selling ink. Now that there is real demand emerging for high quality printing within the home, Lexmark is going to start going after the consumer market. Over the next few years, Lexmark will be selling more printers in this segment. A few years after that, the company will see strong recurring revenues from ink sales.

Generic ink cartridges are the biggest threat to the high margin printing business. However, I believe, of all the players in this industry, Lexmark will be the least affected. Its highest margin sales are its most insulated sales. Its lowest margin sales, in its least dominant businesses, are where generic ink will hurt the most.

There is also some concern that Dell could always move away from using Lexmark printers. Let them. From what I can see, sales to Dell will not be a particularly significant high free cash flow margin business. There’s no benefit to the Lexmark brand either. That brand is going to become stronger over the next decade, because the quality is already there. Lexmark simply hasn’t been that visible to consumers. The Dell deal doesn’t help build the Lexmark brand. Honestly, I wouldn’t be terribly troubled if Lexmark’s sales to Dell dropped to zero tomorrow. Such an occurrence would not materially affect my valuation of Lexmark.

As far as I can tell, Lexmark’s management is excellent. They understand the printer business better than anyone (they also happen to understand the science of printing better than anyone – CEO Paul Curlander has a PhD in electrical engineering from MIT). Lexmark’s management also sees highly profitable opportunities in printing long – term, despite a very competitive situation short – term. I agree with that assessment.

Within the printer business, there is a real danger of ferocious price competition. However, I do not believe there is a real danger of prolonged ferocious price competition. Lexmark is the company best positioned to weather the storm. It will generate tons of free cash flow, none of which has to be siphoned off to other lines of businesses, as it does at all of Lexmark’s competitors. Lexmark’s high free cash flow margin recurring revenue stream will supply it with more than enough ammunition to outlast its competitors. They may be deep pocketed, but eventually, they will have to answer to Wall Street. Long – term, they can’t compete with Lexmark. It will take them some time to realize that. But, Lexmark has the time.

That’s my assessment of Lexmark on qualitative grounds. How does the stock look quantitatively?

The stock is selling for about 15 times earnings and 10 times cash flow. Right now, a dollar of Lexmark’s stock buys you a dollar of sales. I think that’s a bargain. Not many companies of this caliber sell at a price – to – sales ratio of one.

For the last ten years, Lexmark’s return on equity has not fallen below 20%. During the same period, the company’s return on assets never fell below 10%. The free cash flow margin has generally been in the 5 – 10% range.

I wouldn’t be surprised to see Lexmark’s ROE and free cash flow fall substantially in the next few years. However, long – term, I believe a return on equity of 15 – 20% and a free cash flow margin of 8 – 10% are sustainable. In fact, if I was forced to pick an exact ROE that Lexmark could sustain I would pick 20%. But, I would also caution you not to expect that for the next five years or so.

The important estimate is the 8 – 10% free cash flow margin. That’s the best way to value Lexmark. At one times sales, you have an 8 – 10% yield, if you think sales can be sustained. If you think sales can grow, you have to factor that into your analysis. At present, a discount rate of 8% seems appropriate.

I never do a discounted free cash flow analysis on this blog, because I feel the variables that go into are something you have to decide on for yourself. I don’t want to slap an exact figure on the value of a company, because I don’t want to suggest that kind of precision. But here, you can clearly see how I’d value Lexmark. I gave you what I think Lexmark’s free cash flow margin will be (8-10%), you know what Lexmark’s sales are ($5.4 billion), and I gave you the discount rate I thought was most appropriate (8%). The only necessary variable I haven’t provided is a sales growth estimate, and I’m not going to provide that, because I don’t want you to think it has anything to do with the next five years.

It doesn’t. I’m looking at this company well beyond that point, and I like what I see. Lexmark will strengthen its brand (with consumers), and people will still be printing. So, yes, I am projecting revenue growth for Lexmark; and yes, it is enough to suggest Lexmark is worth substantially more than $5.5 billion.

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