Effect of economic instability on startup companies

If you have been keeping track of the business world, then you have probably heard of startup companies. These are organizations that were made solely for exploring a new business model in the hope that success would come in a rapid form of boom. They are usually oriented towards technology and are relatively new. They have high risks but in return they could give very return of investments.

The idea for startup companies first emerged during the period of the dotcom bubble. That was the time when the internet rapidly became the darling of investors. It was the first time that the World Wide Web first came to the awareness of a lot of people and so the idea for it was an unknown quantity. Many companies saw their values rise just because they were connected with the internet somehow. But that bubble had to burst.

The dotcom bubble lasted from 1997 to 2000 but even though many companies that made a lot of money back them crashed, the idea of startup companies never left the consciousness of investors. It is still evident today. Investors and venture capital firms are on the lookout for young people with good technological ideas that are usually connected with the internet.

How it Works- It usually starts with a new idea, something fresh or revolutionary. These days it usually has something to do with computers or the internet, but anything connected with technology can do. If the idea is good enough its developers could get funding from investors or venture capital firms in order to start a company based on the idea, in exchange for the funding they would give shares of the company to the investor. Though investors are a lot more careful now, startup companies are still considered to be high risk. In exchange there is the potential for high returns.

How it Startups Are Affected by Economic Crisis- All companies have been affected by the global financial crisis. From the big ones to the small ones, everyone has felt the impact of this crisis. Startup companies such as One Flare are having a harder time because of it.  These are the companies that have not proven themselves yet. So investors would doubly wary in times of crisis about placing their money where they might not get it back. Some people who might have invested in startups in normal times would be thinking twice now about placing their money in something unproven.

Companies That Are Adapting

However, not all startup companies are suffering from the effects of the GFC. Reeves’ Jameson, founder of The Gold IRA Reviewer has adapted his business to embrace the changes and is now riding high by providing investors with unbiased and honest reviews of gold ira companies. Reeves found a demand for up-to-date and accurate information about how to diversify existing retirement accounts by investing in physical gold – something that many retirees are now becoming increasingly interested in. Reeves’ gold IRA reviews site covers all aspects of precious metals investing, particularly an overview of the important gold ira rules and other restrictions that the IRS has placed on this type of investing.

Rising fuel cost effect on economy

Most of modern civilization is dependent on fuel and petroleum.  That is why many people consider the internal combustion engine to be one of the greatest inventions of all time. Oil and petroleum is one of the commodities in the world that has so much impact not just on global economy, but politics, foreign relations and peace and stability. Nations have risen to the fore front of the world because of petroleum, while others have fallen and become mired in chaos because of it as well.

Petroleum is a limited resource and experts are predicting that at the current rate of consumption, we would only have a few more years to enjoy it before it completely runs out. That’s partly to blame for the rising prices of oil in the world market today. This increase in price has many effects on the economies of different countries.

Just to illustrate how rising fuel costs can impact the economy, we have listed here the main things that are affected when the cost of oil goes up:

Consumer Spending- When the cost of fuel goes up, it eats up more of your budget. That means you have less money that you can use for the other things that you need. The problem is that most people would have no recourse but to shell out the extra cash. They can’t mothball their car, so they just have to bear the brunt of the rising cost of fuel which is a shame.

Car Buyers Go for More Fuel Efficient Models from Asian Manufacturers- It’s a known fact that Asian car makers are better at making more fuel efficient vehicles. That has always been their main selling point in the past. In times when the price of fuel is bound to go up, not down, we would be seeing more of these models being sold today.

Carmakers Cutback- One of the major negative effects of rising oil prices is how automakers are forced to cut down on their costs. Since few people would be buying cars, the companies need to cut their overhead as well. The first thing that they do is to cut down on the number of employees that they have.

Prices Go Up- Since fuel is used in manufacturing, in transporting and various aspects of all the industries, a rise in their prices would eventually mean that the cost of services and products would go up as well.  That way everyone feels the crunch.

GFC effect on local businesses

We’re still feeling its effects today and it has caused so much trouble. I’m talking about the Global Financial Crisis that has left no one untouched. So many people lost their money because of it and a lot are still reeling under its blow. Experts see it as the worst financial crisis to have rocked the world since the Great Depression of the 1930s and we are still to recover from it.

How it All Began- It all started when the housing bubble of the United States burst. The housing industry there has been expanding since the 1980s and the problem is that the housing boom was fuelled by debt backed consumption. It’s a complicated process but it would be enough to say that it was a disaster waiting to happen.

Soon the crisis affected the banking system of the United States and after from there it spread to the rest of the world. The United States and Europe are the worst hit in the crisis, but no country was left untouched. Even Australia has felt the effects of the crisis and it has caused many local businesses to alter their operations because of it.

Effect on Local Businesses- Some people might feel that the crisis really does not concern them, as it is something that would only have an effect on large businesses. Statistics show that before the crisis hit, there were more than 520,000 small businesses in Australia that employed anywhere from one to four workers. Statistics gathered from last year however has revealed that more than 30,000 of these businesses have closed shop since then. That means more than 120,000 people lost their jobs because of the crisis, many of these people are cleaners.

One of the major reasons for the closing of many small enterprises is the fact that it is more difficult to get loans today than ever before. Most of them rely on borrowed money in order to expand and in more difficult times to keep their operations open. Inability to get those loans means that the business will be forced to close down eventually. Another reason cited is the red tape. Many small business owners are accusing the government of making things a lot more difficult for them.

That’s how the financial crisis has impacted the small businesses in your area. You might have even noticed some of them closing shop.

AUD vs USD

The AUD or the Australian dollar is the currency in Australia. It is the third most traded currency in the world today. It has remained popular with foreign currency investors all over the world because of the high interest rates in Australia as compared with other countries, which means that they could earn more profits from it than any other currency.

History- The Australian dollar could trace its beginning back in 1966. That was when the government of Australia decided to leave the old currency system of pounds which is a drawback from the time that it was a colony of England and take up a currency that is based on the decimal system.

There were many suggestions for a naming the new currency. Most of them reflected the pride that Australians have for their country. Some of the suggested names include the austral, the boomer, the oz, the digger, the emu, the kanga and even the ming, which was the nickname of the then Prime Minister Sir Robert Menzies. The Prime Minister himself preferred that the new currency be called the royal. He was a staunch royalist, and that was the name that was chosen. The choice proved to be unpopular though and pretty soon that was dropped. They settled for calling the currency as the dollar and that’s how Australians refer to it. In other countries, it is known as the Australian dollar or the AUD in order to distinguish it from the other currencies that have the same name. The Autralian dollar has come a long way since it was first introduced in 1966 and a lot has changed since then.

AUD vs USD- When the Australian dollar was first used, the relationships and exchange of the currencies of the different countries in the world were determined by the Bretton Woods system. That was an exchange rate system that used the American dollar as a standard. During that period the value of Australian dollar was fixed with that of the British pound.

1983 marked a major change in the history of the Australian dollar. In that year the value of the currency was allowed to fluctuate depending on the supply and demand on the market. In the years since the value of the AUD has reached $1.1080 which is the highest so far. It is speculated that the value of the currency could reach as high as $1.7 in the next few years.