What 2016 tells us about financing a business

If we’ve learned anything from 2016, it’s that there’s plenty business can and must do to help protect themselves from events they could not have foreseen. To that end, it’s worth thinking about what we can do, as business people, to help keep our businesses afloat while the world goes on. Businesses won’t stay up because we want them to, but through hard work. We need to be able to handle what occurs and look out for dangers that might threaten their continued existence. Just as we care for any loved one, we must be mindful of what could pose a threat to businesses – 2016 shows us that many of the biggest dangers could come out of left field. To that end, let’s look at ways to protect our businesses from any possible dangers.

Look for bargains

We make our own success, but it also involves knowing where to find opportunities for that success to blossom. One clear way to make success into a reality rather than a dream is to find the best deals and bargains. For example, here is a detailed way one American finance writer managed to get an expensive electric car reduced in price. Instead of spending $35,000 on a brand-new electric car, he got it for under $14,000. Businesses must look at their financing options in terms of the best way to make the most out of a little – or, perhaps, how to get exorbitant prices reduced.

Beware “gurus”

Nobody can predict the future, yet many make their money off selling their beliefs to businesses desperate for a path. These finance gurus tend to offer vague reasons for their predictions, forcing businesses down paths they would otherwise have never gone. Consider some of the worst financial predictions in history, by some of the smartest people in the world. For example, in 2010, entrepreneur Richard Branson warned that “the next five years will see us face another crunch – the oil crunch,” predicting a severe supply shortage. Of course, six years later, the price of oil is actually lower than it was then. Businesses must on the evidence they have, that will benefit themselves and shareholders, not the words of those who claim to have knowledge they could not possibly have. The smartest people in the world did not think Donald Trump would get elected or that Britain would leave the European Union – yet both of these large events occurred and have dramatically changed the landscape. How many businesses were prepared when these events occurred? How many were protected from the financial fallout? For example, did these companies have protection for their immigrant employees? Did they have proper health coverage (the repeal in America of the Affordable Care Act has left millions without healthcare, meaning they might not be able to work – a reduction in people able to suddenly work will have a massive impact on businesses and therefore the economy).

Be creative

Business people must be more creative than ever, as they go forward. It’s using plant and machinery finance in clever ways to create more jobs, services and so on. It’s creating new advertising campaigns, drawing in younger people, getting active on social media. Creativity means standing out from others, an expression of individuality that draws people in so they want to work with us in various capacities. 2016 showed that creativity is key, especially in a world that is increasingly competitive.

Proper hiring and proper management

Our business is only as good as your least talented staff member. Hiring the best people must be at the top of our list of priorities. Businesses are made of teams, so if one person messes up, it falls sideways and upward. That is, it affects everyone, not just the work of the person who made a mistake. Competency must be paid for and rewarded, which means it is on us to treat our staff properly, doing what we can to retain them for as long as possible.

The longer someone works for us the better for everyone, since this establishes a long-standing dynamic that gives a measure of stability to the constant shifting market. For example, we could listen to various studies that indicate working from home has enormous benefits. Not only do people then feel more inclined to work for us, but their work improves, too. If our concern is that people need rigour and micromanagement in order to complete their work, the failure is ours not theirs – we should not be hiring people who can’t work when left by themselves. Otherwise we’re being teachers and watch dogs, not managers focused on production, ideas and so on. Implementing new strategies for the benefit of staff will go a long way to making a business better than it ever could be.

People are always looking for ways to stay employed after all and no one likes the sense of fear, when leaving. There’s no guarantee any job is forever and the lack of job security is one reason people tend to stay in position longer than before – after all, even advanced degrees are not guarantee we’ll be employed. Yet that shouldn’t stop us as business people putting effort into retaining the staff we do have.

Tips for getting investment capital for startups

Probably one of the greatest challenges for entrepreneurs is cashflow. It’s a surety that many entrepreneurs have spent sleepless nights thinking about the age-old question, ‘How do I find the money to start my business?’. There isn’t any magic to it, and there’s certainly nobody waiting in the wings, ready to throw money at you just because you’ve a new and exciting business idea.

On the flip side of the coin, a new business offers many creative options that simply aren’t available if you were buying a car, home or large consumer item. As an entrepreneur, you’ll need to think long and hard about your options and be tenacious in your approach. If one or two options don’t work for you, there are always other options. So here are a number of ideas that could help you source the money you so desperately crave.

Open your wallet first

Consider using your savings, home equity or retirement accounts. Sure, it’s risky. But if you were risk averse, you probably wouldn’t be an entrepreneur. And if you don’t have the confidence in your own idea, by backing it with some of your own money, then how could you expect investors to? Investors tend to back entrepreneurs with more than just good work ethic.

Seek a loan or line of credit from the bank

Typically speaking, this option won’t be available to new startups unless you’ve got an already established credit history without blemish or existing assets that you’re willing to use as collateral. If, however, you are fortunate enough to have this option open to you, then it’s an incredibly safe and stable form of finance, one that’ll hopefully transfer to your business. This option of corporate finance is, therefore, more attractive for those who already have a relationship with the banks.

Back your bootstraps: Fund yourself

Paying off your business’ financial commitments as you go using the revenue earned from early adopters is certainly one way to balance your business’ resource-finance scale. As a startup entrepreneur, nothing is more scarce (except perhaps sleep). The more you’re able to learn to bootstrap in the beginning, the easier it will be for you to find ways to raise other sources of capital. And the advantage is that you don’t have to relinquish any dividends or control over the idea.

Keep your fixed costs to a minimum: Share office space or equipment as much as possible. Co-locate with another small company, use the computers and servers you have and try and avoid any major capital purchases.

And consider your variable costs as though they were your own money: Seek trade credit agreements with key suppliers, save on travel for business with smart scheduling and teleconferencing – a Skype call is far cheaper than a flight from Cape Town to Joburg, hire interns from local universities or design schools.

Pick those you partner with carefully

As an entrepreneur, there’s nothing quite like finding a supplier, distributor or customer (first prize) who sees your business solution as an absolute necessity and is willing to help foot the bill alongside you. So why not plan for success from the get-go?

It’s far healthier for your business to create relationships and iron out the kinks as you go along, than to try break into already-established relationships once the company is ready to grow.

If your business solution is as critical for the market as you hope it is, then there will be potential early adopters. If they think that you’ve got what they need, they’ll be willing to open their wallets. Early adopters are good in that they provide invaluable perspective on what’s good with the product/service and what needs improving.

Don’t be afraid to try crowdfunding

Exploding Kittens, a simple card game for people who are into kittens and explosions and laser beams and sometimes goats, became the most backed campaign in the history of Kickstarter. If 219,382 people could back a game with $8,782,571, then why not your idea? Crowdfunding is the newest source of funding, where anyone can participate as exemplified in online sites such as the aforementioned Kickstarter. Here people make online pledges to your startup during a campaign, essentially pre-buying your product for later delivery through donations.

Pitch your financial requirements to friends and family

As a general rule, other potential investors will probably already expect you to have some form of commitment from this source as a sign of your credibility. If your friends and family don’t believe you, how can you expect outsiders to? This is the primary source of non-personal funds for very-early start ups. It also offers you a safer, less risky space to practice your pitch.

Of course every option has its pros and cons, and not every one may be available or even attractive to you. Some are difficult for first-time entrepreneurs to swallow. Others simply don’t work for your circumstance. Thus, it’s always a question of what you qualify for and what you’re willing to give up to turn your dream business opportunity into a viable and stable business. Best of luck to you.

Security considerations for small businesses in 2017

Small businesses are not exempt from caring about security. They, too, need to be as invested in what occurs in keeping their data and other aspects of the organisation secure. Though so much of security is often focused on big businesses and major breaches, such as hacking and cyber invasion, there are many aspects to security worth considering. To that end, if you want to be able to protect your businesses from outside interference, in order to actually produce quality work and meet client expectations, it’s important to consider what is happening in terms of security in the future. Businesses must stay ahead of security concerns in order stay ahead of those who would do damage and participate in criminal activities.

Everything is cyber

These days every business understands that being connected is essential. No longer are modern businesses only local, but are branched out into the rest of world. They exist in various forms, communicating through social media, email, website and so on. Even internally, data is stored digitally, people are able to operate and conduct meetings regardless of location. But this internal idea is itself part of the problem. As the American National Cybersecurity Institute noted:

“One of the biggest threats a company has that puts it at risk for an attack or data breach is its internal users. Lack of cybersecurity awareness and training can put organizations at a significantly higher susceptibility to cybercriminals. As Tripwire’s security engineer pointed out, security doesn’t just mean taking measures to prevent the attacks, but providing training and guidance on how to handle incident response in the event that an incident occurs. And this should be done throughout all levels of the organization, especially considering ransomware schemes like spear phishing happen primarily through emailing employees.”

Training is important but so is monitoring. So often when people consider installing, say, CCTV camera or a video wall controller, the assumption that it is to prevent outside interference. But the threats come from inside, too. This can be intentional or negligence. As SC Magazine pointed out:

“[Workers] taking the necessary steps to ensure security in the workplace becomes less of a priority for them as they seek to perform their job functions efficiently. In fact, 40 percent of firms expect a data breach in the next 12 months as a result of employee behavior, and employees indicated a widespread lack of awareness of good cybersecurity practice. The consequence is that over the last year, 78 percent of breaches have originated from within the extended enterprise (including contractors and ex-employees), the report found.”

This is a shocking number. In terms of the future, more businesses must focus on creating policy and training programs to highlight the dangers posed by employees themselves.

Education

Learning new skills and acquiring knowledge is never a bad thing. This is particularly important if, as we noted, employees learn what to do and what not to do in order to minimise any cyber dangers to businesses. Businesses owners must take the necessary steps to help minimise this danger and this means supplying education and courses that can enable their employees to not make any mistakes. Of course, nothing is perfect, but training isn’t about perfection in this case – it’s about reducing the chances of invasion, manipulation and so on from occurring which could threaten the whole company.

For example, you could begin by putting in place policies that minimise or completely restrict mobile devices. As Forsythe notes:  “As smartphones and tablets become constant companions, cyber attackers are using every avenue available to break into them.”

Most of us expect these expensive pieces of tech to be secure. In reality, they are not. With simple equipment, hackers can get in and make use of other, more powerful equipment nearby. For example, says Forsythe, “hackers can gain access to a nearby mobile device in less than 30 seconds and either mirror the device and see everything on it, or install malware that will enable them to siphon data from it at their leisure.”

You can also encourage employers to change their passwords regularly, instituting Two Factor Authentication on all their important accounts. Google, for example, sends a message to your phone when you login to your email from another device or computer. After all, if you suddenly login from somewhere else, that’s a red flag of hacking – since it means someone else is invading your space. But sometimes, of course, it’s just using a new or another device. Sending a quick note to your phone lets you authenticate it. Since hackers don’t have your phone, this is a much more secure method and is recommended by many cybersecurity experts.

HR Trends for 2017

Business culture changes with the times, like so much of the world. One aspect that has dramatically shifted has been how people are viewed and treated within organisations. So often, the idea has been that employees are little more than cogs in the giant machine of production, resulting in a profitable output the benefits those at the top. While some critics of capitalism would claim little has changed, there are at least laws and social norms in place that were not there before. Within this has been a growing engagement with HR (human resource) management, allowing for greater insight into the nature of work and employment. This has led to better work conditions and understanding of what employment means. It’s therefore worth considering what the future of HR could mean and how that could influence business.

What is the point of HR?

There are many aspects required for a business to run. It’s hard to balance the many plates spinning that result in production and ideally profits. This allows employers to pay employees, so that people can continue to pay their bills, pay for education and so on. But this itself still requires management and this is where HR comes in.

As The Balance notes:

“Human Resource Management (HRM) is the function within an organization that focuses on the recruitment of, management of, and providing direction for the people who work in an organization. As you can imagine, all of the processes and programs that are touched by people are part of the HR kingdom.”

A lot of people, especially in smaller businesses think they can get rid of HR departments or managers. After all, they think, if it’s just a matter of hiring and firing, anyone can do it. But that’s not true. As Business 2 Community points out: “There’s a lot more to human resources than hiring and firing. There’s payroll, benefits, performance reviews and more. And you have to make sure you’re doing all of that in compliance with state and federal laws.”

To that end, businesses, regardless of size, would do well to consider HR managers – or, at the very least, send those in positions of power to HR management courses to help improve their knowledge and educate them about what it means to work in such a space. Businesses benefit from proper management – this is simply a statement of fact. Why wouldn’t you want that area, involving the hiring and management of people’s employment done professionally and well, too? Further, if you can alleviate pressure from

The future of HR

Cultural and technological progress will change how the workplace operates in future. To that end, it’s worth considering just how HR itself will change. It might seem strange to think that societal factors will influence how you manage employees, but once you see what does and continues to influence – for example – who does and doesn’t get hired, you will see how HR practice could change.

For example, what kind of culture creates a toxic work environment? Researchers at prestigious institutions have long wanted to know the answer to this question. Fast Company summarises one finding:

“A string of ugly scandals in recent years has hit companies like Zenefits, Wells Fargo, ANZ Bank, Mitsubishi, Volkswagen, Toshiba, and others. What they have in common is that all have been attributed, in one way or another, to a toxic work culture where unethical business practices were encouraged. In most cases, impossibly high standards set by executives and upper management led employees to cut corners (or worse) to reach them.”

In terms of what this means for the future, many HR leaders, executives and managers are talking openly about “culture” in the workplace – looking at what is expected from a top down perspective. As Fast Company put it: “businesses that care about [creating a non-toxic work environment] may look to their HR teams to find ways to have those conversations with all of their employees more meaningfully and more often.” This is due to how the entire company must work to create a better environment. While it is true that the power lies at the top, that still means you can participate even if you are merely an employee. But you need guidance and openness from the an HR department to allow this to happen in the first place.

Another trend will come from analysis. After all, in order to make the best decisions, you need to have the best data. As Forbes notes: “Not only is there a lot of employee data that is becoming available but HR teams also need to understand what to do with that data and how to make sense of it. This requires a deep understanding of analytics and data science. The smart HR teams around the world are staffing up with plenty data, science and analytics professionals to help make sense understand their people better.”

This data is what ties in to the research showing that toxic work environments are actually less productive. Using proper methodology and measurements, you can calculate what and when particular policies were put in place and then the results of that implementation. With the wide variety of ways to capture data about a company these days, HR will be incorporating this data into suggestions and policy it can recommend be implemented throughout a company.

What businesses must know about access control in 2017

Businesses have had to expand and change their operations in dramatic ways in 2016. No one could’ve predicted the various major global shifts that upended the markets. Donald Trump became President-Elect of the United States, troubling many people over the world due to his lack of experience, his horrendous proclamations and his incomprehensible statements. Many did not believe such a person would ever find themselves in the White House. Similarly, no one believed that the British referendum concerning Britain leaving the European Union would be an issue – and, yet, the majority of voters (51.9%) opted to leave (resulting in what’s now known as Brexit). All this has radically changed foreign investment and how businesses will now interact with businesses in these two regions. But another issue has radically made businesses rethink their approach to operations: cybersecurity. Combining all of these has meant that businesses are now approaching 2017 in a new light and it’s worth considering what this means.

Why cybersecurity became a threat in 2016

According to American intelligence agencies, there is little doubt Russian hackers affected the recent US Presidential Election. As Reuters reports:

“James Clapper, the director of national intelligence, said he had a very high level of confidence that Russia hacked Democratic Party and campaign staff email, and disseminated propaganda and fake news aimed at the Nov. 8 election.”

This comes in light of various high level security agencies finding themselves vulnerable to attacks from foreign operators. Indeed, even as high a level as the Joint Chiefs were the victims of hackers, who got into their database.

But it wasn’t only state departments and the military that were targeted. Major corporations like Sony and Yahoo were the targets of various breaches. For Sony, this meant private documents and photographs were released, especially of celebrities. Yahoo found its users’ details were open for theft, which could’ve resulted in identity theft given how little is required to carry out such a crime.

Businesses began taking more aggressive steps to protect themselves and their business. In offices around the world, the password policy began changing – new, improved ways to create a password were used instead of basic, easy-to-hack alternatives.

Cybersecurity ties into bigger concerns about security in general. As Small Business Computing notes:

“A recent study on cloud security—conducted by Forrester Consulting and commissioned by Alert Logic—found that nearly 80 percent of participants saw value in outside security expertise to supplement their security operations. Market-leading security technologies are critical but the best approach to keeping sensitive data—both yours and your customers’—secure, involves a ‘products and services’ approach. This combines cybersecurity technologies with 24×7 security-monitoring by a team of security and compliance experts.”

This itself ties into access control.

What is access control?

People should not have access to everything, at all times, everywhere. Whether it’s because you need to limit customers’ access to stock or not allow staff to use certain data, access control is essential for business.

Various physical barriers are already used often by businesses, such as with man traps. This is, as the name highlights, restricting of individual’s movements. It’s an entire physical barrier that stops people moving into certain areas. As Data Center Journal summarises:

“This “trap” enables security – whether a system or an employee – to verify the credentials of the entrant and either allow access or trigger alerts indicating an unauthorized entry attempt. Mantraps, which are sometimes called security vestibules, are small rooms with two or more doors. Authentication procedures may be required either at just the door to the secure area or at all doors.”

The most common version is simply using two doors, within the secure space. The first door allows a person to enter, then once closed, allows security verification. Then the second door can open once the first is closed and the person has been cleared. This helps slow down entrance into a secure area and ascertains the person is allowed to enter.  

This goes further when you focus on the digital sphere. As Tech Target notes:

“Access control is a security technique that can be used to regulate who or what can view or use resources in a computing environment. There are two main types of access control: physical and logical. Physical access control limits access to campuses, buildings, rooms and physical IT assets. Logical access limits connections to computer networks, system files and data.”

Cybersecurity doesn’t only involve the digital sphere. Physical access itself has ramifications on this. To that end, restricting physical access is also essential. By acting in these aggressive ways, businesses can better prepare themselves for the coming year and a whole host of new dangers it will present. If hackers are targeting the highest offices in America, their biggest, most tech savvy corporations, you can bet they won’t relent when it comes to ordinary people. Considering the average person also loses out when businesses fail, everyone benefits from having increased security measures.