Thursday, February 06, 2014

Standard Industrial Classification (UK)

SIC 2007

The United Kingdom Standard Industrial Classification of Economic Activities (SIC) is used to classify business establishments and other standard units by the type of economic activity in which they are engaged. The new version of these codes (SIC 2007) was adopted by the UK as from 1st January 2008.
With the agreement of the Office of National Statistics (ONS), Companies House uses a condensed version of the full list of codes available from ONS. Please be aware that only the codes made available on the condensed Companies House list below can be used on the Annual Return. Codes used from other sources than the Companies House list may mean your document is rejected, and your filing delayed. Even if your company is dormant (99999) or non-trading (74990) this still has to be indicated by using the appropriate SIC code.
Refer: http://www.companieshouse.gov.uk/infoAndGuide/sic/sic2007.shtml


SIC 2007 Description
SECTION A Agriculture, Forestry and Fishing
01110 Growing of cereals (except rice), leguminous crops and oil seeds
01120 Growing of rice
01130 Growing of vegetables and melons, roots and tubers
01140 Growing of sugar cane
01150 Growing of tobacco
01160 Growing of fibre crops
01190 Growing of other non-perennial crops
01210 Growing of grapes
01220 Growing of tropical and subtropical fruits
01230 Growing of citrus fruits
01240 Growing of pome fruits and stone fruits
01250 Growing of other tree and bush fruits and nuts
01260 Growing of oleaginous fruits
01270 Growing of beverage crops
01280 Growing of spices, aromatic, drug and pharmaceutical crops
01290 Growing of other perennial crops
01300 Plant propagation
01410 Raising of dairy cattle
01420 Raising of other cattle and buffaloes
01430 Raising of horses and other equines
01440 Raising of camels and camelids
01450 Raising of sheep and goats
01460 Raising of swine/pigs
01470 Raising of poultry
01490 Raising of other animals
01500 Mixed farming
01610 Support activities for crop production
01621 Farm animal boarding and care
01629 Support activities for animal production (other than farm animal boarding and care) n.e.c.
01630 Post-harvest crop activities
01640 Seed processing for propagation
01700 Hunting, trapping and related service activities
02100 Silviculture and other forestry activities
02200 Logging
02300 Gathering of wild growing non-wood products
02400 Support services to forestry
03110 Marine fishing
03120 Freshwater fishing
03210 Marine aquaculture
03220 Freshwater aquaculture
SECTION B Mining and Quarrying
05101 Deep coal mines
05102 Open cast coal working
05200 Mining of lignite
06100 Extraction of crude petroleum
06200 Extraction of natural gas
07100 Mining of iron ores
07210 Mining of uranium and thorium ores
07290 Mining of other non-ferrous metal ores
08110 Quarrying of ornamental and building stone, limestone, gypsum, chalk and slate
08120 Operation of gravel and sand pits; mining of clays and kaolin
08910 Mining of chemical and fertilizer minerals
08920 Extraction of peat
08930 Extraction of salt
08990 Other mining and quarrying n.e.c.
09100 Support activities for petroleum and natural gas mining
09900 Support activities for other mining and quarrying
SECTION C Manufacturing
10110 Processing and preserving of meat
10120 Processing and preserving of poultry meat
10130 Production of meat and poultry meat products
10200 Processing and preserving of fish, crustaceans and molluscs
10310 Processing and preserving of potatoes
10320 Manufacture of fruit and vegetable juice
10390 Other processing and preserving of fruit and vegetables
10410 Manufacture of oils and fats
10420 Manufacture of margarine and similar edible fats
10511 Liquid milk and cream production
10512 Butter and cheese production
10519 Manufacture of other milk products
10520 Manufacture of ice cream
10611 Grain milling
10612 Manufacture of breakfast cereals and cereals-based food
10620 Manufacture of starches and starch products
10710 Manufacture of bread; manufacture of fresh pastry goods and cakes
10720 Manufacture of rusks and biscuits; manufacture of preserved pastry goods and cakes
10730 Manufacture of macaroni, noodles, couscous and similar farinaceous products
10810 Manufacture of sugar
10821 Manufacture of cocoa and chocolate confectionery
10822 Manufacture of sugar confectionery
10831 Tea processing
10832 Production of coffee and coffee substitutes
10840 Manufacture of condiments and seasonings
10850 Manufacture of prepared meals and dishes
10860 Manufacture of homogenized food preparations and dietetic food
10890 Manufacture of other food products n.e.c.
10910 Manufacture of prepared feeds for farm animals
10920 Manufacture of prepared pet foods
11010 Distilling, rectifying and blending of spirits
11020 Manufacture of wine from grape
11030 Manufacture of cider and other fruit wines
11040 Manufacture of other non-distilled fermented beverages
11050 Manufacture of beer
11060 Manufacture of malt
11070 Manufacture of soft drinks; production of mineral waters and other bottled waters
12000 Manufacture of tobacco products
13100 Preparation and spinning of textile fibres
13200 Weaving of textiles
13300 Finishing of textiles
13910 Manufacture of knitted and crocheted fabrics
13921 Manufacture of soft furnishings
13922 manufacture of canvas goods, sacks, etc.
13923 manufacture of household textiles
13931 Manufacture of woven or tufted carpets and rugs
13939 Manufacture of other carpets and rugs
13940 Manufacture of cordage, rope, twine and netting
13950 Manufacture of non-wovens and articles made from non-wovens, except apparel
13960 Manufacture of other technical and industrial textiles
13990 Manufacture of other textiles n.e.c.
14110 Manufacture of leather clothes
14120 Manufacture of workwear
14131 Manufacture of other men's outerwear
14132 Manufacture of other women's outerwear
14141 Manufacture of men's underwear
14142 Manufacture of women's underwear
14190 Manufacture of other wearing apparel and accessories n.e.c.
14200 Manufacture of articles of fur
14310 Manufacture of knitted and crocheted hosiery
14390 Manufacture of other knitted and crocheted apparel
15110 Tanning and dressing of leather; dressing and dyeing of fur
15120 Manufacture of luggage, handbags and the like, saddlery and harness
15200 Manufacture of footwear
16100 Sawmilling and planing of wood
16210 Manufacture of veneer sheets and wood-based panels
16220 Manufacture of assembled parquet floors
16230 Manufacture of other builders' carpentry and joinery
16240 Manufacture of wooden containers
16290 Manufacture of other products of wood; manufacture of articles of cork, straw and plaiting materials
17110 Manufacture of pulp
17120 Manufacture of paper and paperboard
17211 Manufacture of corrugated paper and paperboard, sacks and bags
17219 Manufacture of other paper and paperboard containers
17220 Manufacture of household and sanitary goods and of toilet requisites
17230 Manufacture of paper stationery
17240 Manufacture of wallpaper
17290 Manufacture of other articles of paper and paperboard n.e.c.
18110 Printing of newspapers
18121 Manufacture of printed labels
18129 Printing n.e.c.
18130 Pre-press and pre-media services
18140 Binding and related services
18201 Reproduction of sound recording
18202 Reproduction of video recording
18203 Reproduction of computer media
19100 Manufacture of coke oven products
19201 Mineral oil refining
19209 Other treatment of petroleum products (excluding petrochemicals manufacture)
20110 Manufacture of industrial gases
20120 Manufacture of dyes and pigments
20130 Manufacture of other inorganic basic chemicals
20140 Manufacture of other organic basic chemicals
20150 Manufacture of fertilizers and nitrogen compounds
20160 Manufacture of plastics in primary forms
20170 Manufacture of synthetic rubber in primary forms
20200 Manufacture of pesticides and other agrochemical products
20301 Manufacture of paints, varnishes and similar coatings, mastics and sealants
20302 Manufacture of printing ink
20411 Manufacture of soap and detergents
20412 Manufacture of cleaning and polishing preparations
20420 Manufacture of perfumes and toilet preparations
20510 Manufacture of explosives
20520 Manufacture of glues
20530 Manufacture of essential oils
20590 Manufacture of other chemical products n.e.c.
20600 Manufacture of man-made fibres
21100 Manufacture of basic pharmaceutical products
21200 Manufacture of pharmaceutical preparations
22110 Manufacture of rubber tyres and tubes; retreading and rebuilding of rubber tyres
22190 Manufacture of other rubber products
22210 Manufacture of plastic plates, sheets, tubes and profiles
22220 Manufacture of plastic packing goods
22230 Manufacture of builders ware of plastic
22290 Manufacture of other plastic products
23110 Manufacture of flat glass
23120 Shaping and processing of flat glass
23130 Manufacture of hollow glass
23140 Manufacture of glass fibres
23190 Manufacture and processing of other glass, including technical glassware
23200 Manufacture of refractory products
23310 Manufacture of ceramic tiles and flags
23320 Manufacture of bricks, tiles and construction products, in baked clay
23410 Manufacture of ceramic household and ornamental articles
23420 Manufacture of ceramic sanitary fixtures
23430 Manufacture of ceramic insulators and insulating fittings
23440 Manufacture of other technical ceramic products
23490 Manufacture of other ceramic products n.e.c.
23510 Manufacture of cement
23520 Manufacture of lime and plaster
23610 Manufacture of concrete products for construction purposes
23620 Manufacture of plaster products for construction purposes
23630 Manufacture of ready-mixed concrete
23640 Manufacture of mortars
23650 Manufacture of fibre cement
23690 Manufacture of other articles of concrete, plaster and cement
23700 Cutting, shaping and finishing of stone
23910 Production of abrasive products
23990 Manufacture of other non-metallic mineral products n.e.c.
24100 Manufacture of basic iron and steel and of ferro-alloys
24200 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel
24310 Cold drawing of bars
24320 Cold rolling of narrow strip
24330 Cold forming or folding
24340 Cold drawing of wire
24410 Precious metals production
24420 Aluminium production
24430 Lead, zinc and tin production
24440 Copper production
24450 Other non-ferrous metal production
24460 Processing of nuclear fuel
24510 Casting of iron
24520 Casting of steel
24530 Casting of light metals
24540 Casting of other non-ferrous metals
25110 Manufacture of metal structures and parts of structures
25120 Manufacture of doors and windows of metal
25210 Manufacture of central heating radiators and boilers
25290 Manufacture of other tanks, reservoirs and containers of metal
25300 Manufacture of steam generators, except central heating hot water boilers
25400 Manufacture of weapons and ammunition
25500 Forging, pressing, stamping and roll-forming of metal; powder metallurgy
25610 Treatment and coating of metals
25620 Machining
25710 Manufacture of cutlery
25720 Manufacture of locks and hinges
25730 Manufacture of tools
25910 Manufacture of steel drums and similar containers
25920 Manufacture of light metal packaging
25930 Manufacture of wire products, chain and springs
25940 Manufacture of fasteners and screw machine products
25990 Manufacture of other fabricated metal products n.e.c.
26110 Manufacture of electronic components
26120 Manufacture of loaded electronic boards
26200 Manufacture of computers and peripheral equipment
26301 Manufacture of telegraph and telephone apparatus and equipment
26309 Manufacture of communication equipment other than telegraph, and telephone apparatus and equipment
26400 Manufacture of consumer electronics
26511 Manufacture of electronic measuring, testing etc. equipment, not for industrial process control
26512 Manufacture of electronic industrial process control equipment
26513 Manufacture of non-electronic measuring, testing etc. equipment, not for industrial process control
26514 Manufacture of non-electronic industrial process control equipment
26520 Manufacture of watches and clocks
26600 Manufacture of irradiation, electromedical and electrotherapeutic equipment
26701 Manufacture of optical precision instruments
26702 Manufacture of photographic and cinematographic equipment
26800 Manufacture of magnetic and optical media
27110 Manufacture of electric motors, generators and transformers
27120 Manufacture of electricity distribution and control apparatus
27200 Manufacture of batteries and accumulators
27310 Manufacture of fibre optic cables
27320 Manufacture of other electronic and electric wires and cables
27330 Manufacture of wiring devices
27400 Manufacture of electric lighting equipment
27510 Manufacture of electric domestic appliances
27520 Manufacture of non-electric domestic appliances
27900 Manufacture of other electrical equipment
28110 Manufacture of engines and turbines, except aircraft, vehicle and cycle engines
28120 Manufacture of fluid power equipment
28131 Manufacture of pumps
28132 Manufacture of compressors
28140 Manufacture of taps and valves
28150 Manufacture of bearings, gears, gearing and driving elements
28210 Manufacture of ovens, furnaces and furnace burners
28220 Manufacture of lifting and handling equipment
28230 Manufacture of office machinery and equipment (except computers and peripheral equipment)
28240 Manufacture of power-driven hand tools
28250 Manufacture of non-domestic cooling and ventilation equipment
28290 Manufacture of other general-purpose machinery n.e.c.
28301 Manufacture of agricultural tractors
28302 Manufacture of agricultural and forestry machinery other than tractors
28410 Manufacture of metal forming machinery
28490 Manufacture of other machine tools
28910 Manufacture of machinery for metallurgy
28921 Manufacture of machinery for mining
28922 Manufacture of earthmoving equipment
28923 Manufacture of equipment for concrete crushing and screening and roadworks
28930 Manufacture of machinery for food, beverage and tobacco processing
28940 Manufacture of machinery for textile, apparel and leather production
28950 Manufacture of machinery for paper and paperboard production
28960 Manufacture of plastics and rubber machinery
28990 Manufacture of other special-purpose machinery n.e.c.
29100 Manufacture of motor vehicles
29201 Manufacture of bodies (coachwork) for motor vehicles (except caravans)
29202 Manufacture of trailers and semi-trailers
29203 Manufacture of caravans
29310 Manufacture of electrical and electronic equipment for motor vehicles and their engines
29320 Manufacture of other parts and accessories for motor vehicles
30110 Building of ships and floating structures
30120 Building of pleasure and sporting boats
30200 Manufacture of railway locomotives and rolling stock
30300 Manufacture of air and spacecraft and related machinery
30400 Manufacture of military fighting vehicles
30910 Manufacture of motorcycles
30920 Manufacture of bicycles and invalid carriages
30990 Manufacture of other transport equipment n.e.c.
31010 Manufacture of office and shop furniture
31020 Manufacture of kitchen furniture
31030 Manufacture of mattresses
31090 Manufacture of other furniture
32110 Striking of coins
32120 Manufacture of jewellery and related articles
32130 Manufacture of imitation jewellery and related articles
32200 Manufacture of musical instruments
32300 Manufacture of sports goods
32401 Manufacture of professional and arcade games and toys
32409 Manufacture of other games and toys, n.e.c.
32500 Manufacture of medical and dental instruments and supplies
32910 Manufacture of brooms and brushes
32990 Other manufacturing n.e.c.
33110 Repair of fabricated metal products
33120 Repair of machinery
33130 Repair of electronic and optical equipment
33140 Repair of electrical equipment
33150 Repair and maintenance of ships and boats
33160 Repair and maintenance of aircraft and spacecraft
33170 Repair and maintenance of other transport equipment n.e.c.
33190 Repair of other equipment
33200 Installation of industrial machinery and equipment
SECTION D Electricity, gas, steam and air conditioning supply
35110 Production of electricity
35120 Transmission of electricity
35130 Distribution of electricity
35140 Trade of electricity
35210 Manufacture of gas
35220 Distribution of gaseous fuels through mains
35230 Trade of gas through mains
35300 Steam and air conditioning supply
SECTION E Water supply, sewerage, waste management and remediation activities
36000 Water collection, treatment and supply
37000 Sewerage
38110 Collection of non-hazardous waste
38120 Collection of hazardous waste
38210 Treatment and disposal of non-hazardous waste
38220 Treatment and disposal of hazardous waste
38310 Dismantling of wrecks
38320 Recovery of sorted materials
39000 Remediation activities and other waste management services
SECTION F Construction
41100 Development of building projects
41201 Construction of commercial buildings
41202 Construction of domestic buildings
42110 Construction of roads and motorways
42120 Construction of railways and underground railways
42130 Construction of bridges and tunnels
42210 Construction of utility projects for fluids
42220 Construction of utility projects for electricity and telecommunications
42910 Construction of water projects
42990 Construction of other civil engineering projects n.e.c.
43110 Demolition
43120 Site preparation
43130 Test drilling and boring
43210 Electrical installation
43220 Plumbing, heat and air-conditioning installation
43290 Other construction installation
43310 Plastering
43320 Joinery installation
43330 Floor and wall covering
43341 Painting
43342 Glazing
43390 Other building completion and finishing
43910 Roofing activities
43991 Scaffold erection
43999 Other specialised construction activities n.e.c.
SECTION G Wholesale and retail trade; repair of motor vehicles and motorcycles
45111 Sale of new cars and light motor vehicles
45112 Sale of used cars and light motor vehicles
45190 Sale of other motor vehicles
45200 Maintenance and repair of motor vehicles
45310 Wholesale trade of motor vehicle parts and accessories
45320 Retail trade of motor vehicle parts and accessories
45400 Sale, maintenance and repair of motorcycles and related parts and accessories
46110 Agents selling agricultural raw materials, livestock, textile raw materials and semi-finished goods
46120 Agents involved in the sale of fuels, ores, metals and industrial chemicals
46130 Agents involved in the sale of timber and building materials
46140 Agents involved in the sale of machinery, industrial equipment, ships and aircraft
46150 Agents involved in the sale of furniture, household goods, hardware and ironmongery
46160 Agents involved in the sale of textiles, clothing, fur, footwear and leather goods
46170 Agents involved in the sale of food, beverages and tobacco
46180 Agents specialised in the sale of other particular products
46190 Agents involved in the sale of a variety of goods
46210 Wholesale of grain, unmanufactured tobacco, seeds and animal feeds
46220 Wholesale of flowers and plants
46230 Wholesale of live animals
46240 Wholesale of hides, skins and leather
46310 Wholesale of fruit and vegetables
46320 Wholesale of meat and meat products
46330 Wholesale of dairy products, eggs and edible oils and fats
46341 Wholesale of fruit and vegetable juices, mineral water and soft drinks
46342 Wholesale of wine, beer, spirits and other alcoholic beverages
46350 Wholesale of tobacco products
46360 Wholesale of sugar and chocolate and sugar confectionery
46370 Wholesale of coffee, tea, cocoa and spices
46380 Wholesale of other food, including fish, crustaceans and molluscs
46390 Non-specialised wholesale of food, beverages and tobacco
46410 Wholesale of textiles
46420 Wholesale of clothing and footwear
46431 Wholesale of audio tapes, records, CDs and video tapes and the equipment on which these are played
46439 Wholesale of radio, television goods & electrical household appliances (other than records, tapes, CD's & video tapes and the equipment used for playing them)
46440 Wholesale of china and glassware and cleaning materials
46450 Wholesale of perfume and cosmetics
46460 Wholesale of pharmaceutical goods
46470 Wholesale of furniture, carpets and lighting equipment
46480 Wholesale of watches and jewellery
46491 Wholesale of musical instruments
46499 Wholesale of household goods (other than musical instruments) n.e.c
46510 Wholesale of computers, computer peripheral equipment and software
46520 Wholesale of electronic and telecommunications equipment and parts
46610 Wholesale of agricultural machinery, equipment and supplies
46620 Wholesale of machine tools
46630 Wholesale of mining, construction and civil engineering machinery
46640 Wholesale of machinery for the textile industry and of sewing and knitting machines
46650 Wholesale of office furniture
46660 Wholesale of other office machinery and equipment
46690 Wholesale of other machinery and equipment
46711 Wholesale of petroleum and petroleum products
46719 Wholesale of other fuels and related products
46720 Wholesale of metals and metal ores
46730 Wholesale of wood, construction materials and sanitary equipment
46740 Wholesale of hardware, plumbing and heating equipment and supplies
46750 Wholesale of chemical products
46760 Wholesale of other intermediate products
46770 Wholesale of waste and scrap
46900 Non-specialised wholesale trade
47110 Retail sale in non-specialised stores with food, beverages or tobacco predominating
47190 Other retail sale in non-specialised stores
47210 Retail sale of fruit and vegetables in specialised stores
47220 Retail sale of meat and meat products in specialised stores
47230 Retail sale of fish, crustaceans and molluscs in specialised stores
47240 Retail sale of bread, cakes, flour confectionery and sugar confectionery in specialised stores
47250 Retail sale of beverages in specialised stores
47260 Retail sale of tobacco products in specialised stores
47290 Other retail sale of food in specialised stores
47300 Retail sale of automotive fuel in specialised stores
47410 Retail sale of computers, peripheral units and software in specialised stores
47421 Retail sale of mobile telephones
47429 Retail sale of telecommunications equipment other than mobile telephones
47430 Retail sale of audio and video equipment in specialised stores
47510 Retail sale of textiles in specialised stores
47520 Retail sale of hardware, paints and glass in specialised stores
47530 Retail sale of carpets, rugs, wall and floor coverings in specialised stores
47540 Retail sale of electrical household appliances in specialised stores
47591 Retail sale of musical instruments and scores
47599 Retail of furniture, lighting, and similar (not musical instruments or scores) in specialised store
47610 Retail sale of books in specialised stores
47620 Retail sale of newspapers and stationery in specialised stores
47630 Retail sale of music and video recordings in specialised stores
47640 Retail sale of sports goods, fishing gear, camping goods, boats and bicycles
47650 Retail sale of games and toys in specialised stores
47710 Retail sale of clothing in specialised stores
47721 Retail sale of footwear in specialised stores
47722 Retail sale of leather goods in specialised stores
47730 Dispensing chemist in specialised stores
47741 Retail sale of hearing aids
47749 Retail sale of medical and orthopaedic goods in specialised stores (not incl. hearing aids) n.e.c.
47750 Retail sale of cosmetic and toilet articles in specialised stores
47760 Retail sale of flowers, plants, seeds, fertilizers, pet animals and pet food in specialised stores
47770 Retail sale of watches and jewellery in specialised stores
47781 Retail sale in commercial art galleries
47782 Retail sale by opticians
47789 Other retail sale of new goods in specialised stores (not commercial art galleries and opticians)
47791 Retail sale of antiques including antique books in stores
47799 Retail sale of other second-hand goods in stores (not incl. antiques)
47810 Retail sale via stalls and markets of food, beverages and tobacco products
47820 Retail sale via stalls and markets of textiles, clothing and footwear
47890 Retail sale via stalls and markets of other goods
47910 Retail sale via mail order houses or via Internet
47990 Other retail sale not in stores, stalls or markets
SECTION H Transportation and storage
49100 Passenger rail transport, interurban
49200 Freight rail transport
49311 Urban and suburban passenger railway transportation by underground, metro and similar systems
49319 Other urban, suburban or metropolitan passenger land transport (not underground, metro or similar)
49320 Taxi operation
49390 Other passenger land transport
49410 Freight transport by road
49420 Removal services
49500 Transport via pipeline
50100 Sea and coastal passenger water transport
50200 Sea and coastal freight water transport
50300 Inland passenger water transport
50400 Inland freight water transport
51101 Scheduled passenger air transport
51102 Non-scheduled passenger air transport
51210 Freight air transport
51220 Space transport
52101 Operation of warehousing and storage facilities for water transport activities
52102 Operation of warehousing and storage facilities for air transport activities
52103 Operation of warehousing and storage facilities for land transport activities
52211 Operation of rail freight terminals
52212 Operation of rail passenger facilities at railway stations
52213 Operation of bus and coach passenger facilities at bus and coach stations
52219 Other service activities incidental to land transportation, n.e.c.
52220 Service activities incidental to water transportation
52230 Service activities incidental to air transportation
52241 Cargo handling for water transport activities
52242 Cargo handling for air transport activities
52243 Cargo handling for land transport activities
52290 Other transportation support activities
53100 Postal activities under universal service obligation
53201 Licensed carriers
53202 Unlicensed carriers
SECTION I Accommodation and food service activities
55100 Hotels and similar accommodation
55201 Holiday centres and villages
55202 Youth hostels
55209 Other holiday and other collective accommodation
55300 Recreational vehicle parks, trailer parks and camping grounds
55900 Other accommodation
56101 Licenced restaurants
56102 Unlicenced restaurants and cafes
56103 Take-away food shops and mobile food stands
56210 Event catering activities
56290 Other food services
56301 Licenced clubs
56302 Public houses and bars
SECTION J Information and communication
58110 Book publishing
58120 Publishing of directories and mailing lists
58130 Publishing of newspapers
58141 Publishing of learned journals
58142 Publishing of consumer and business journals and periodicals
58190 Other publishing activities
58210 Publishing of computer games
58290 Other software publishing
59111 Motion picture production activities
59112 Video production activities
59113 Television programme production activities
59120 Motion picture, video and television programme post-production activities
59131 Motion picture distribution activities
59132 Video distribution activities
59133 Television programme distribution activities
59140 Motion picture projection activities
59200 Sound recording and music publishing activities
60100 Radio broadcasting
60200 Television programming and broadcasting activities
61100 Wired telecommunications activities
61200 Wireless telecommunications activities
61300 Satellite telecommunications activities
61900 Other telecommunications activities
62011 Ready-made interactive leisure and entertainment software development
62012 Business and domestic software development
62020 Information technology consultancy activities
62030 Computer facilities management activities
62090 Other information technology service activities
63110 Data processing, hosting and related activities
63120 Web portals
63910 News agency activities
63990 Other information service activities n.e.c.
SECTION K Financial and insurance activities
64110 Central banking
64191 Banks
64192 Building societies
64201 Activities of agricultural holding companies
64202 Activities of production holding companies
64203 Activities of construction holding companies
64204 Activities of distribution holding companies
64205 Activities of financial services holding companies
64209 Activities of other holding companies n.e.c.
64301 Activities of investment trusts
64302 Activities of unit trusts
64303 Activities of venture and development capital companies
64304 Activities of open-ended investment companies
64305 Activities of property unit trusts
64306 Activities of real estate investment trusts
64910 Financial leasing
64921 Credit granting by non-deposit taking finance houses and other specialist consumer credit grantors
64922 Activities of mortgage finance companies
64929 Other credit granting n.e.c.
64991 Security dealing on own account
64992 Factoring
64999 Financial intermediation not elsewhere classified
65110 Life insurance
65120 Non-life insurance
65201 Life reinsurance
65202 Non-life reinsurance
65300 Pension funding
66110 Administration of financial markets
66120 Security and commodity contracts dealing activities
66190 Activities auxiliary to financial intermediation n.e.c.
66210 Risk and damage evaluation
66220 Activities of insurance agents and brokers
66290 Other activities auxiliary to insurance and pension funding
66300 Fund management activities
SECTION L Real estate activities
68100 Buying and selling of own real estate
68201 Renting and operating of Housing Association real estate
68202 Letting and operating of conference and exhibition centres
68209 Other letting and operating of own or leased real estate
68310 Real estate agencies
68320 Management of real estate on a fee or contract basis
SECTION M Professional, scientific and technical activities
69101 Barristers at law
69102 Solicitors
69109 Activities of patent and copyright agents; other legal activities n.e.c.
69201 Accounting and auditing activities
69202 Bookkeeping activities
69203 Tax consultancy
70100 Activities of head offices
70210 Public relations and communications activities
70221 Financial management
70229 Management consultancy activities other than financial management
71111 Architectural activities
71112 Urban planning and landscape architectural activities
71121 Engineering design activities for industrial process and production
71122 Engineering related scientific and technical consulting activities
71129 Other engineering activities
71200 Technical testing and analysis
72110 Research and experimental development on biotechnology
72190 Other research and experimental development on natural sciences and engineering
72200 Research and experimental development on social sciences and humanities
73110 Advertising agencies
73120 Media representation services
73200 Market research and public opinion polling
74100 specialised design activities
74201 Portrait photographic activities
74202 Other specialist photography
74203 Film processing
74209 Photographic activities not elsewhere classified
74300 Translation and interpretation activities
74901 Environmental consulting activities
74902 Quantity surveying activities
74909 Other professional, scientific and technical activities n.e.c.
74990 Non-trading company
75000 Veterinary activities
SECTION N Administrative and support service activities
77110 Renting and leasing of cars and light motor vehicles
77120 Renting and leasing of trucks and other heavy vehicles
77210 Renting and leasing of recreational and sports goods
77220 Renting of video tapes and disks
77291 Renting and leasing of media entertainment equipment
77299 Renting and leasing of other personal and household goods
77310 Renting and leasing of agricultural machinery and equipment
77320 Renting and leasing of construction and civil engineering machinery and equipment
77330 Renting and leasing of office machinery and equipment (including computers)
77341 Renting and leasing of passenger water transport equipment
77342 Renting and leasing of freight water transport equipment
77351 Renting and leasing of air passenger transport equipment
77352 Renting and leasing of freight air transport equipment
77390 Renting and leasing of other machinery, equipment and tangible goods n.e.c.
77400 Leasing of intellectual property and similar products, except copyright works
78101 Motion picture, television and other theatrical casting activities
78109 Other activities of employment placement agencies
78200 Temporary employment agency activities
78300 Human resources provision and management of human resources functions
79110 Travel agency activities
79120 Tour operator activities
79901 Activities of tourist guides
79909 Other reservation service activities n.e.c.
80100 Private security activities
80200 Security systems service activities
80300 Investigation activities
81100 Combined facilities support activities
81210 General cleaning of buildings
81221 Window cleaning services
81222 Specialised cleaning services
81223 Furnace and chimney cleaning services
81229 Other building and industrial cleaning activities
81291 Disinfecting and exterminating services
81299 Other cleaning services
81300 Landscape service activities
82110 Combined office administrative service activities
82190 Photocopying, document preparation and other specialised office support activities
82200 Activities of call centres
82301 Activities of exhibition and fair organisers
82302 Activities of conference organisers
82911 Activities of collection agencies
82912 Activities of credit bureaus
82920 Packaging activities
82990 Other business support service activities n.e.c.
SECTION O Public administration and defence; compulsory social security
84110 General public administration activities
84120 Regulation of health care, education, cultural and other social services, not incl. social security
84130 Regulation of and contribution to more efficient operation of businesses
84210 Foreign affairs
84220 Defence activities
84230 Justice and judicial activities
84240 Public order and safety activities
84250 Fire service activities
84300 Compulsory social security activities
SECTION P Education
85100 Pre-primary education
85200 Primary education
85310 General secondary education
85320 Technical and vocational secondary education
85410 Post-secondary non-tertiary education
85421 First-degree level higher education
85422 Post-graduate level higher education
85510 Sports and recreation education
85520 Cultural education
85530 Driving school activities
85590 Other education n.e.c.
85600 Educational support services
SECTION Q Human health and social work activities
86101 Hospital activities
86102 Medical nursing home activities
86210 General medical practice activities
86220 Specialists medical practice activities
86230 Dental practice activities
86900 Other human health activities
87100 Residential nursing care facilities
87200 Residential care activities for learning difficulties, mental health and substance abuse
87300 Residential care activities for the elderly and disabled
87900 Other residential care activities n.e.c.
88100 Social work activities without accommodation for the elderly and disabled
88910 Child day-care activities
88990 Other social work activities without accommodation n.e.c.
SECTION R Arts, entertainment and recreation
90010 Performing arts
90020 Support activities to performing arts
90030 Artistic creation
90040 Operation of arts facilities
91011 Library activities
91012 Archives activities
91020 Museums activities
91030 Operation of historical sites and buildings and similar visitor attractions
91040 Botanical and zoological gardens and nature reserves activities
92000 Gambling and betting activities
93110 Operation of sports facilities
93120 Activities of sport clubs
93130 Fitness facilities
93191 Activities of racehorse owners
93199 Other sports activities
93210 Activities of amusement parks and theme parks
93290 Other amusement and recreation activities n.e.c.
SECTION S Other service activities
94110 Activities of business and employers membership organisations
94120 Activities of professional membership organisations
94200 Activities of trade unions
94910 Activities of religious organisations
94920 Activities of political organisations
94990 Activities of other membership organisations n.e.c.
95110 Repair of computers and peripheral equipment
95120 Repair of communication equipment
95210 Repair of consumer electronics
95220 Repair of household appliances and home and garden equipment
95230 Repair of footwear and leather goods
95240 Repair of furniture and home furnishings
95250 Repair of watches, clocks and jewellery
95290 Repair of personal and household goods n.e.c.
96010 Washing and (dry-)cleaning of textile and fur products
96020 Hairdressing and other beauty treatment
96030 Funeral and related activities
96040 Physical well-being activities
96090 Other service activities n.e.c.
SECTION T Activities of households as employers; undifferentiated goods- and services-producing activities of households for own use
97000 Activities of households as employers of domestic personnel
98000 Residents property management
98100 Undifferentiated goods-producing activities of private households for own use
98200 Undifferentiated service-producing activities of private households for own use
SECTION U Activities of extraterritorial organisations and bodies
99000 Activities of extraterritorial organisations and bodies
99999 Dormant Company

Getting Investment, Key Factor: Initial Valuation

If you are going to get outside investment to start your business, you need to know your initial valuation. Valuation is essentially price.

Say you want to bring in $150,000 from an angel investor. The immediate question from the investor will be something like: “at what valuation?” Sometimes that’s called “pre-money valuation,” because the instant the deal happens the valuation will change into post-money valuation, which is always higher — because your company just got some new cash.
Your answer sets your deal equivalent of an asking price. If you say $500,000, then you’re offering the investor 30% of your company for $150,000. If you say $300,000, you’re offering 50%. If you say $1 million, then you’re only offering 15%.
Which leads to the question:
So how do I know? How do I set valuation appropriately? What is that based on? Is it some multiple of sales, or intellectual property, or what?
And that’s a good question, and very hard to answer. Sure, you want some compromise between what you want to give, as a percent of ownership in your company, and what investors would want to buy. Investors will simply say no if it’s not an attractive offer. But that’s still very vague.
  • In the case of an existing business, with some history, you do have some formulas you can use. For a great site on that business interpretation of valuation, for existing busineses, I suggest bizequity.com, the zillo of small business.
  • When we’re talking about startups, however, you don’t have history and you can’t really apply formulas based on sales, or revenue, or even intellectual property (although that could be more relevant).
So here’s my concrete suggestion:
  1. Calculate starting costs. That’s two lists, the expenses you have to incur and the assets you have to have at the starting point — except cash. Leave that blank for a bit.  Add those all-except for cash assets to the starting costs, to get an amount, a number in dollars.  Click here for a lot more on that.So, for example, in the illustration here, that would be about $40,000. Yes, I know it says $38,750, but this is just an estimated guess; always round up. You never guess just right.
  2. Calculate cash flow through the lean period at the beginning, before your sales cover your costs.  Make a good guess at how much money you need to cover the deficit spending to get you to an operational month-by-month break even level of cash. That’s where the cash requirement number in the illustration came from: it seemed like this company would need about $400,000 to survive from startup to break-even.  You can’t see much in the chart below, because it’s small, but it shows a projected 12 months of cash flow (in blue) with a minimum balance, a deficit (in red), of about $400,000.
  3. That gives you a number. In this case, it’s $400,000. That’s what your cash flow shows you you’ll need to get to cash-flow break-even. In the last two months, the cash flow is positive, so the negative balance starts shrinking. With that estimate as a best guess, you go back into your startup costs calculation, and add in the cash required. It’s $400,000. You can see what that does to the startup costs worksheet in the next illustration here.
  4. Having done that, you now know that you need about $500,000 from investors (again, technically it’s $458,750, but you’re using best-guess estimates, so round up.) Set that as the amount of investment you’re seeking. Then — and here it gets hard, to be sure — you need to decide how much of your company you’re going to offer to an investor in exchange for that $500,000.
  5. Get some help here if you can. Ask somebody with experience in startups, or dealing with angel investors, or both. Ask an attorney you can trust, who should also be somebody with experience. The thing is, how much of your company you offer to investors is about a compromise between what you’d like — none, free money — and what will entice the investors to write checks.At this point a lot depends on your overall business offering, the cards your company brings to the table. Investors want as high return as possible, with as little risk, but in relation to return. How experienced is your team? How defensible is your product? How rich is the market? All these factors determine what kind of a deal will be acceptable to investors.
    • Let’s say, in this case, you’re new at startups, you have very little track record, and you want to attract an active angel investor as a partner. So maybe you set your initial valuation at $750K, meaning you’re offering to give away 2/3 of your ownership to get the money you need. You’re being realistic about what will attract an investor. You better really, really, like that investor, because he or she will essentially own your company. But this is a hypothetical case, and without a lot of experience and defensibility, that may be the best you can do.
    • Or maybe you’ve got better cards to play: you’ve got a team with startup experience, and a defensible new product, with some intellectual property, and it looks like an attractive market. That makes you able to set a stronger valuation, and maybe — we hope — still make it an attractive offer to investors. So maybe you say you’re valuing it at $1.5 million. You’re offering investors one third of your company for $500K.
So there’s a quick and (I hope) simple summary of how you set the initial (pre-money) valuation when you want to attract investment.

Bloomberg Visual-data for Industries

http://www.bloomberg.com/visual-data/industries/q/market-leaders

Three Ways Companies Decide The Price Of A Product


Pricing is one of the building blocks of marketing that appears to be easy to understand, but is probably one of the most difficult. Many think it is easy because we all buy products that have prices, and many believe all you have to do is sell the product for more than it costs you to earn a profit.

As cost accountants will tell you, determining the real cost is not trivial. More importantly, deciding on the price is so much more difficult because, in addition to the physical factors of cost and profit, price is subject to psychological factors, some of which are out of your company’s control. The best companies can do to have control over these psychological factors is to do a good job of branding. And to get the branding right, companies have to know how to develop the right underlying corporate image and positioning strategies.

In short, creating a brand image of the product that is impossible, or extremely difficult, to copy is the key to having control over your pricing strategies. If you are able to do that, you will be able to employ the most powerful and effective of all pricing strategies – What The Market Will Bear (WTMWB).


What the Market Will Bear

In markets where there is little or no competition, companies can employ a pricing strategy that optimizes profits. It is often called a What The Market Will Bear (WTMWB) price. This strategy sets the price based on the maximum price the market will pay for the product. On the one hand, the company wants to realize the highest profits possible in the shortest amount of time to help recoup high start-up costs, such R&D (research and development), production, and marketing costs.

On the other, it may not want its profits to be so attractive as to entice cutthroat competition to enter the market within the time window it needs to build market share and establish a leadership position. This strategy typically works because those likely to buy a new product – the Innovators and Early Adopters – are not particularly price sensitive. If there is considerable uniqueness and desirability built into the product brand, your company can employ a WTMWB strategy. If not, you might consider other effective pricing strategies.


Gross Profit Margin Target

In almost all cases, pricing strategies should begin with a Gross Profit Margin Target (GPMT) strategy. Companies typically know the gross profit margin they need to pay back their expenses and generate positive net income and cash flow. Once your company knows the cost of sales (cost of goods and services sold) of a particular product and the Gross Profit Margin Target it wants, it can easily employ a GPMT strategy. Gross Profit Margin is defined by the formula (P-C)/P, where P=Price and C=Cost of Sales. Anybody can put this formula into a spreadsheet program, and as costs change, recalculate the price that will produce the targeted Gross Profit Margin. Most companies know the GPMT they want. If you don’t, there are some common guidelines you can follow. 

Manufacturers typically aim for a GPMT of 50%
Distributors (Wholesalers) usually need a GPM of 10 to 15%
Dealers (Retailers) require a GPM of 30 to 50% (the higher percentage is for retailers that have to train people to use the product and the lower margin is for retailers that are selling a product that does not require after-sale support).



The price, or marked-up cost, to achieve these target GPMs is as follows:
Manufacturers P=2C so the formula is (2C-C)/2C = 0.5, yielding a GPM of 50%
Distributors P=1.18C so the formula is (1.18C-C)/1.18, which will give them a 15% GPM
Dealers P=1.5C so the formula is (1.5C-C)/1.5C, for a 33% GPM.



When I develop pricing strategies for a client that is a manufacturer, I always start with a GPMT pricing strategy that is twice their cost, or 2C, since that is an easy calculation that will give them their GPMT of 50%.

 
Most Significant Digit Pricing

For products that will be sold to consumers, most companies employ a Most Significant Digit (MSD) pricing strategy. Why? Studies and experience show that sales will be significantly higher if a product is priced at say $29.95 or $29.99 instead of $30. Most humans focus on the most significant digit – the “2” in this case. To them $29.95 or $29.99 seems a lot less than $30 even though it is only 1 to 5¢ less. Even expensive homes in Beverly Hills might sell for $7,995,000 rather than $8 million. There are exceptions. In upscale restaurants, it is usually a mistake to price an entrée at $31.95. Instead it will be priced at $32-. For some reason, people do not think the food is as good if MSD pricing is used in a high-end restaurant.

 
Combining all three

If a product is positioned as unique, smart marketing companies will typically use all three of these strategies in combination. Depending on the amount of memory the buyer chooses, Apple has priced its new iPhone 5S at $199, $299, and $399 for those that opt for a two-year contract. Apple is using a MSD strategy in addition to a WTMWB strategy because the iPhone has uniqueness built-in since Apple controls the platform. It also aims for a GPMT, which is not officially published, but which is in the 30 to 50% GPM range of well-positioned products in competitive markets. When Johnson & Johnson launched a margarine developed in Finland that lowers cholesterol, it priced a tub of this margarine at between $5.79 and $5.99. At the same time, a tub of regular margarine sold for 99¢. Based on this pricing, which used MSD and WTMWB strategies, many speculated that J&J priced the product at 8C, which gave it a GPMT of roughly 87.5%.


Pricing your products

When you are pricing your products, what gives you control over the price is the uniqueness built into your positioning, or branding, strategy. If you have created a product image that is impossible, or very difficult, to copy, you can employ a WTMWB price that will give you a good GPM that enables you to achieve your desired GPMT. And, if you sell your product in a consumer market, it would be a good idea to also employ an MSD pricing strategy. For example, if you are a manufacturer that is targeting a GPM of 50% and your cost of sales is $15, you might consider selling the product for $29.95 – a nickel less than the price of 2C. Best of luck.

Read more: http://www.businessinsider.com/3-powerful-pricing-strategies-businesses-should-always-consider-2013-10#ixzz2sZINPUL2

Wednesday, February 05, 2014

Cash Flow Statement

The cash flow statement (or statement of cash flows) is one of the main financial statements. The cash flow statement explains how a company's cash and cash equivalents have changed during a specified period of time.

The cash flow statement is organized into three sections:
      1. Cash provided and used in operating activities,
      2. Cash provided and used in investing activities,
      3. Cash provided and used in financing activities.

Under the indirect method of preparing and presenting the cash flow statement, the operating activities section begins with the net income during the period of the statement. Since the company's net income was calculated and reported under the accrual basis of accounting, the amount of net income needs to be adjusted to a cash amount. The first adjustment is to add back the amount of depreciation, depletion, and amortization expenses, since these expenses had reduced net income but did not reduce the company's cash. Next, any gains or losses on the sale of long-term assets used in the business are listed, since the entire amount received from the sale is reported as investing activities. Lastly, the changes in the current assets (other than cash) and the changes in current liabilities are listed. For example, if inventory has increased, the amount of the increase in inventory is subtracted because additional cash would have been used to increase the amount of inventory. The amount by which a current liability decreased is also subtracted, since it is assumed that cash was used to decrease the current liability. All of the items reported in the operating activities section are combined into a final number: the net amount of cash provided by operating activities.

The second section of the cash flow statement reports the investing activities. The changes in the long-term asset account balances are reported in this section. For example, if a company's long-term investment in another company has increased during the period, the amount of the increase is reported as a negative amount in the investing activities section—an indication that cash was used. The same is true for the purchase of property, plant and equipment for use in the business—an increase in the equipment account indicates that cash was used to purchase equipment. If a long-term investment or plant asset is sold, the entire proceeds from the sale are reported as a positive amount in the investing activities section. This indicates that cash was provided or increased from the sale. (Any gain or loss on the sale is an adjustment to the net income reported in the operating activities section of the statement.)

The third section of the cash flow statement contains the company's financing activities. This section lists the changes in long-term liabilities and stockholders' equity. For example, if Bonds Payable has increased by $1,000,000, it is assumed that cash of $1,000,000 was provided. The $1,000,000 will appear as a positive amount in the financing activities section of the statement. If Bonds Payable decreased, then the amount of the decrease will be reported as a negative amount—indicating that cash was used to retire the bonds. The amount of dividends declared and paid will also appear as a negative amount, since cash was used. If the company sells some of its shares of stock, the amount received will be reported as a positive amount since it provided cash. If the company purchases some of its shares of stock, the amount will appear as a negative amount in the financing activities section because cash was used.

In addition to the three main sections of the cash flow statement, it is also necessary to disclose significant noncash transactions (e.g. exchanging stock for land) and other items required by generally accepted accounting principles. 

Refer:  http://www.accountingcoach.com/cash-flow-statement/crossword-puzzles
 

Saturday, February 01, 2014

Preparing the Financial Statements


Once the adjusting entries have been made or entered into a worksheet, the financial statements can be prepared using information from the ledger accounts. Because some of the financial statements use data from the other statements, the following is a logical order for their preparation:
  • Income statement
  • Statement of retained earnings
  • Balance sheet
  • Cash flow statement

Income Statement

The income statement reports revenues, expenses, and the resulting net income. It is prepared by transferring the following ledger account balances, taking into account any adjusting entries that have been or will be made:
  • Revenue
  • Expenses
  • Capital gains or losses

Statement of Retained Earnings

The retained earnings statement shows the retained earnings at the beginning and end of the accounting period. It is prepared using the following information:
  • Beginning retained earnings, obtained from the previous statement of retained earnings.
  • Net income, obtained from the income statement
  • Dividends paid during the accounting period

Balance Sheet

The balance sheet reports the assets, liabilities, and shareholder equity of the company. It is constructed using the following information:
  • Balances of all asset accounts such cash, accounts receivable, etc.
  • Balances of all liability accounts such as accounts payable, notes, etc.
  • Capital stock balance
  • Retained earnings, obtained from the statement of retained earnings

Cash Flow Statement

The cash flow statement explains the reasons for changes in the cash balance, showing sources and uses of cash in the operating, financing, and investing activities of the firm. Because the cash flow statement is a cash-basis report, it cannot be derived directly from the ledger account balances of an accrual accounting system. Rather, it is derived by converting the accrual information to a cash-basis using one of the following two methods:
  • Direct method: cash flow information is derived by directly subtracting cash disbursements from cash receipts.
  • Indirect method: cash flow information is derived by adding or subtracting non-cash items from net income.

What is a stock split? Why do stocks split?

All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision by the company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split, every shareholder with one stock is given an additional share. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split.

A stock's price is also affected by a stock split. After a split, the stock price will be reduced since the number of shares outstanding has increased. In the example of a 2-for-1 split, the share price will be halved. Thus, although the number of outstanding shares and the stock price change, the market capitalization remains constant.

A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.

A stock split can also result in a stock price increase following the decrease immediately after the split. Since many small investors think the stock is now more affordable and buy the stock, they end up boosting demand and drive up prices. Another reason for the price increase is that a stock split provides a signal to the market that the company's share price has been increasing and people assume this growth will continue in the future, and again, lift demand and prices.

Another version of a stock split is the reverse split. This procedure is typically used by companies with low share prices that would like to increase these prices to either gain more respectability in the market or to prevent the company from being delisted (many stock exchanges will delist stocks if they fall below a certain price per share). For example, in a reverse 5-for-1 split, 10 million outstanding shares at 50 cents each would now become two million shares outstanding at $2.50 per share. In both cases, the company is worth $5 million.

The bottom line is a stock split is used primarily by companies that have seen their share prices increase substantially and although the number of outstanding shares increases and price per share decreases, the market capitalization (and the value of the company) does not change. As a result, stock splits help make shares more affordable to small investors and provides greater marketability and liquidity in the market. 

Refer: www.investopedia.com/ask/answers/113.asp

Top 10 Corporate Accounting Scandals







The 10 Worst Corporate Accounting Scandals of All Time

Friday, January 31, 2014

Top Investment Banks - FT List

Top 10 Banks($m)vs. Prev Period*M&AEquityBondsLoans
JP Morgan5,931.29
+10%
20253125
Bank of America Merrill Lynch5,455.47
+22%
18223029
Goldman Sachs4,791.85
+20%
32322412
Morgan Stanley4,174.06
+13%
26333012
Citi3,809.59
+7%
20253718
Deutsche Bank3,421.03
+6%
16243823
Credit Suisse3,327.84
0%
21283022
Barclays3,294.17
+5%
22223323
Wells Fargo2,136.43
+15%
9193833
RBC Capital Markets1,901.07
+7%
23182831
Total78,678.70
+6%
27222723

10 ways telecom can make money in the future a.k.a. telecom revenue 2.0

LTE roll-outs are taking place in America and Europe. Over-the-top-players are likely to start offering large-scale and free HD mobile VoIP over the next 6-18 months. Steeply declining ARPU will be the result. The telecom industry needs new revenue: telecom revenue 2.0. How can they do it?

1. Become a Telecom Venture Capitalist
Buying the number 2 o 3 player in a new market or creating a copy-cat solution has not worked. Think about Terra/Lycos/Vivendi portals, Keteque, etc. So the better option is to make sure innovative startups get partly funded by telecom operators. This assures that operators will be able to launch innovative solutions in the future. Just being a VC will not be enough. Also investment in quickly launching the new startup services and incorporating them into the existing product catalog are necessary.

2. SaaSification & Monetization
SaaS monetization is not reselling SaaS and keeping a 30-50% revenue share. SaaS monetization means offering others the development/hosting tools, sales channels, support facilities, etc. to quickly launch new SaaS solutions that are targeted at new niche or long tail segments. SaaSification means that existing license-based on-site applications can be quickly converted into subscription-based SaaS offerings. The operator is a SaaS enabler and brings together SaaS creators with SaaS customers.

3. Enterprise Mobilization, BPaaS and BYOD
There are millions of small, medium and large enterprises that have employees which bring smartphones and tablets to work [a.k.a. BYOD - bring-your-own-device]. Managing these solutions (security, provisioning, etc.) as well as mobilizing applications and internal processes [a.k.a. BPaaS - business processes as a service] will be a big opportunity. Corporate mobile app and mobile SaaS stores will be an important starting point. Solutions to quickly mobilize existing solutions, ideally without programming should come next.

4. M2M Monetization Solutions
At the moment M2M is not having big industry standards yet. Operators are ideally positioned to bring standards to quickly connect millions of devices and sensors to value added services. Most of these solutions will not be SIM-based so a pure-SIM strategy is likely to fail. Operators should think about enabling others to take advantage of the M2M revolution instead of building services themselves. Be the restaurant, tool shop and clothing store and not the gold digger during a gold rush.

5. Big Data and Data Intelligence as a Service
Operators are used to manage peta-bytes of data. However converting this data into information and knowledge is the next step towards monetizing data. At the moment big data solutions focus on storing, manipulating and reporting large volume of data. However the Big Data revolution is only just starting. We need big data apps, big data app stores, “big datafication” tools, etc.

6. All-you-can-eat HD Video-on-Demand
Global content distribution can be better done with the help of operators then without. Exporting Netflix-like business models to Europe, Asia, Africa, Latin-America, etc. is urgently necessary if Hollywood wants to avoid the next generation believing “content = free”. All-you-can-eat movies, series and music for €15/month is what should be aimed for.

7. NFC, micro-subscriptions, nano-payments, anonymous digital cash, etc.
Payment solutions are hot. Look at Paypal, Square, Dwolla, etc. Operators could play it nice and ask Visa, Mastercard, etc. how they can assist. However going a more disruptive route and helping Square and Dwolla serve a global marketplace are probably more lucrative. Except for NFC solutions also micro-subscriptions (e.g. €0.05/month) or nano-payments (e.g. €0.001/transaction) should be looked at.
Don’t forget that people will still want to buy things in a digital world which they do not want others to know about or from people or companies they do not trust. Anonymous digital cash solutions are needed when physical cash is no longer available. Unless of course you expect people to buy books about getting a divorce with the family’s credit card…

8. Build your own VAS for consumers and enterprises – iVAS.
Conference calls, PBX, etc. were the most advanced communication solutions offered by operators until recently. However creating visual drag-and-drop environments in which non-technical users can combine telecom and web assets to create new value-added-services can result in a new generation of VAS: iVAS. The VAS in which personal solutions are resolved by the people who suffer them. Especially in emerging countries where wide-spread smartphones and LTE are still some years off, iVAS can still have some good 3-5 years ahead. Examples would be personalized numbering schemas for my family & friends, distorting voices when I call somebody, etc. Let consumers and small enterprises be the creators by offering them visual  do-it-yourself tools. Combine solutions like Invox, OpenVBX, Google’s App Inventor, etc.

9. Software-defined networking solutions & Network as a Service
Networks are changing from hardware to software. This means network virtualization, outsourcing of network solutions (e.g. virtualized firewalls), etc. Operators are in a good position to offer a new generation of complex network solutions that can be very easily managed via a browser. Enterprises could substitute expensive on-site hardware for cheap monthly subscriptions of virtualized network solutions.

10. Long-Tail Solutions
Operators could be offering a large catalog of long-tail solutions that are targeted at specific industries or problem domains. Thousands of companies are building multi-device solutions. Mobile &  SmartTV virtualization and automated testing solutions would be of interest to them. Low-latency solutions could be of interest to the financial sector, e.g. automated trading. Call center and customer support services on-demand and via a subscription model. Many possible services in the collective intelligence, crowd-sourcing, gamification, computer vision, natural language processing, etc. domains.
Basically operators should create new departments that are financially and structurally independent from the main business and that look at new disruptive technologies/business ideas and how either directly or via partners new revenue can be generated with them.

What not to do?
Waste any more time. Do not focus on small or late-to-market solutions, e.g. reselling Microsoft 365, RCS like Joyn, etc. Focus on industry-changers, disruptive innovations, etc.
Yes LTE roll-out is important but without any solutions for telecom revenue 2.0, LTE will just kill ARPU. So action is required now. Action needs to be quick [forget about RFQs], agile [forget about standards - the iPhone / AppStore is a proprietary solution], well subsidized [no supplier will invest big R&D budgets to get a 15% revenue share] and independent [of red tape and corporate control so risk taking is rewarded, unless of course you predicted 5 years ago that Facebook and Angry Bird would be changing industries]…

Refer: http://telruptive.com/2012/03/26/10-ways-telecom-can-make-money-in-the-future-a-k-a-telecom-revenue-2-0/
 

Thursday, January 30, 2014

Priciing Strategies

Marketing - Pricing approaches and strategies
There are three main approaches a business takes to setting price:
Cost-based pricing: price is determined by adding a profit element on top of the cost of making the product. 
Customer-based pricing: where prices are determined by what a firm believes customers will be prepared to pay
Competitor-based pricing: where competitor prices are the main influence on the price set Let’s take a brief look at each of these approaches;

Cost based pricing

This involves setting a price by adding a fixed amount or percentage to the cost of making or buying the product.  In some ways this is quite an old-fashioned and somewhat discredited pricing strategy, although it is still widely used. 
After all, customers are not too bothered what it cost to make the product – they are interested in what value the product provides them.  
Cost-plus (or “mark-up”) pricing is widely used in retailing, where the retailer wants to know with some certainty what the gross profit margin of each sale will be. An advantage of this approach is that the business will know that its costs are being covered.  The main disadvantage is that cost-plus pricing may lead to products that are priced un-competitively.
Here is an example of cost-plus pricing, where a business wishes to ensure that it makes an additional £50 of profit on top of the unit cost of production.
Unit cost
£100
Mark-up
50%
Selling price
£150
How high should the mark-up percentage be? That largely depends on the normal competitive practice in a market and also whether the resulting price is acceptable to customers.
In the UK a standard retail mark-up is 2.4 times the cost the retailer pays to its supplier (normally a wholesaler).  So, if the wholesale cost of a product is £10 per unit, the retailer will look to sell it for 2.4x £10 = £24.  This is equal to a total mark-up of £14 (i.e. the selling price of £24 less the bought cost of £10).
The main advantage of cost-based pricing is that selling prices are relatively easy to calculate.  If the mark-up percentage is applied consistently across product ranges, then the business can also predict more reliably what the overall profit margin will be.

Customer-based pricing

Penetration pricing
You often see the tagline “special introductory offer” – the classic sign of penetration pricing. The aim of penetration pricing is usually to increase market share of a product, providing the opportunity to increase price once this objective has been achieved.
Penetration pricing is the pricing technique of setting a relatively low initial entry price, usually lower than the intended established price, to attract new customers. The strategy aims to encourage customers to switch to the new product because of the lower price.
Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume.  In the short term, penetration pricing is likely to result in lower profits than would be the case if price were set higher.  However, there are some significant benefits to long-term profitability of having a higher market share, so the pricing strategy can often be justified.
Penetration pricing is often used to support the launch of a new product, and works best when a product enters a market with relatively little product differentiation and where demand is price elastic – so a lower price than rival products is a competitive weapon. 
Price skimming
Skimming involves setting a high price before other competitors come into the market.  This is often used for the launch of a new product which faces little or no competition – usually due to some technological features.  Such products are often bought by “early adopters” who are prepared to pay a higher price to have the latest or best product in the market.
Good examples of price skimming include innovative electronic products, such as the Apple iPad and Sony PlayStation 3. There are some other problems and challenges with this approach:
Price skimming as a strategy cannot last for long, as competitors soon launch rival products which put pressure on the price (e.g. the launch of rival products to the iPhone or iPod).
Distribution (place) can also be a challenge for an innovative new product. It may be necessary to give retailers higher margins to convince them to stock the product, reducing the improved margins that can be delivered by price skimming. A final problem is that by price skimming, a firm may slow down the volume growth of demand for the product.  This can give competitors more time to develop alternative products ready for the time when market demand (measured in volume) is strongest.
Loss leaders
The use of loss leaders is a method of sales promotion.  A loss leader is a product priced below cost-price in order to attract consumers into a shop or online store. The purpose of making a product a loss leader is to encourage customers to make further purchases of profitable goods while they are in the shop.  But does this strategy work?
Pricing is a key competitive weapon and a very flexible part of the marketing mix.
If a business undercuts its competitors on price, new customers may be attracted and existing customers may become more loyal. So, using a loss leader can help drive customer loyalty.
One risk of using a loss leader is that customers may take the opportunity to “bulk-buy”.  If the price discount is sufficiently deep, then it makes sense for customers to buy as much as they can (assuming the product is not perishable).
Using a loss leader is essentially a short-term pricing tactic for any one product.  Customers will soon get used to the tactic, so it makes sense to change the loss leader or its merchandising every so often.
Predatory pricing (note: this is illegal)
With predatory pricing, prices are deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition.  The price set might even be free, or lead to losses by the predator.  Whatever the approach, predatory pricing is illegal under competition law.
Psychological pricing
Sometimes prices are set at what seem to be unusual price points.  For example, why are DVD’s priced at £12.99 or £14.99? The answer is the perceived price barriers that customers may have.  They will buy something for £9.99, but think that £10 is a little too much.  So a price that is one pence lower can make the difference between closing the sale, or not!
The aim of psychological pricing is to make the customer believe the product is cheaper than it really is.  Pricing in this way is intended to attract customers who are looking for “value”.

Competitor-based pricing

If there is strong competition in a market, customers are faced with a wide choice of who to buy from. They may buy from the cheapest provider or perhaps from the one which offers the best customer service.  But customers will certainly be mindful of what is a reasonable or normal price in the market.
Most firms in a competitive market do not have sufficient power to be able to set prices above their competitors. They tend to use “going-rate” pricing – i.e. setting a price that is in line with the prices charged by direct competitors.  In effect such businesses are “price-takers” – they must accept the going market price as determined by the forces of demand and supply.
An advantage of using competitive pricing is that selling prices should be line with rivals, so price should not be a competitive disadvantage.
The main problem is that the business needs some other way to attract customers.  It has to use non-price methods to compete – e.g. providing distinct customer service or better availability. 

Refer: http://www.tutor2u.net/business/gcse/marketing_pricing_strategies.htm

Saturday, January 25, 2014

Ten ways to become resilient

1. Understand that Setbacks are Part of Life
Life is not always cozy and fun. It is also characterized by complexity and challenges. They belong to life like the night is part of the day. Without night there would be no day. Without pain there would be no joy. While we often cannot avoid all the problems, we can choose to stay flexible, open-minded, and determined to succeed.

2. Be aware of Yourself and the Environment
Resilient people are aware of themselves, the environment, and their own emotional reactions to those around them. They have understood the importance of evaluating the reasons of their feelings by constantly observing themselves. This enables them to take control of the situation and to develop various options of behaving and acting.

3. Believe and know that You are in Control
If you are a resilient person, then you have a so-called Internal Locus of Control. You believe that you can control your life, you do not believe that you are defined by external factors which you can´t control. Instead, you feel that you have the power to make choices and take actions that will affect your success rate.

4. Become a Solution Thinker
When a difficult situation arises, resilient people would always think of solutions. They would act calmly, would review holistically the task at hand, and would be able to spot possible solutions. If not, they would envision them. Next time you encounter a new challenge, make a quick list of some of the potential ways you could solve it. Experiment with different strategies and focus on developing a logical way to work through it.

5. Believe in Yourself
You are unique. You are beautiful. You have proven already so often in life that you are an achiever. Remind yourself of your strengths and accomplishments. Believe in yourself and become more confident about your own abilities and strengths.

6. Set Goals and define manageable Milestones
Difficult situations can be extremely daunting. Resilient people are able to view these situations in a realistic way, and then set reasonable goals to deal with the problem. When you find yourself becoming overwhelmed by a situation, take a step back to simply assess what is before you. Brainstorm possible solutions, and then break them down into manageable steps. Be willing to adapt, if necessary. Remain flexible and embrace change.

7. Stay optimistic
Keeping a hopeful attitude during turbulent times is another key part of resilience. This does not mean ignoring problems at hand in order to focus on positive outcomes. It means understanding that setbacks are transient and that you have the skills and abilities to combat the challenges you face. What you are dealing with may be difficult, but it is important to remain hopeful and positive about a brighter future. View yourself as winner, not as a loser.

8. Be brave and ask for Help
Resilient people are mature enough to admit that they can´t know everything. They are also strong enough to admit, if they feel that their energy level is going down and that they need to re-charge their batteries by receiving outside know-how, advice, support, etc. from any potential source of assistance. In this respect it helps if you have a good social network. If you can exchange with family, friends, or colleagues in order to gain new perspectives and/ or motivation.

9. Take it easy
Even the best among us will not be able to achieve everything. Even if they are properly prepared, have done their homework, can rely on an excellent support network, are super optimistic, and absolutely committed. There are still factors outside of our control. And, most importantly, often things just need time to evolve and to develop. Resilient people understand that sometimes the best recipe of success is to step back and to wait. They know that patience often pays off. They do not get stressed out in such situations. Rather they relax, re-focus on themselves and getting ready for possible next steps.

10. Nurture Yourself
When you're stressed, it can be all too easy to neglect your own needs. Losing your appetite, ignoring exercise, and not getting enough sleep are all common reactions to a crisis situation. Focus on building your self-nurture skills, even when you are troubled. Make time for activities that you enjoy. By taking care of your own needs, you can boost your overall health and resilience and be fully ready to face life's challenges.