Category Archives: Uncategorized

What to do in 2017 to benefit investors

As you begin winding down your business this year, you might think it’s time to switch off all your faculties to prepare for your much needed rest. But this couldn’t be further from the truth. The end of year is a time to reflect on where you did well and where you could’ve improved. Your shareholders still have their interests tied to your company and profits aren’t going to magically come about through sheer force of will. But you may still need more people to invest in your company. As you close 2016, it’s time look at 2017 as a fresh start and a way to begin finding ways to make your company more attractive to investors.

Who needs investors?

As a business owner, you are obviously aware of the need for investors. But it might be wise to take a few minutes to reflect on this. Businesses seek investors for the same reason any person does: money. By acquiring investors, you are able to use funds to deliver on products or services, ideally netting yourself profits. Of course, there are other options, such as corporate finance. Increasingly, you will find more clients and customers, increase your work and income. Also, the ideal model requires fewer liabilities because profits depend on how much you retain (after liabilities), not how much you earn. By making profits, this benefits you and then benefits the investors. It’s important to remember this when considering what kind of investor you want to approach.   

As Entrepreneur magazine notes:

“It helps to understand how the investors you’re pitching will make money for themselves. The formula for paying investors is often not as simple as taking their return on investment and allocating it equally among the key players. For angel funds, venture capital funds and other investment partnerships, there are often complex formulas for how the individuals involved in managing investments make money. You should keep [this] in mind when developing your fundraising approach.”

They then detail what works for different kinds of investors. It’s important to keep this in mind, plotting your business strategy accordingly. But investors seek what anyone would expect them to seek: a business with smart, data-based plans for growth.

But unpacking this is what will lead you to become more attractive to potential investors.

What investors want in a business

You might think it’s easy to outline a plan and deliver it to investors. But, unfortunately, that’s not sufficient. Speaking to Forbes, investor Barbara Corcoran noted how important very human questions were in determining the direction of her investment.

“She gives them what she calls the ‘lifeboat’ test. She asks herself after a few minutes spent with them, ‘Would I want to be in a lifeboat with this person? Do I like them enough to be in a lifeboat with them? Would they go down with me, or throw me overboard to save themselves?’ What is Barbara really saying? She’s saying she better instinctively trust you. She is looking for is an innate sense of trust that she either feels or doesn’t feel by following her instincts. She admits that it’s not an exact science, but she has always regretted not listening to her gut and it’s cost her money.”

The reason for this has to do, says Corcoran, with honesty. While her methodology might seem unscientific, her reasons are sound. No one wants their money going toward individuals who might swindle you. You need to present yourself as trustworthy, able to show facts and be upfront about your issues.

As CEO Ashwin Kamlani notes: “Tell potential investors both sides of the story. While it may be tempting to only focus on the huge potential that your business has in order to generate excitement, it is equally essential to talk about the weaknesses of the business in order to generate confidence. This might sound counter intuitive, but this shows potential investors that you really know your business, you have thought it through and that you are either prepared, or are preparing for potential threats.”

Anyone can find data points and show the growth of their business. You can even hire professionals to do so. Investors know this, so what they seek are those few who are willing to be open and honest about the direction their business could go. No one believes there exists a perfect business. Just as with everything humans do, there will be flaws somewhere. Showing investors you know where these flaws are doesn’t undermine your business – it shows them you are aware of the flaws and you believe things will work regardless. Or, better yet, you’ve shown them how you can work through the flaws (ideally, to solve them).

The other important element investors find attractive are those dynamics that put your business over the edge. That is, what about you or your business gives you a competitive edge? Why you and not your competition? Figuring this out should be key to all your business plans, of course, but it must be given full force when you present it to investors.

In 2017, investors want to see more honesty and, as the market grows, competitive edge that benefits them. Investors don’t necessarily have to understand every aspect of your goals or strategy, but you need to show them why your business and why you, personally, are the right choice for their investment.

Calculators, crowdfunding, content marketing: Business trends for 2017

No one could predict most of the major events of this year. Few, for example, predicted the American election would take the turn it did. Hardly anyone would’ve said that Britain would be leaving the European Union. Yet, these startling events occurred and had – and will continue to have – a massive impact on business around the world. Looking toward 2017, you should seriously consider what possibilities could occur that could have an impact, negative or positive, on your business. As everyone enters the final parts of this year and is winding down to enjoy some much needed rest, it’s also the best time to begin assessing what trends you can expect to see.

Crowdfunding

There’s little doubt that crowdfunding has, in some cases, been an enormous success. Almost all businesses have relied on raising funds from other people in order to cover startup costs. Crowdfunding, however, doesn’t rely on rich investors or public stocks. Instead, it focuses on small amounts from a large number of people using the reach of the internet, without any claim of ownership (as per shareholders) from backers. Kickstarter, for example, is the most well-known crowdfunding platform. Pebble smartwatch broke records twice, as CNN Tech reports:

“It broke its first record on its first day, when it became the fastest project to raise $1 million – in 49 minutes. A week later, it became the most-funded campaign in Kickstarter’s history after receiving more than $13.3 million in pledges.”

Crowdfunding is so popular, even scientists are turning to it as an alternative to the frustration of seeking grants. Businesses must begin taking crowdfunding seriously, both in terms of how they can raise funds when public stock is not an option and in terms of sudden competitors. Apple, a major corporation, for example, had to contend with the crowdfunded Pebble in the smartwatch industry. If crowdfunding can create that kind of dynamic, it is an area well worth watching.

Calculators

Determining a business’ funds is central to keeping it alive. After all, without that knowledge, you could make decisions that end up harming your business. To that end, more and more businesses will use various kinds of calculators to help them make financial decisions. Whether it’s a car repayment calculator or plant and machinery finance calculator, business owners will continue to use online tools to help them determine their financial status. Before, you would have to shell out enormous amounts of money to obtain this kind of data, but these simple programs let anyone do it almost instantly.

Cost-cutting has become priority for businesses all over the world. As Small Business.co.uk notes:

“Some 58 per cent of UK small and medium-sized enterprises (SMEs) will be prioritising reducing costs in the New Year, according to a study by Liberis. Business owners prioritise reducing costs over expanding their business or developing the skills of their staff. Survey respondents also mention Brexit, rising costs and Donald Trump as challenges that their businesses expect to face in 2017, which may explain why business owners and managers plan to reduce costs next year.”

Therefore, anyway you can reduce costs should be investigated. This is particularly the case if it’s a matter merely of knowing where to reduce costs.

Content marketing

One of the most important parts of business is marketing. However, in an increasingly broad environment with many businesses competing for the same audience, this has proved increasingly difficult. One way that businesses have tried to stay ahead is putting themselves on the first results of Google and other search engines. However, there have been constantly evolving strategies to achieve this. One of these has been content marketing.

As one Forbes writer noted, Tesla have become masters at this.

“Tesla provided articles and videos to help educate me as a consumer, and build trust surrounding the purchase. Through its marketing, Tesla established an innovative brand that helped me conclude that they have a long-term vision and position for the company. As Marcus Sheridan teaches, top companies engage their front-line sales teams to identify topics for content marketing, and the content marketing team helps sales professionals to effectively use content in the sales process.”

This helps drive sales from their content and their website. Google is constantly changing how it ranks websites, meaning marketing teams have had to rethink strategies in order to drive pageviews and therefore higher ranking for specific keywords and terms. In this way, their company comes up when people are looking for the relevant topic. 2017 will see this strategy continue, as more people focus on the complexities of searching online.

In these ways, 2017 is an expansion on what’s occurring at the moment. You need to be constantly on your toes as a business person. Here’s hoping 2017 will be a better year for everyone.

How to manage and foster talent in a work environment

Everyone wants to improve their abilities and have those abilities rewarded. Importantly, businesses should be aware of this in terms of staff management. We don’t merely want people who are good at the job they do now – we want those who are capable of learning more and completing more complicated, higher level tasks later. In this way, we help create the very people we need in upper levels of the business.

We should therefore consider the ways we can foster talent.

Talent management matters

Business owners are often more invested in the business’ day-to-day occurrences and sometimes can’t afford to take resources away from investing in the people they employ. However, this is detrimental to the business. Sometimes, they hire talent management professionals to help. They focus on identifying, developing and retaining leadership talent. They work in coordination with a business’ HR department.

However, as the Harvard Business Review points out:     

“A 2012 EY survey of almost 600 global business executives found that talent management functions often measure the easy things (such as employee retention) while overlooking other factors that are important for organizational success (such as whether the right people, with the right skills, are in the right jobs).”

This doesn’t mean we should negate talent management. But, as experts point out, relying on external efforts negates internal processes. This, as a whole, undermines the growth of the business.

How to manage talent

One of the best ways to develop talent is to track it. Regular reviews about job performance helps to show the direction someone is taking. The problem with focusing on external input is that this negates the internal relationships managers form with workers. Knowing them on a personal levels helps managers know what is best for the employee. They can figure out employees’ interests and align business tasks toward such interests, meaning the employee can feel more fulfilled in the job.

Another important way to encourage development of talent is reward. While ideally workers would focus on their own improvement for their own reasons, we should offer rewards. For example, an increased salary if they attend various courses – whether it’s communication or HR management courses – goes a long way to creating the very people we want. They are more skilled and able to deliver on a number of areas – and because they work for us, we don’t need to search for such people since we’ve, essentially, made them ourselves.  

Keep your business booming

open-sign

Entrepreneurs find it difficult to keep their business going during economic down turns. If you’ve kept your business going for some time, you’re onto something good and you need to keep it that way. The success of your business is determined by many factors, and they all need to include the following into your business model.

Focus on advertising

 

Keep track of what your competitors are doing when it comes to their advertising practises. Perhaps you can use their ideas and make it better for your own use. Don’t see this as stealing ideas, you’re merely reinventing them to work for your business.

 

Focus on new ideas

 

Urge your employees to participate in coming up with new marketing ideas especially those who have completed marketing courses and might have unique insights. You may have an employee who is creatively inclined come up with new concepts that will draw new clients and expand the business. During this time you should organise your business and shine the light on ineffective areas in the company. Don’t let your employees feel pressured into coming up with new strategies, but reiterate it’s the optimum time for team building and to connect with one another when brainstorming.

 

Do charitable work

 

Do a bit of pro-bono work and volunteering every year. Paying forward a good deed is good for business morale. Your charitable work may lead to network opportunities as well as generating new business.

 

Manage excess expenses

 

Keep a positive cash flow and maintain your profitability by cutting on luxury expenses. Avoid becoming comfortable in justifying the numerous luxury expenses your business has. Cut out anything that is not for operational use or at least critical. Treating your employees is a good sentiment for keeping up morale, but work out a budget for this well in advance.

 

Trust your employees

 

Trust your employees to do the work you’ve hired them for. Some business owners take on everything themselves in a bid to have everything “perfect”. Doing so can lead to burnout, divided attention and eventually causing you to make a mistake. You may require someone to do a job where outsourcing may be your only option. Rather spend the extra money and hire a professional to do the job. There are qualified individuals who can balance the books and keep track of the finances.

 

Opening up your first auto parts store

Auto

The auto parts industry is resilient even during times of economic downturn. People may be buying fewer cars, yet they still need to spend money to maintaining their existing vehicles. However, before opening an auto parts store, conduct thorough research of your market. You need competitive prices and your business needs to be located in a location which will produce a lot of foot traffic.

 

Your location

 

As an auto parts retailer the location of your business is vitally important to the progression of your business. Determine where the most foot traffic is for your prospective area of business. Examine the nature of your potential clientele as well as their buying power. Have a look at the surrounding area of business. If your shop is the only one in the area you could be seeing a lot more traffic coming your way. Strategically decide where you set up shop, such as having your store next to a car wash business or a car dealership. You will then be able to sell used Nissan parts or Toyota spares to people who may also be interested in your business.

 

Obtain proper licensing

 

You need to know the different rules and regulations  pertaining to business licensing, permits issuance and business registration. When registering your business to obtain a business license, you’re going to need a sales tax registration as well. This is for the sole purpose of selling auto parts.

 

Identify supply sources

 

The bigger variety of spares you have in supply, the better chance you have at gaining clientele. It may be difficult at first to invest in the right parts. However, start small to see which parts people generally look for. Invest a great amount of money into buying second hand parts which are pretty costly when bought new. This way, people will more often look out for the used parts you have in stock.

 

You can also find auto parts in scrap yards, from cars sold at salvage auctions, or contact insurance agencies to try to buy scrapped vehicles from them at a discounted price. Be sure to educate yourself on the different mechanics of how a car operates in order to choose the right parts to buy. Also, check whether the parts are still operational or whether it should be refurbished to become operational again.