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Stock Investing for Small Business Owners

Small business owners relish the potential to earn a great deal of money running their enterprises. Budding entrepreneurs should be aware one positive thing. The wealth amassed from owning a small business isn’t contingent on earning massive profits each year. Consistently saving and investing profits — even modest ones — every year might build up the business’ value and the owner’s net worth significantly.

 

The Corporate Strategy

Often, what works for large corporations also works for small businesses. The approaches may be scaled down a little, but the overall strategies remain the same. One strategy involves taking profits and investing the money. This creates added valuation to the business while hedging against losses related to expenditures. The insurance industry presents an example of this strategy as interest on investments may offset payments on settled claims. A small business tracking its finances with a netsuite alternative could do the same thing.

 

Of course, a small business owner must be smart about choosing an investment strategy. By relying on safe investments, a small business owner might find his/her profits growing in a safe place.

 

Long-Term and Low-Risk

Putting a set percentage of revenue into aggressive, risky endeavors aren’t automatically bad ones. Long-term investments — even risky ones — might prove profitable. That said, would you really want to put a significant amount of business profits into risky vehicles? Lower-risk investments safeguards cash and allow the money to grow. A major corporation in dire need of building up capital could seek high-yield municipal bonds offer ing6% returns. These bonds, however, come with the looming risk of default. A treasury bond pays far less than 6%, but the odds of default aren’t exactly high.

 

Generally, long-term and low-risk investment strategies benefit the small business owner. Less risk has its rewards.

 

Diversify Assets

Certain approaches can undermine low-risk investments. For example, putting too much money into any single investment vehicle can turn low-risk investments into potentially higher-risk ones. Imagine if all of a business’ cash reserves were put into the stock market and the market crashed. For all intents and purposes, the business crashes with the market.

 

Savvy investors wouldn’t likely create a personal portfolio completely lacking in diversity. The same logical attitude frequently applies when investing a small business’ funds. Diversity the portfolio to reduce risk while allowing money to grow in different ways.

 

Match Approaches to Business and Investing

Matching business strategies and goals to your investment strategies and goals makes sense. That is, if you seek moderate growth in your business’ profits, think about seeking the same level of growth with the investments. It would be an odd strategy to try and grow a business carefully and then take the capital and put it into an aggressive growth venture known for occasionally serious losses. If you’re conservative with your business, then you likely would be more comfortable as an equally conservative investor.

 

Don’t Allow Trading Fees to Cut into Profits

In order to buy stocks, bonds, mutual funds, and other assets, you must purchase from a broker. Brokers do need to make money for their services. Paying fees may be unavoidable, but you can cut down on the amount of money spent on trades. Before you sign up with any brokerage service, closely examine all the fees associated with the service. Seek out a reputable broker who provides reasonable fees that won’t cut into your initial buy too much.

 

Stay on Top of Taxes

Investments may come with tax obligations. Certain investments do fall under the category of nontaxable income, but this isn’t the case all the time. Taxes might need to be paid on dividends and capital gains. Keep all 1099s related to all investments because they will be needed at tax time. Failure to report any taxable income, even due to an honest omission, could lead to an audit or fines.

 

In short, be as careful with your investments as you are with your business. Make the two work together well contribute to improving your financial standing.

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Investment Tips before Investing In Private Companies

Investors seeking to invest in private companies will admit that it is not an easy decision, owing to the risks involved, long-term investments and liquidity issues. Whether you are investing in a private company for the first time or you have invested in over 100 companies, it pays to learn the basics so that you don’t make mistakes. For starters, you need to understand what you want to gain from the investment, but don’t primarily focus on making money. Investors seeking to invest in companies should pursue projects that they are familiar with, have a passion for, and have background knowledge on so that they can easily make more money. Besides, investors should also consider these other things before investing in companies.

 

Have diversified strategies

You are not likely to be a successful investor if you put all your money in only three or four companies. Studies reveal that successful private investors invest in between seven to ten companies. In fact, angel investors have about nine years of experience, and they have an average of one investment per year. Therefore, you should identify the amount of money you plan to allocate to that class so that you can diversify your investments to increase success odds and reduce risks.

 

Talk to customers

You need to get more customer data so that you make the right investment decision. In fact, you should talk to not less than five customers who use the service or product. It will enable you to understand from the first-hand users of products or services the void that the brand fills as well as what they like about it. When talking to them, find out if there is an alternative product or service that they would use in place of the product or service. You should find out if they would still use the brand if competitors drop the prices, why they would or would not consider using another product so that you can gauge their loyalty to your product. Most importantly, find out from the customers if they can refer other people to use the product. Investors should pay attention to the kind of customers that the company has, and they can feel safe if the customers promote the product.

 

Know the exit strategy

You should understand the exit scenarios of the sector that you want. Consider how big the company needs to be and the margins so that it can go public or have an attractive acquisition target. Also, you should understand the options available to you as the investor when buying or selling specific underlying equity. Investors can be a short or long put strategy based on the rights to sell the specific investment.

 

Talk to an expert

Investors should talk to experts in the sector that they have interest in, to get advice on various issues such as the viability of the industry. You can look for financial experts in that sector rather than in other sectors because the later might not be knowledgeable in your business of interest. Also, you should ensure that you talk to an attorney so that you know legal requirements such as legal documents when investing in private companies. Let your lawyer see all the documents to get feedback. Investors should understand their lawyer’s points even if they don’t care about them.

 

Know the deal

Investors should know how the deal structure and the company’s valuation stack up against other companies in the sector. They need to consider the valuation relative to other companies depending on several factors such as growth rate, capital structure, revenue, risk profile, and net income. You should avoid companies with a high valuation.

 

Understand the business

Investors should invest in what they know, which means that they should use their products or services before they invest in the industry. An investor who understands a business has more confidence in the investment than one who doesn’t know about the company. Besides, you cannot invest in a tech business when you don’t have a tech background. You should understand tech trends and how technology is affecting various industries among other pressing issues before you invest in the tech business.

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What to Expect In the Insurance Market In 2018

Insurance happens to be one of the costs of the most significant project in the running of any business enterprise. When you total up life insurance, benefits for employees, worker’s compensation, premiums for commercial auto insurance, general liability and property insurance you will realize that it roughly 5% of the total revenue generated in a particular financial year or more. All these insurance incentives are just the direct costs involved. If you consider indirect costs, you will notice that this number may inflate by more than 100%. It is critical for any business owner or manager to know how to manage these costs proactively due to their magnitude and also project on the costs as we get into the first fiscal quarter of 2018.

The only way to minimize the seriousness of claims and expenses involved in risks for long-term is to ensure that you have detailed documentation of the insurance policies that your business cannot run without by law or otherwise. However, in the immediate and near future, small and medium-sized business enterprises will also be affected by the insurance market as premiums continue to hike. In this article, we are going to offer some insight into the current situation of our insurance industry and how the current underwriting objectives and finances will affect your company in 2018.

The current trends in the insurance sector

The return on the industry’s net worth was considerably reduced in the worst financial crisis that has been experienced in the 21st century in the years between 2008 and 2012. This was as a result of the combination the reduced level of returns on investment and a combined ratio that was somehow lousy. This was as a result of the fact that most of the insurance firm’s portfolio is invested in debts as companies can only invest about a fifth of their revenue in equities.

For the insurance industry to continue to grow, it will need to attract surplus capital in the coming fiscal year. The industry needs to earn about 10% returns or more for it to achieve surplus capital. Underwriters will always push an effort to push for increased rates regarding insurance policies whenever the returns on investment deteriorate as we experienced in the financial crisis of 2008.

The insurance sector performed well in the years between 2013 and 2015 but not to the expectations of many. Insurance companies generated modest profits, but the overall returns on investment were decent. In this period, the cost of insurance premiums stagnated but after some time started to have a downward trend.

Allied lines

The term allied lines include such things as an umbrella, auto insurance, general liability and property insurance. The premiums charged for the policies of these lines should remain relatively flat except auto insurance premiums. However, this will not mean that insurance companies will not charge a modest increase in the allied lines premiums. The rise in rates can in most cases be negotiated by the policyholders and the insurance company.

In recent years, we have seen the deterioration of the auto experience, and there are estimations that State Farm in their 2016 auto book lost over $7 billion. The results are deteriorating majorly due to the increased severity of claims and an increase the cases of distracted driving. For instance, the cost of repairing a camera-laden bumper or a sensor has increased significantly as compared to what insurance companies used to pay ten years ago.

Executive risk

The things that are involved in operational risk include Fiduciary Liability, employment practices liability and directors and officers (D&O) liability. The last financial crisis signaled a warning to the insurance industry that the coverage of these obligations is quite expensive. For instance, every form has taken a different approach, and there have emerged some players who may be out of the playing field in the next five years just like in professional liability. However, it is expected in 2018 that the renewal terms will on average be flat with some rate relief opportunities.

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How Blockchain Can Transform the Economy

The blockchain is enabling people all over the world exchange funds with complete trust. It is a good thing and a welcome move wherein a global economy with over two billion people who can’t access a bank account. The World Bank and other government agencies discussed how governments can help their citizens adapt to relentless technological and social change. This move was encouraged during the World Government Summit February this year in Dubai. For the first time, blockchain has offered a new digital medium where anyone can access anything that holds value. Blockchain enables you to access stocks, money, bonds, deeds, title and digital property. The platform has also made it possible to move votes and even identify and manage it privately and securely.

Blockchain’s Rise in Popularity

Blockchain was launched in 2011 and has grown exponentially to become one of the most trusted companies that offer bitcoin services. Blockchain has developed to become the most popular platform through which people can exchange digital money in the world otherwise known as Bitcoin wallet. Blockchain has also provided applets used to build new Bitcoin software by other developers. People can also exchange digital money without knowing each other using Blockchain. The need for intermediaries such as PayPal and banks are also eliminated.

How Blockchain Works

Unlike other platforms where trust is established using a third party, blockchain ensures confidence through a mass consensus and a clever code using a network. This method of establishing trust has huge implications for businesses, intermediaries and the entire society. Blockchain has had an impact on trade, financial services, technology companies, and intermediaries. All these institutions have had an impact on our personal lives from how we interact on social media platforms, hail a cab from online cab services or even search for information on Google.

As of today, Blockchain has given away most of its products including a three million digital wallets. Blockchain gets revenue from ads on its site. The company completed a Series A funding round worth over $300 million. The funding round included investors such as Lightspeed Venture Partners from Silicon Valley and the London-based Mosaic Ventures billionaire, Richard Branson. Multiple applications depend on blockchain technology from transportation, employment, and banking.

The Internet of Things

There is a link between the Internet of things (IoT) and blockchain. One of the unique developments is that it has transformed what was previously known as qualitative phenomena into quantitative measurements. A Blockchain powered IoT can verify and track device history while at the same time give the device some degree of autonomy. This feature ensures that the devices can make numerous different transactions independently. Similar to the capabilities of big data, as explained in resources such as an Apache Kafka Tutorial, Blockchain’s transformative potential will only increase when we learn to interpret quantitative objects and their subjectivity.

Audit and Accounting

In the world of accounting, audit firms rely on costly audits to make a profit. Accounting is dependent on double-entry where you either record a debit or credit for any transactions. Blockchain brings the possibility of a third entry which is time stamped in a distributed ledger. The ledger may be acceptable to any of the stakeholders involved. These stakeholders include shareholders and regulators. This incentive will give a complete truth and a perfect record that improves the general health of the company.

Government and Policy

Blockchain can also positively transform government and democracy. Governments can use the blockchain platform to enable self-organization in civil society organizations, agencies, companies, and individual citizens. Moreover, politicians could be elected into office with a smart contract that outlines what they will do during their tenure. Blockchain, through this smart contract, could ensure that the officials are not paid unless they fulfill certain obligations to the electorate and not the lobbies who funded their campaigns. Citizens can confirm that their vote was cast in the blockchain powered voting system in a completely private way. This will eliminate the traditional server technology that voters have little faith in.

Whether or not blockchain will redeem its promises and live up to expectations is a question that only time can answer. However, incentives by individuals, institutions, and governments to move from the traditionally based systems onto blockchain based will be a step forward.

 

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5 Ways Businesses Affect Local Economies

Driving through a neighborhood, you likely notice all of the businesses, and you may even stop in at a few. However, that doesn’t mean you necessarily recognize how businesses affect local economies. Examining this issue is important because it could help you to make your own neighborhood a better place to live one day.

 

Creation of Jobs

One of the biggest ways that businesses affect local economies is by creating jobs. Bringing more businesses into an area could help the community to entirely reinvent itself. For example, if the neighborhood is experiencing issues with poverty, that could be due to a lack of employment for the residents. Once the businesses open up, residents can start to procure jobs at the businesses. When businesses place an emphasis on hiring employees from the neighborhoods in which they open, they contribute even more to this element.

 

Increased Home Values

The value of a house does have to do with its layout and space, but it also has to do with the community. When prospective buyers drive through a neighborhood and see that it doesn’t have any businesses, they may be unlikely to make an offer on houses there. People want to live near the shops that they need. Therefore, new businesses can help the prices of homes to go up. When the price of houses increases, so does the general wealth of the individuals who live in the neighborhood. The rise of businesses in communities can help a community see a higher average level of income among its residents.

 

Business Prosperity

New businesses in the area can also actually help current businesses. Some communities have spotty areas of businesses. Building up the area around those companies can help attract more attention to them. Since people are shopping at the other stores, they might finally notice or feel inclined to visit the ones that have been there for years or decades. Some business owners might have trepidation about new entities coming into the community, but they can actually end up helping them up.

 

Better Schools

It might seem striking that businesses in an area could have to do with the schools, but the connection is present. Many depressed areas of the country also face problems with the schools. The academics are poor, and the schools may have major troubles with violence or drugs. Part of the reason could be that the students are stuck in the cycle of poverty. They may have to miss school in order to work or to take care of siblings; they may not have the money to attend college. When new jobs open up in the area, they can start to take advantage of them, and they may see a brighter future ahead. These youngsters may then go on to attend college, procure high paying jobs themselves, return to their communities and transmute them into the best places to live in New Jersey.

 

Tourism

When a community gets a new business, it might become an attractive for tourists. People who are just passing through the area or on their way to vacation might stop at the business. Depending upon where the community is located, the new businesses might help it to become a major destination for tourism. For example, the neighborhood might lie at the border of one of the states, so it could turn from an area filled with poverty to one that acts as a welcome center for visitors. Tourism in a community can definitely help to stimulate the economy because people tend to spend significant amounts of money when they are on vacation.

Most people know that businesses have some sort of connection to the local economy, but they don’t think about this connection that much. Instead, they focus on how the business can serve them in the immediate future. Looking at this sole view of business is not necessarily helpful. When new businesses are proposed in the community, consider the ways that they could better the neighborhood. You might be asked to vote for the new business or to propose ways to make the businesses in the community even better. Recognize how these companies can help to change so many elements of the place where you live.

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Lack of Startups is Taking its Toll on the US Economy

The United States economy is still as of now lagging behind, with millions of Americans locked out of this labor market in the country. One of the key factors in all of this is that the U.S. is producing fewer and fewer startups.

In order to truly innovate and deliver novel experiences for customers, this country needs a healthy balance of large, established companies as well as startups that allow for innovation and develop truly revolutionary experiences. In this article, we’re going to take a look at the lack of startups in this country and how this is taking a toll on the economy in the United States. In the process, hopefully we can figure out how to solve this problem.

The dearth of startups

It’s no secret that this country has seen a marked decrease in the amount of startups that are starting up in this country. Even sports betting sites which usually flourish are on the decline.

This decline is an important factor in the overall productivity slump that’s been going on for well over a decade now.

The number of employees who are at companies that are less than five years old has likewise slumped to 9.1 percent of the overall workforce back in 2013. That’s about half the share during the peak back in 1987. Experts have said that while there is new data available, it doesn’t exactly bode well for startup numbers in the modern day.

The lack of productivity growth is going to become more and more important as the labor market tightens up and growth starts to increase. Some experts even believe that low productivity might create faster increases of interest rates. The startup deficit, according to experts, slows down the shift from less productive startups to bigger, stronger ones.

Lagging behind

There was a definite startup decline after 2000, but experts are still not aware of what might have caused that. In way of contrast, the startups that our country had in the 1980s and 1990s were an important component of productivity as a whole.

It’s been cited that low productivity can lead to a lack in living standards, and the 2007-2009 recession has been cited as one of the major causes of all of this. This may have hurt research as well as overall investment in startups as a whole.

Around 400,000 businesses are started each year, with a large percentage of them never getting beyond the first five years. A typical firm will employ nine employees by its fifth year, which is a definite lag in the amount of employees that are employed.

The reasons

The reasons for the decline are numerous. Entrepreneurs might have less access to potential capital, with little ability to look at home equity since the housing market collapsed during the recession.

Some lenders have also tightened requirements for all small business loans. Along with this, millennials have been struck by large amounts of student debt. All of this will make them less likely to invest in a new startup.

Simply put, people are not taking risks in this economy the way they used to. Many might feel like it’s not worth it to take the gamble, as financial situations in this country have been difficult for some time.

While this list isn’t exhaustive, it should give you an idea as to how startups are declining and why this is taking its toll on the United States economy. It’s very important to keep an eye on these things, as our economy really hinges on the ability of startups to change things and innovate constantly.

It’s always been the American way to pioneer and innovate, constantly focusing on improvement and success. We’ve been seeing a shift, however, for the last couple of years where entrepreneurs are less and less likely to be starting up their own small business. These numbers will change over time, though, so it’s important to keep an eye on them.

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Commodities That Affect USA’s Economy

It might seem like money is the ruler of the world, and in some sense it truly is the most powerful commodity on the planet, but in reality those currencies are nothing more than mere value placeholders as value is transferred from person to person or entity to entity. Value is really exchanged through true physical commodities, like precious metals, foodstuffs, and processed products. As those items exchange hands on their way from collection to distribution to end-use, trails of value are left in their wake, and those transactions are the backbone of any economy. In this way, commodities can directly affect the economy of just about any country in the world, especially more powerful countries that inevitably deal with a large number of commodities. The United States of America isn’t immune to this truth, and there are a number of premium commodities that have a huge impact on the strength of the United States’ economy.

Oil

It’s impossible to deny the impact that oil has on the American economy. The demand for the substance hasn’t faltered since it became the driving force behind many areas of global industrialization, like gasoline for transportation, fertilizers for agriculture, and plastics for the manufacturing industries. So many areas of the American economy require oil that even slight changes in the price of raw crude can send ripples through the otherwise stable system, especially the volatile transportation industry that requires a constant influx of fuel.

Cattle

The United States consumes an incredible amount of meat, primarily in the form of beef. Americans ate roughly 71.2 pounds of beef per person during 2012, and while that number seems to be decreasing slightly, it is still far more than most other countries consume. The United States produces beef for both domestic and foreign customers, and many countries like Canada, Mexico, and Japan create a huge demand for American beef, driving the economy for thousands of farmers across the midwest.

Tobacco

While tobacco isn’t as valuable to America as it once was in the past, the crop is still a major contributing factor to the vitality of the economy. Cigarettes might be decreasing in popularity in response to new electronic cigarettes and vape pens flooding the market, but the nicotine found in those products still has to be cultivated and extracted from tobacco plants. Since the vape industry is expected to be valued at over $50 billion by 2025, it’s easy to see how tobacco is going to continue to be an important aspect of America’s economy long after standard cigarettes have gone extinct. Many cigarette smokers have already moved on with either a vape pen starter kit or something similar in order to make the transition as smooth as possible.

Corn

Unlike other grain products, corn is used in so many different industries that it might be the most valuable food crop grown in the country. The crop is used for producing feed for cattle, natural food for human consumption, corn syrups and other processed food derivatives, and even fuels like ethanol. Corn is so vital to the economy of the United States that the sudden loss of the crop would force the economy to come to a screeching halt. The United States is responsible for roughly 40 percent of the entire world’s corn trade, and such a high market share translates to a huge affect on the overall US economy.

In truth, every commodity traded or used within the United States is going to have some sort of effect on the economy, but the commodities listed here represent the largest areas of economic control and strength for the United States. Without these sources of value creation, the United States would not be in the position that is enjoys within the world stage. As long as the world’s economy keeps turning, the United States will stay afloat on these staples.

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How Professional Teams Benefit the Economy of Cities They Play In

There is much made about how much teams ask of taxpayers in the cities that they are in. While the owners are millionaires or billionaires, they still ask the city where they play to put up money to help build a stadium or ask to split revenues from the stadium others have paid for. However, professional teams are still in high demand because of what they do for the local economy. What are some of the specific impacts?

The City Gets a Boost in Prestige

In general, a city that has a professional team is thought higher of then cities that don’t have sports teams. In some cases, the sports teams may be one of the few attractions of the area. For instance, without the Sabres or the Bills, Buffalo is just another city in upstate New York. Without the Packers, Green Bay is just another small city in the middle of the country.

Stadiums Can Often Be Used for Many Purposes

While a stadium may be built specifically for a baseball team or a basketball team, those stadiums aren’t used throughout the year. If a team plays in the NFL, it may only be used for 10 dates the entire year when you include preseason and regular season games. When the stadiums aren’t be used by their main tenants, they can be used to host conventions, concerts and other large events. They may also be used to lure major events such as the Olympics or other national or regional competitions.

Bars and Restaurants Near the Stadium Make Money on Game Day

In more urban areas, it may not be possible to tailgate in the stadium parking lot before the game. This means that people have to grab a beer or dinner before the game at a bar or restaurant near the stadium or arena. After the game, those same people may decide to stick around for another drink or to kill time before they are good enough to drive home. For those who work at these establishments, they may see more tips while the business owners will see increased revenues. The city benefits because they see more tax revenue from the businesses that make that money.

The Team May Create Hundreds of Jobs

When a team comes to town, they will have a wide variety of positions that need to be filled. For example, someone will be needed to take tickets, sell hot dogs or park cars in a proper manner. There will also be a need for people in the sales and marketing departments as well as security personnel to keep people safe during the game or during any other event at the stadium or arena.

The Team May Spur Employment in Other Ways as Well

Before a new team can start play, it will need a new stadium or upgrades to a current stadium. That means construction jobs that pay well and will last for several months or years. Employers around the stadium will also need to hire more workers during the season as more people come to shop, eat or otherwise spend money in town. If a town has a casino or is otherwise known as a gambling town, people may decide to spend money as an alternate to sports betting sites or in addition to bets made online.

If your city is about to get a new professional sports team, it may be something to celebrate whether you are a fan or not. In a worst case scenario, you may be able to find a job, benefit from increased public services or feel better about living in a city that is known on a national level thanks to money derived from that team.

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How Fantasy Sports are Changing the Face of the Economy

What are Fantasy Sports Anyway?

Fantasy sports used to be a simple betting game among sports fans and friends to see who had the most insight into the art and science of the games. A group of guys would get together, watch their favorite teams, and then make good natured bets on the outcomes of not just specific teams but individual players. However, with the introduction of the internet, the game of fantasy sports has changed drastically. Basic strategies include following sports teams and their players carefully in order to increase the odds of picking the best players. If an online fantasy sports fan wants to play fantasy basketball, he would probably spend a little time researching the NBA odds of certain players doing well in upcoming games and make his fantasy team picks accordingly. 

Online, Offline – Is There a Difference?

Online fantasy sports participants combine real players into a virtual fantasy team. These teams are then ranked based on their performances, and the performances of the players within them. The statistics of each game are compiled into points which are then calculated into real cash earnings. The difference between fantasy sports at home and those online is that players can compete against anyone else who is using the same site.

So Who Exactly Plays Fantasy Sports?

Online fantasy sports have fans from all walks of life. Whereas traditional games were typically played by a group of guy friends, the individual nature of the internet presents opportunities for anyone with a computer to participate. Statistics of the top fantasy sports sites indicate that although the majority of users are middle aged men, an increasing number of women, and elderly users have begun to not only just play, but win!

This Can’t Really Affect the Economy, Can it?

Online fantasy sports were one of the fastest rising industries of 2015 with more than 50 million active players using the sites. The most popular sites of the year, FanDuel and DraftKings both saw increases of over 40% of their revenue with the use of successful marketing campaigns which included both online and television commercials using real player testimonials.
Even someone who has no interest in fantasy sports has the opportunity to get in on the action. Many online fantasy sports companies are public, which means anyone can buy and sell their stocks for a profit. This means that anyone who participates in the stock market, regardless of their ability to play fantasy sports can benefit from this booming business.

The Real Stats

The Fantasy Sports Trade Association estimates that 56.8 million people in the U.S. and Canada played fantasy sports in 2015. This number is expected to increase by at least 15% in the next year as emerging companies begin to attract more fans.
Eilers Research is a self-described boutique research firm focused on servicing the gaming equipment, technology, and interactive gaming sectors within the global gaming industry. In 2015 they rocked leading economists worlds by projecting that daily fantasy games would be generating around $2.6 billion in entry fees this year, a statistic that later proved accurate. This is nothing compared to their projected increase of 41% annually, which indicates that online fantasy sports companies will earn around $14.4 billion in the year 2020. That’s the equivalent of earning $2 dollars for every human being currently living on earth.

So What Does This All Mean?

What was once a novelty designated to water cooler conversations or a night in with the guys has become a veritable cash cow. New formats are being invented daily to keep fans guessing and to improve the chances of winning big. With existing companies exceeding all the experts’ financial projections and new companies on the rise with intent to go even further, online fantasy sports are proving to be not only a big business, but one that is booming! Fantasy sports are here to stay.

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College Football Playoffs Have Mixed Results

Ever since the NCAA decided to add a playoff system to college football in 2014, there has been countless debate as to whether the new system is working. In some ways, the new playoff format is an unprecedented success. It allows two additional teams a chance at championship immortality.

On the other hand, some dislike the new committee that has such a large hand in determining the playoff participants. Here are some of the pros and cons of the new college football playoff system.

Great For the Fans

Nobody can deny that a college football playoff is a great idea from a fan perspective. The new system has turned games such as the Rose Bowl and Cotton Bowlinto must watch television. While these games have always held a special place in the hearts of college football fans from a nostalgic point of view, they have never been proving grounds in which the victor earns a trip to the national championship game. At least not until now.

Turning nostalgic bowl games into something much bigger is a win win for college football and its dedicated legions of die hard fans. The new playoff system definitely provides a solid platform for can’t miss games, which should make fans across the country hungry with anticipation.

Selection Committees

Before the new system’s introduction in 2014, college football had always operated with a ranking system comprising the votes of coaches and writers specializing in the college game. Since that time however, a selection committee comprised of a mash-up of coaches, writers, ex-players, politicians, and athletic directors has decided the fates of top college teams.

Vegas and Fantasy Sports

It’s no secret that people across the country love to gamble on sports, especially when that sport is football. Bonus points if that sport is college football. In recent years, major media outlets such as ESPN have started incorporating information relevant to those in gambling circles. This information ranges from point spreads to daily fantasy statistics. It can be argued that at least some of these changes have been influenced by the popularity of the new system. When compared with NBA odds predictions, college football comes out way ahead.

The playoff has also served as a commercial for daily fantasy players. Sites like FanDuel and DraftKings have tons of tournaments dedicated to playoff weekend each year.With millions of dollars changing hands in these tournaments, the playoff’s impact on the gambling front can definitely be seen and felt.

Ratings

While the idea of multiple college playoff games on the same day seems enticing, people seemed to have other things to do on New Years Eve this year. The Orange Bowl, the first game of the day featuring Clemson and Oklahoma, received ratings 38.5 percent lower than the previous season’s Rose Bowl. The second game, a clash between Michigan State and Alabama in the Cotton Bowl, resulted in a ratings drop of 36.8 percent.

The previous season’s playoff games were held on New Years Day instead of New Years Eve , which resulted in much higher ratings. The playoff system may have generally been a big step in the right direction for college football, but the selection committee’s decision to feature the games on this date was most definitely not in the best interest of the sport or its fans.

The new playoff format implemented by the NCAA has had a massive impact on college football. It has created a refreshing new wrinkle by giving two extra teams a chance at a nation championship. It has also enhanced NCAA odds betting interest and provided even more excitement to millions of fans.

Unfortunately, a controversial selection committee making controversial decisions has kept the new system from being a slam dunk success. Only time will tell if the new playoff system will endure.

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