Vision Statement

External factors

Economic factors

inflation rates:Percentage increase in overall prices in a period of time, therefore there is a decrease in the purchasing power of the currency.  (Definicion.de , 2008).Consumer price index (CPI) measure of the percentage price changes relative to a certain period. (Confederación Colombiana de Consumidores, 2010)

Inflation may affect our industry because it can reduce the purchasing power of the currency, so that can distort the economy, generating a reduction in consumption.

A report of the newspaper El Tiempo, about a report of the Central Bank, says that inflation will rise to 5%, which will allow the economy to grow and maintain an environment of optimum conditions. Besides that economists say this will help the service sector. (El Tiempo, 2015)

worker productivity levels:Index that measures the performance and efficiency with which people perform an activity, with spending relationship between work and the amount of goods produced in a given time.  (eumed.net, s.f.)

Gross domestic product (GDP): a measure of the monetary value of goods and services produced in a given period of time. (club planeta, s.f.)

The productivity of our employees is essential as raising the productivity of labor can reduce the time it takes to perform a certain activity, which we would be cleaning company. A low level of productivity in our people cause losses to us, because if it takes a long time cleaning a house, the day's production will be low because fewer houses are cleaned.

income differences by region and consumer groups:

Colombia has a very marked inequality, according to a human development report presented by the United Nations Development Programme, Colombia is ranked 12th among the cities with the greatest inequality among 168 countries.  (El Tiempo, 2014)

Gini index: measures inequality on a scale from 0 to 100. The closer to 100, the more differences there. Colombia is 53.5, and in recent years has not had a breakthrough.  (El Tiempo, 2014)

The differences or gaps in terms of income creates an inequality, where not everyone can access the same services, so inequality generates that many people can not pay for our services, if less inequality and income was better distributed, we might have more costumers to offer our services.

European Economic Community: It was created to made a common market, to integrate economics. Nowadays, it is the european union. (Matthew, 2014)

Europe is among the top three countries that import in Colombia. Europe mainly handles import machinery, mechanical appliances and electrical equipment. Colombia signed a free trade treaty with the European Union, which removes barriers to trade, therefore the export and import be made available, which give way to new products arriving on the market that can benefit the industry. (Delegacion de la Union Europea y Colombia)

INTEREST RATES:

A rate which is charged or paid for the use of money or the Price of the money in the financial market. An interest rate is often expressed as an annual percentage of the principal.

With interest rates of one percentage point below those seen at the beginning of 2014 , a high probability remain that way in the first half of the year and then reduce a little in the second half of 2015 , the outlook on the cost of credit looks encouraging, especially for those people and companies that have among their plans and projects require funding to bring them up .

(ElTiempo, 2015)

The interest rate of the 2015. By the end, can benefit the company, because people can acquire goods and services more easily

 UNEMPLOYMENT TRENDS:

The percentage of the total labor force that is unemployed but actively seeking employment and willing to work.

In what refers to quarter between March and May this year, unemployment stood at 9.1 percent (the lowest in 15 years for that period), a period in which the number of employed rose by 689,000 in Colombia compared to the same months last year. As measured by the Dane , for the past 12 months mobile unemployment is 21 periods in a row with a single digit rates , reaching 9 percent.

(ElTiempo, 2015)

desempleo_dane.jpg

The unemployment rate will be lower by the time, and we can help our country creating jobs.

 DEMAND SHIFTS FOR THE DIFFERENT CATEGORIES OF GOODS AND SERVICES

“The demand curve is a graphical representation of an economic agent's willingness to purchase a given quantity of a good or service at a specific price based on preferences, income, and other prevailing factors at a given point in time. Demand curves in combination with supply curves, which depict the price to quantity relationship of producers, are a representation of the goods and services market. Where the two curves intersect is market equilibrium, the price to quantity relationship where demand and supply are equal."

(Boundless. “Changes in Demand and Shifts in the Demand Curve.”  2014)

This is an important tools for our enterprise, because we can analyze how will be the behavior of the market, when we decide to change the prices.

LEVEL OF DISPOSABLE INCOME

The income in the Colombian population has increased so there’s more availability to spend money. According to the dynamics of the economy, there are now more jobs, higher incomes and stability. On the other hand, this situation is used by the banks to offer people more credit products, especially cards, which create more debts and make the disposable income reduce.

Disposable income is also affected by the higher prices of the basket. However, according to the World Bank, the income level in Colombia is Upper middle, which means that part of disposable income, will be destined to the services industry as well.

http://www.portafolio.co/economia/deudas-disminuyen-ingreso-disponible-los-hogares

http://data.worldbank.org/country/colombia

GDP Trend

GDP has been rising in recent years, although in this 2015 there has been a slowdown in the economy, Colombia continues to occupy first place in growth among Latin American countries. GDP growth implies that the productivity of products and services has increased and that micro enterprises like ours, can help the growth of it.

colombia-gdp.png

http://www.tradingeconomics.com/colombia/gdp

http://www.dinero.com/economia/articulo/crecimiento-del-producto-interno-bruto-colombia-primer-trimestre-2015/209538

FOREIGN COUNTRY’S ECONOMIC CONDITIONS

Economic conditions in foreign countries may affect the service industry in different ways. A company can benefit trhough outsourcing thanks to the investment in another country in low labor price. Investors can find difficult to invest and promote development and employment in a country when the country itself has marked barriers that do not allow a flow of trading.

 

 

 

 

MONETARY POLICIES

Monetary policies establish that economical stability is guided by the inflation rates, it contributes to improving the welfare of the population by affecting in one way or another, the quality of life, social indicators, investment in the service industry, and the number of employment.

Social, Cultural, Demographic and natural variables

·        NUMBER OF BIRTHS

Captura.PNG

By the 2013, in Colombia there was born 649,742 children, where of them, there was 333,299 men and 316,443 women, seen the graph we can see that there decreasing the number of births.

We can use this statistics to know that the mothers are less by the time, and by the way they are going to use less the housekeepers services.

·        SEX ROLES

Nowadays the inequality of sexes in Colombia has diminished considerably, according to the article of the magazine Portfolio indicates that due to the demographic changes, nowadays a woman's shortage of agreement exists with the update of information done by the office of the census of the close conditions. According to his judging ones, in 2010 there are almost 50 million men more than women. According to his judging ones, in 2010 there are almost 50 million men more than women. The total world population was estimated in 6.852 million persons, in round numbers. Of this number, a total of 3.450 million corresponds to persons of the masculine sex and 3.402 million to persons of the feminine sex. The men in Colombia are now a majority up to 29 years, assessing a total of 21 ' 838.000 persons.

This is so important to our enterprise, because nowadays there are less women that stay at home doing the home works, and because of it we can say that there are more houses each day that will need services like the ones that we are offering.

·        ATTITUDES TOWARD RETIREMENT

Actually the men retirement at 62 years, and the women at 57 years, this affect us because, this people stay more time in their hoses and they probably will need more services in their houses.

·        ENERGY CONSERVATION

This can benefit our enterprise because, having a person all the days in the houses can affect the consumption of energy in the homes, while hiring the services two days a week will be more ecological and cheaper.

 

ECONOMIC

Propensity of people to spend

39 percent of Colombians do not save and most that do, 37 percent kept saving at home, eg in piggy banks, according to a report from the Development Bank of Latin America (CAF ).

25 percent of respondents take their savings into the financial system, which deposit, among others, accounts or term deposits. (Infographic saving habits of Colombians)

Likewise, CAF inquiry found that 67 percent of respondents whose income does not reach them at least once in the past year.

Overall, the study found that households in the country have knowledge of financial products and key handling money concepts. (ECONOMÍA, 2014)

Acording to this, Colombian people do not save, it affects  our bussines because if people don’t save money they can not pay someone to clean their home, they prefer to do it itself.

Fiscal Policies

Fiscal policy refers mainly to the management of income, expenditure and financing of the public sector. Fiscal policy, then, about the strategies that the state implements not only to generate resources, but also to efficiently manage such resources. (gerencie.com, 2010)

All the fiscal polices that the government implement in the Colombian economy affects our business  because every company have to pay taxes also if the economy is bad it affects because no one is going to use the service we provide.  Also if the government don’t   regulate interest rates  banks could raise and our company in case you need some could not access on.

Consumption patterns

Colombian consumption with credit cards is increasing. The pace is such that last year 91.3 million pesos per minute or 5.480 million was spent every hour. (M., 2015) This affects our business because if people in Colombia spend money in other things and they don’t save they would prefer to clean their own houses. But also it could be a good patron because it shows that people could invest in our business.

SOCIAL

Number of divorces

Latin American countries are among the nations with fewer divorces. Chile is in last place  with a rate of 3%, Guatemala and Colombia with 5 at a rate of 9%. This was revealed by a study by the Business Insider. (TIEMPO, 2014) This affects our business because if this affects our trading because if in families with children their parents  get  divorce  and the same amount of money will not be taken to pay someone to help with the cleanup so do not take the service.

Per capita income

Per capita income is an important variable due to the fact that according to these statistic we will know how many money people is receiving and apart from this and looking at other variables such as inflation rates or GDP we will know how many of these income people will invest on the industry.

Average disposable income

GNI per capita (formerly per capita GDP) is gross national income converted to US dollars using the World Bank Atlas method, divided by the midyear population.  This Affects our business in the way if people don’t earn to much money they can not be allow to spend in the service we provide.

Attitudes toward saving

(mejia, 11)

Because our culture people don’t save money , that affects us because if someone have problems with money and they have already contract our services it could be a customer lose for us.

Attitudes toward foreign peoples

People in Colombia  are  very kindly  with foreign people,  that makes that they want to visit Colombia many times or also to stay here. That is an advantage to our business because it can generate more utilities to us.

Government regulation

In Colombia there are many government regulation for any type of business, but also there are some specific for different business. Some of the common government regulations in Colombia are the: taxes, commercial licenses, Name of the business, trade marks and others. The importance of the government regulations is that this regulations are going to be the rules that our business has to follow to be a legal business in Colombia.

Ozone depletion

It concerns us because some industries have to pay to the government to contaminate the place or country. But also some other like us that help the planet and the ozone recycling since the first instance that are the homes of all of our customers.

Interest rates: According to the magazine “Dinero” the interest rate had an increased of 1,50%, passing of 5,75% to 6,00%with a span of 4 months.

Consumption patterns: Colombia stated that any change in the consumption and production patterns of industrialized countries must not have an adverse impact on the prospects for developing countries. He called for trade and technology transfer to be connected to any change in production and consumption patterns. Regarding the inferred recommendation from the Secretary-General's report that greater attention must be given to consumer decisions, he stressed producer decisions over consumer decisions. He called for the involvement of exporters, especially in developing countries, in decisions on worldwide standards of production and consumption.

Foreign countries economic conditions:

Export of labor and capital from Colombia: The Colombian labor force is among the most skilled and competitive worldwide. More than half the population is under 25.

Availability of Credits

 

Financial Information Infrastructure (FII) is the broader context in which the credit

reporting systems, and private credit bureaus, operate. Thus, the analysis of the FII in a country needs to go beyond the private credit bureaus, and include other private and public institutions, which provide credit and financial data on firms and individual consumers. There are also public data sources, such as court records, identification information, collateral registries and corporate registries, which are vital sources of data for private sector credit reporting firms. In addition, understanding the legal, regulatory, supervisory and, in general, institutional environment in which these systems are operating is vital to a sound approach to their development. The technical infrastructure, including telecommunications infrastructure, state of computerization and automation by providers and users of the data and the level of development of tools to use the data, such as credit scoring technologies, are also elements of FII. Last, but not at all least, public perception, understanding and support of credit reporting and FII are critical inputs to the development of these systems. Table 1 below presents a summary of the various elements of FII, and the rest of this section addresses the status of these FII elements in Colombia.

(Guadamillas, 2006)

 

1. Institutions: Institutions and firms which collect and distribute credit information (i.e.private credit bureaus, public credit registries, business credit information

suppliers, etc.)

2. Legal and regulatory framework: Legal and regulatory framework that allows for sharing credit data and other data relevant for predicting risk while respecting privacy issues.

3. Banking supervision & market oversight: Use of credit information in banking supervision, broader policy considerations related to development and use of credit and related data (effect on competition for the financial system, competition in the market for credit reports, access, etc.)

4. Tools: Analytical tools which facilitate the analysis of financial data, such as

Credit scoring.

5. Public sector data: Public databases which are important for predicting risk and which can contribute to credit reports (i.e., collateral registries, court records,

Corporate registries, etc.)

6. Technical infrastructure: Telecommunications, MIS and data processing capabilities, quality of data security, etc.

7. Public perceptions & support: Understanding and support for credit reporting by consumers, business associations, press, legislators, etc…

(Guadamillas, 2006)

 

Fiscal Policies

 

Colombia, once a model of fiscal discipline for other Latin American nations, has seen its fiscal situation deteriorate since the early 1990s. Higher government spending, taxes that did not keep pace with expenditures, and severe recession led to an unsustainable debt-to-GDP ratio of 52 percent in 2002. Short-term tax increases, even coupled with spending reforms, have not restored Colombia to fiscal balance. A Colombian government commission charged with researching more long-term tax and fiscal reforms gave rise to the selected essays included in this book, each coauthored by Colombian and North American public finance experts. The analyses and recommendations have particular policy relevance for developing economies in general.The studies include both broad discussions of Colombian fiscal and tax systems and detailed analyses of such specific tax instruments as the payroll tax, value-added tax, and the bank debit tax. The focus is on three key concerns: the sustainability of Colombia's fiscal situation, possible reforms to the national tax system, and the fiscal relationship between the national and subnational governments. The theme that emerges from these studies—the importance of moving toward a more efficient and equitable tax system while also raising revenue—suggests the limitations of stopgap measures and the real need for long-term fiscal reform.

(MIT press , 2016)

 

Money Market Race

 

Global money market rates differ dramatically depending on various factors, including underlying economic fundamentals and confidence in monetary policy. Attractive real rates tend to be related with positive near-term currency strength and are often the result of economic growth and monetary stability. Investing in foreign money markets with high real yields can add yield enhancement in addition to diversification benefits. The chart below uses Global 1-Month Deposit Rates to present the range of yield opportunities available to Global Investment Managers.

The Norway Interbank Deposit Rate and the Johannesburg Interbank Agreed Rate were used to proxy 1-month deposit rates for Norway and South Africa respectively. Each rate is an average of the rates indicated by local and international banks for 1-month deposits in the specified currency.

For Brazil, China, Chile, Colombia, India, Indonesia, Malaysia, Philippines, Russia, South Korea, Taiwan, and Thailand, the implied yields for one-month non-deliverable forward contracts were used to represent the rates and exposures available to Global Investment Managers.

A forward currency contract is an agreement by two parties to transact in currencies at a specific rate on a future date and then cash settle the agreement with a simple exchange of the market value difference between the current market rate and the initial agreed upon rate.

(Global Money Market Rates, 2016)

 

LEVEL OF DISPONIBLE INCOME

As we can find on (minhacienda, 2014)Colombia is on a middle-high level of disponible income and also could duplicate its income in 10 years

 

 

FEDERAL GOVERMENT BUDGET DEFICIT

Colombia recorded a Government Budget deficit equal to 2.40 percent of the country's Gross Domestic Product in 2014. Government Budget in Colombia averaged -3.63 percent of GDP from 2001 until 2014, reaching an all-time high of 0.23 percent of GDP in 2005 and a record low of -8.47 percent of GDP in 2004. As we can find on (economics, 2016)

Its trends are

2014   -2.1   

2013   -2.41  

2012   -2.45

2011   -2.9

2010   - 3.9

2009   -2.7

2008   - 2.11

2007   -1.79

2006   -3.4

 

VALUE OF COLOMBIAN PESO IN WORLD MARKETS

As we can read on

The Colombian peso is valued as 0,0003000 us dollars, 0,000276 euros,  0,001974 china Yuan and  0,04 japan yens

 

INCOME DIFFERENCES BY REGION

As we read on (semana, 2014)  we found that 3 regions are responsible for  more of the 50 percent of the whole country income with bogota being the most important one as the 24,4%,atlantico the 3,7%, antoquia the 13 %, bolivar the 4,2%, choco 0,5%, Santander 7,6%, Arauca 2,3%, Cundinamarca the 4,9%, meta 5,7%, valle 9,4% and the mazonas the 0,1%.

TAX  RATES

\Tax or mandatory contribution

Payments (number)

Notes on Payments

Time (hours)

Statutory tax rate

Tax base

Total tax rate (% of profit)

Notes on TTR

Municipal tax

1

online

1.104%

turnover

19.52

Corporate income tax

1

online

86

25%

taxable profit

16.33

Social security contributions

1

online

87

12%

gross salaries

14.12

Financial transactions tax

1

0.4%

withdrawals from bank account

6.51

Income Tax for Equity – CREE

1

online

9%

taxable profit

6.19

Payroll tax

0

jointly

4%

gross salaries

4.51

Real estate tax

1

1%

assessed real estate value

1.48

Urban Boundary Tax

1

2.6%

Project budget

0.79

Vehicle tax

1

2.5%

0.26

Stamp duty

1

0.00

small amount

Fuel tax

1

6%

consumption value

0.00

small amount

Employee contributions

0

8% - 10%

0.00

not included

Value added tax (VAT)

1

online

66

16%

value added

0.00

not included

Welfare security system

0

jointly

8.5%

gross salaries

0.00

included in other taxes

Labor risk insurance

0

jointly

0.522%

gross salaries

0.00

included in other taxes

Totals:

11.00

239.00

69.7

Notes:
Name of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table.
The hours for VAT include all the VAT and sales taxes applicable.
The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

 

Taken from (group, 2015)

Guadamillas, M. M. (Mayo de 2006). worldbank. Recuperado el 2 de Febrero de 2016, de worldbank: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/06/12/000425962_20120612141105/Rendered/PDF/695430ESW0P0980edit0Reporting0Paper.pdf

MIT press . (2016). Recuperado el 2 de Febrero de 2016, de MIT press: https://mitpress.mit.edu/books/fiscal-reform-colombia

Global Money Market Rates. (2016). Recuperado el 2 de Febrero de 2016, de Global Money Market Rates: http://www.wisdomtree.com/etfs/currency-etf-global-market-rates.aspx

 

economics, t. (2016, march). tranding economics . Retrieved march 2016, from trandindg economics : http://www.tradingeconomics.com/colombia/government-budget

group, w. b. (2015, june 1). doing business. Retrieved june 1, 2015, from doing business: http://www.doingbusiness.org/data/exploreeconomies/colombia/paying-taxes/

minhacienda. (2014, june 12). http://search.proquest.com.ezproxy.unisabana.edu.co/docview/1534918807/358805D0CC8A4185PQ/4?accountid=45375. Retrieved june 12, 2014, from http://search.proquest.com.ezproxy.unisabana.edu.co/docview/1534918807/358805D0CC8A4185PQ/4?accountid=45375: http://search.proquest.com.ezproxy.unisabana.edu.co/docview/1534918807/358805D0CC8A4185PQ/4?accountid=45375

semana, r. (2014, octover 19). revista semana. Retrieved octover 19, 2013, from revista semana : http://www.semana.com/economia/articulo/crecimiento-economico-departamentos/361568-3