What is a Monopoly?

Everyone's heard of the term monopoly, even if only in the context of the popular board game. Most people have negative feelings about the term, but might not know why. And while many people know what a monopoly is, many more do not, even though they can be greatly affected by such a condition.

Put simply, a monopoly exists when one company or individual controls a type of good or service to the point where they can affect the access consumers have to it. That is, one source is able to control how people get a product or service, and can determine how much it costs and how available it is, since there is no competition for the goods.

One of the most famous examples of monopolies in US history is Standard Oil. Standard Oil was founded and run by John D. Rockefeller, America's first billionaire, and the company effectively controlled petroleum in the United States for decades.

While the US is a capitalist country and therefore favors free trade, there are laws in place to protect consumers from the predatory practices of monopolies. While large market shares do not necessarily indicate monopolies, and monopolies are not, strictly speaking, illegal, taking unfair advantage of the situation is. If a company is exhibiting abusive behavior, they could be running the risk of being brought into court for having an illegal monopoly. In general, abusive behavior can be categorized as the following:

• Predatory pricing, or selling the product or service at such a low price that other companies cannot afford to compete
• Limiting the supply of the goods or service, to drive up price
• Refusal to deal, or limiting who can buy the product or service
• Tying products, or forcing consumers to buy one product in order to have access to another, distinct product

If a company or individual is abusing the power of their monopoly, the US government may step in to protect consumers. In the case of Standard Oil, the company was forced to dissolve itself into several smaller companies to ensure that there was competition in the marketplace, thus allowing consumers a choice and preventing one company from controlling the price and distribution of much-needed oil. Some of the companies formed out of Standard Oil still exist, namely ExxonMobil and Chevron.

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Tips to Build a Successful Consulting Engineering Firm

Many of these firms know who their paymasters are. They had been able to develop very excellent working relationship with their clients that make them kept returning with more assignments. Even though they have excellent working relationships, they always clarify the scopes of works required right from the beginning of the project.

This is very important as many clients have high expectation towards their consulting engineers. It is alright to be frank with them as to what you could or could not do. If certain projects or assignments are beyond your capability, you should acknowledge your own shortcomings and advice them to employ other experts. Many said that "honesty is the best policy", and this advice still stands today.

You may end up losing the project to another engineering consultant firm, but it is still better than to secure the job but unable to perform. Many customers appreciate your frankness and openness and would likely return to you for other projects. You also avoid the risk of being entangled in law suit filed by the client.

When you first submit your proposal to a potential client, be as clear as possible about your scopes of work. You should always be affirmative in describing to the client on why he should engage you instead of other engineers. Present clearly the benefits of engaging you versus the cost.

Some consulting engineers also committed the mistakes of spending too much time trying to convince a prospect client. However, there are no fixed rules on how much effort you should spend. Just stick to your business sense and let your intuition guide you.

There are also many engineers who established their own consulting engineering firm thinking that they no longer need to work for somebody else. This is wrong. In fact, instead of just working for one boss previously, you will now have many "bosses" as all your clients are your paymasters.

You may need to work twice as hard but always bear in mind that whatever effort that you have put into your own firm, one day you will enjoy the fruit of your own labour. It may take many years before you can see your business prosper, but the satisfaction gained from building an enterprise by itself is already a satisfying process.

Practicing engineering consultancy is a lifelong process and you should constantly upgrade yourself. This is called continuing professional development. Otherwise, you may find that other business could easily overtake you.

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What Do You Need to Do Before Tendering For Business?

You now have a business large enough to go out and look for more business. You've found some great RFP (Request For Tender) and you want to go ahead and bid for some more work. So what should you have done before hand?

An old adage that I try and remember is that preparation, preparation and preparation make a great job seem easy. It is a sad fact that many companies jump into bidding or tendering for more work and they are simply not ready. So what should you do before you write that all important tender?

Most importantly you have to ensure that your business can actually undertake the project and complete the work whilst making a profit. Seems simple doesn't it - but even very large companies have bid on and won projects that have lost them millions of dollars/pounds. Look up the Post Office Pathway project in the UK and see how that nearly bankrupted both the Post Office and the companies undertaking the work.

Secondly you need to understand where your company stands with respect to your competitors. Are they more likely to win the project? Can you work with one of them in order to have more chance of winning the project?

Now look at the risks and rewards appertaining to the project? List your strengths and weaknesses and see if the RFP plays to your strengths. You need to be 100% certain that you are going to be able to make a profit, and hopefully advance your company, should you win the bid.

Next you need to prepare your bidding environment. Most proposals require some standard documentation such as company and product information and staff CV's/Resumes. You should have these to hand.

Lastly prepare your company. You need to know what bidding strategy you will be using. Are you going to bid low and provide a minimal solution or do you want to provide a great solution with all the "bells and whistles" and bid correspondingly high? Not all bids are won by the lowest bidder - many look at the quality of the bid itself.

Now read through the RFP in detail and ensure that you understand it and have enough staff and resources to not only prepare the proposal but also complete the winning project. Good luck.

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I Almost Bought an Accounting Business For Sale - Here's a Great Alternative

It wasn't too long ago that I was looking for accounting businesses for sale. I was also considering bookkeeping or other small businesses for sale.
But my background was in accounting and finance. I had been a chief financial officer for over 20 years in corporate America. So looking into accounting businesses for sale seemed to be the right path for me.
My situation was that I had a burning desire to retire but couldn't afford to. I was tired of the stress in my job. I was tired of working for someone else. I was tired of working 50-80 hours a week. I was tired of the long commute. I wanted out of Corporate America!
Purchasing an accounting business for sale was a personal finance decision that would affect me, but more importantly, my family. I considered several alternatives.
1. I could continue to work in my present job. I think this is the route most people take. Those people may not be willing to take the risk of doing something different. They may not be willing to put in the effort to learn something new. I think many times, people select this alternative and are miserable for all the years that follow. For me, this was not an alternative.
2. I could have found another job. Depending on your age, this could be a great solution to your problem. But it was not for me! For one thing, at my age, it would be difficult to replace my salary. And just the thought of staying in Corporate America, even though it was another job, just didn't excite me.
3. I could buy a franchise. But that would be very expensive. Besides, I think that buying a franchise was almost like buying a job. No, that was not for me.
4. I could start a brick and mortar business. I could find a book store, a retail shop, or an accounting business for sale. But I think that buying a business like that is almost the same, if not worst, than buying a franchise. It's like buying a job. More on that later.
5. I could get into a home based business - a professional internet marketing opportunity. After all, the initial investment of doing this would be far less than buying a franchise or a brick and mortar business.
I strongly considered option 4 - buying a small business for sale.
I was an entrepreneur at heart. I felt that I had the qualities I needed to do well operating my own business.
I then considered the negatives:
· Employees - I wanted to focus on the success of my business. Being responsible for employees can be very time consuming. Don't get me wrong. I have thoroughly enjoyed my relationship with employees over the years. Most were bright, motivated, and eager to learn.
But then there were a few that caused headaches. Most situations worked out. A few didn't work out as well as I would have liked.
· Vacations - Purchasing an accounting business for sale would limit my going on vacation when I wanted.
· Income potential - I felt that my income potential would be somewhat limited by the amount of work I needed to do for my clients.
· Spread too thin - Unless I had a large staff, I was going to find myself spread too thin. I enjoy having a broad range of responsibilities. But I didn't want to be spread so thin that I couldn't do a quality job in all areas.
· Purchase price - There was also the cost to purchase a business. Although accounting and bookkeeping businesses are not extremely expensive, they still may require a fairly sizable upfront cost. Despite proper due diligence, you never know for sure what you are buying.
· The economy - The future of the economy was a concern. At that time, I didn't have someone whose opinion on the economy I respected.
This was a very important personal finance decision for me. Fortunately, I made the decision that allowed me to retire from corporate America.
Well, guess what? I decided to get into a professional internet marketing business. I enjoy running my own business. I go on vacation when I want. I have no commute. I have no employees. I have unlimited income potential.
The upfront cost for my professional internet marketing business was a fraction of the cost of a traditional small business. I work with very professional people.
This business is a financial education company - not an investment service business. It projected the downturn in the economy, including the housing and banking industries, long before it occurred in 2007-2008. I will always be grateful for that.The business allows me the time to do other things that are very important to me. They include church activities, gardening, and studying investments and the economy.

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