Many firms benefit significantly from either setting up on their own or partnering with a third part to set up a customer financing program for their products. Key benefits are increased sales, cash flow, customer loyalty, etc.But are there also some risks for the company to be aware of also – Of course there are and let’s look at some of those risks.We would also point out that these risks are in fact the same ones taken on by independent leasing firms also.Foremost from a risk perspective is that fact the customer financing program will be viewed by the customers as the one and same as your company. Therefore customer service and financing ability are in fact now part of your firm’s reputation.Companies may also find that the borrowing costs to set up a program are in fact higher than their normal business operating costs. Naturally the method in which the finance division is set up also affects the debt levels of your company. No business wants to fail because it took on higher debt in an effort to in fact help their customers!On a long term basis company lenders might view your firms foray into customer financing as an additional risk factor, which they might try to compensate on by imposing restrictions such as additional covenants, requests for more equity into the firm, etc. The bottom line is simply that setting up a customer financing scenario may in fact affect your own firm’s ability to borrow.If your firm is larger then analysts and firms looking at your firm might in fact be raising issues and perceptions around which business you are actually in, i.e. your products, or the financing of those products. Business owners and financial managers will always want to ensure that ultimately they are sticking to their core business model and philosophies. If your firm becomes too enamored by financing you possibly run the risk of total business failure. There are numerous cases in financial history where firms collapsed because of the shenanigans of the finance division.We have heard the term in business ‘sticking to our knitting’, which of course simply means that management needs unique skills to run a business, and those skills are different in financing. Owners and managers related to the customer financing division must have strong skills in financial sales, structuring, and credit… Naturally we are also inferring that additional skilled personnel ultimately must be hired.No company every wants to look back in hindsight and say that if failed or stumbled because efforts and funds went into financing, as opposed to r&d, marketing, staff, and product growth. Do not let a customer finance program become an obstacle to your ultimate business successBusiness owners should ensure that there is good communications between the main operating company and the customer financing division – clear goals and philosophies should be set out re the function of such a customer finance program.In summary the benefits of offering financing to your customer are very obvious, and proven true by some of the largest and most successful companies in the world – but all you have to do is to do it right! Ensure your firm is aware of the risks and challenges and monitor your customer financing program on an ongoing basis to ensure you are not straying from your core business model.
The concept of home entertainment and indoor recreational activities changed when home electronics invaded our lives. One can say that access to numerous electronic products at home has revolutionized the idea of what constitutes a complete home entertainment. Nowadays, anyone can have immediate access to every kind of electronic entertainment via different media within the comforts of their homes. They can have their choice of entertainment which may range from the latest DVD players, radios to the wireless internet connection which offers them the convenience of mobility. Advancement in technology has gifted us with loads of home entertainment options ranging from radio, television, CD, DVD players, home theatre system, games consoles and so on.Music has always been one of the most preferred leisure activities. It found its way into our home through the long playing discs and the gramophone. Of course with the coming of radio a decade later made music a more widespread home entertainment. Before the advent of the CD or DVD player, the radio was the most popular home entertainment system available. Though there were some juke boxes available in the local pubs or salons where one could listen to a song of their choice at home there was only the radio. With radio, the choice of listening was however quite limited as people had to listen to the songs that the radio channels would play, even though some of the stations would at times play the selected numbers based on listeners’ requests. But there were no complaints as there wasn’t anything better for decades to come.Initially, when television had not yet become an everyday part of our lives, the visual entertainment strictly meant those theatres which had large screens to view a movie. Things changed dramatically with the invention of the television in the initial phase of the 1950s. The television was a complete wonder in the days when it was discovered. People did not have to restrict themselves anymore to music as their only entertainment at home. They could actually watch a full length movie in the comfort of their own home.Not only movies, this small wonder box started entertaining people with more and more new ideas, programs and techniques. Television has been considered as one of the pioneers in the history of home visual entertainment. Of course it provided more than just entertainment. With news and special documentaries, TV soon became the most important source of amusement. The long playing discs were also a part of home entertainment which was an early discovery. While radios, LPs and television made a permanent place in everyone’s home, the quality of sound in those times essentially required tremendous development.Good sound systems and speakers stared to develop in the mid 1970s. Various technologies were discovered to enhance the quality of sound. And with the music genres like rock, pop and discos coming into being, there was a specific and urgent requirement for good quality sound systems. Thus the electronic giants did not stop producing recorders and put more emphasis on amplifying and equalizing the sound to give it a new dimension.Good quality sound systems were specially designed and created for homes which produced outstanding music. Woofers and subwoofers along with various amplifiers equalizers and multi channel audio were being used to produce crisp stereophonic sounds.However, this concept took a back seat when CD and DVD players came into existence. During the end of the ’70s and early ’80s some of the electronic giants worked in collaboration to develop the world’s first Compact Disc system. Experts proved that this CD player was quite compact and lightweight with its unique durability. For music lovers it was truly a boon. At the same time this CD system opened a new window in the audio equipment industry.Compact discs were more durable than any other long playing discs or tapes. Thus the CDs removed all other music disc and tapes from the market and held prominent position. The 80s and early 90s saw a vast improvement in the technology of compact disc systems. It became very popular with people because of the crystal clear sound it produced and was affordable. These CDs not only stored music, it was versatile enough to store movies, data, pictures or even software.Along with CDs a much improved device which actually revolutionized and changed the entire system of home entertainment is the DVD or digital versatile discs. These discs are powerful and large enough to hold two movies in one. It stores data digitally and is more durable. The scratch proof technology of the DVD players also makes the DVDs last a long time. Both music and movie buffs felt delighted when the DVD player came into the market. Recent survey statistics reveal that the DVD player is the most successful product of home entertainment. It was introduced in the year 1997 and has reached great heights of success ever since.Nowadays, people can have the same effect of a movie theatre in their homes. With the latest DVD players, LCD screens and the sound systems with woofers, sub woofers and multi channel audio systems, anyone can have a fantastic home entertainment system with high quality sound and spectacular visual effects. The plasma and LCD screens are high resolution televisions which started to develop in the latter half of the 1990s and these sleek televisions enabled the viewers to experience digital sound and vision with fantastic picture quality and various advanced features.With the invention of DVDs and a major development in the visual media such as Plasma and Liquid Crystal Display or LCD in the late 90s gave home entertainment its latest technical dimension. With it, the meaning of home entertainment changed significantly with more and more people installing the home theatre systems with newest gadgets and technologies.