Month: August 2016

5 Things to Consider If You Want To Start a Business

9Starting a business is not an easy task especially if you have limited resources, and coupled with the economy downtime experienced by the world. Starting a business involves skills, being open minded, flexible and finally knowing what you’re doing and where you want to be. The main goal of every entrepreneur is to succeed, though success doesn’t come easy. Success in businesses is worked on and it doesn’t come overnight, it requires a lot of strategic planning, persistence and determination. However, if you want to start a business below are 5 things to consider;

  1. Getting the primary skills; if you only possess basic skills and not the primary skills needed for your startup business, you can either work with  or employ someone with the primary skills
  2. Before starting a business, you need to know how to sell your brand. If you want your new business to survive the tight economy, you must know the art of selling.
  3. Know who to put I your team; starting a business makes you a boss and a leader, the people you involve and how well you lead them determines the success of your business,
  4. Consider what your market strategy will be; know how to spread the word about your business out there as well as create that needed buzz. This requires personal research and hard work.
  5. Funding; think of how you intend to fund this new business of yours, how to pay yourself and your workers. This is the scary part of starting a business, so you need to research more and learn how to fully maximize the benefits of your tax.

Starting a new business takes intelligence, bravery, and endless hours of hard-work, hence you have to properly consider your options and know the height you intend to take the business.

How to Start a Home Business Quickly

Barefoot woman using laptop on floor

Barefoot woman using laptop on floor

A home business is the quickest and easiest type of business. Most successful business today started from the home. To begin a new business that will be successful eventually, you don’t necessarily need a big space or a huge amount of money. All you need to have is a unique and good idea with a space, then you are ready to go!

However in recent times, a home business requires certain tips to take it to the next level. Below are some tips on how to start a home business quickly;

  • Be in tune with technological developments; this is a major player in any home business because it lets you operate your business anywhere in the world, from the little space in your home.
  • Make your business practices as professional as possible; just because your business is at home doesn’t mean you should be laid back, treat your business as if you’re operating from the office. This will help you be more professional and move forward.
  • Set up a proper bookkeeping system where you track the business expenses and income. Also endeavor to separate the business account from your personal expenses. It’s not a good idea to combine business and personal expenses.
  • Be security conscious; It’s best to rent a postal box for your business’s mailing address especially if you’ll be alone majority of the time.
  • Last but not the least; try setting-up a business- aura as well as work environment in your home space. You need to get space solely for your home business. Separate your home from your home-office, to work without distractions.

Though home businesses were not taken seriously in the past, it’s not the case anymore as home businesses are now the fastest growing type of business today.  People in general tend to love the idea of being their own boss and working from the comfort of their homes.

The Art of Picking Winners: How to Choose Which Startups to invest in

The art of figuring out if a business will be successful and worth investing is not an easy task, coupled with the massive amount of stagnant startups out there. Though there are lots of new businesses out there with little or no green-light regarding future success or profitability, there are still some ways you can pick a wining business and choose a startup to invest in without regrets.

Below are 4 major tips on how to choose which startups to invest in…

  • Examine the business idea; is it unique or potential money making idea? Are there competitors? What is the business’s advantage over other businesses in the same line? Also how can the business standout? Once you’ve answers these questions, you can tell whether to invest or not.
  • Find out if it’s a good business and can it potentially generate long term returns on capital. From your experiences , research and findings, you should know the status of the business you want to invest into, which is important in making such a risky decision
  • While analyzing the new business, ask yourself if it’s something you can help build up effectively that will yield a positive result on the long run. If you survey the business and see it as something you can’t work with, it’s best to desist from investing in it.
  • Also consider the ability of the business to produce major returns against the running cost of the business. You need to see the past records of the business in terms of growth and profitability. The key to any successful business is its ability to make profit.

Investing in a new business is a big deal; hence you need to make sure you do your homework in terms of proper research and investigation before putting a penny into that business.

7 key financial ratios every startup should know

6You should have a good financial knowledge to succeed with a startup even though you have wonderful products lined up, good SEO, fantastic sales, efficient marketing model etc. You cannot just undermine the knowledge of finance while running a business. Along with this knowledge on financial rations is essential for establishing a successful company. This knowledge should rank you up as a smart entrepreneur and investor as you will have sufficient vision for your future company. Below are seven key financial ratios you need to know.

  1. Ratio for working capital

This particular ratio points at the company’s ability to bear its debts using sufficient assets. This ratio is of current liabilities.

  1. Debt and equity ratio

This ratio calculates the organization’s entire financial leverage. People measure this using the entire liabilities. It can not only be applied to financial statements that are personal, but also those of corporate ones. The company’s total debt and its total equity ratio should not more than one and a half. Anything more than this should be avoided.

  1. Margin ratio of gross profit

This ratio is the figure that shows the overall health of the company after a certain cost, namely COGS, is cut off. The ratio shows how much money is profited from any amount earned.

  1. Margin ratio for net profit

The company’s earning depends a lot on the sales. The margin ratio for net profit shows the figure of company’s net profit for each dollar it earns in sales.

  1. Turnover ratio

This ratio simply measures the firm’s efficiency in using its assets. You need to divide the number of sales by the receivable accounts to get the ratio.

  1. Investment ratio payback

This particular ratio would measure the investment efficiency.

  1. Equity ratio payback

This ratio calculates the company’s profitability with the resources and money invested by the shareholders.

These are seven main financial ratios all startups should know.

The steps to Equity Investment in Early Stage and Startup

Equity - Dictionary Series

Equity – Dictionary Series

All companies need to start with an idea. To realize the dream of a successful company and leading a small startup attempt to that level you must need funding. This will not only grow confidence in you but also help expand your company. However, the traditional funding is done with the help of bank loans or personal loans. These loans often have high interest rate which can take a toll on the long run. In such situation equity investment comes very handy and reliable. Initially equity purchasing appear as creation of debt, but at a later stage it can be transformed as company shares. Let us discuss the steps of equity investment.

Pre-seed step

Pre-seed funding is the primary stage in terms of equity investment. It is usually done at the initial stage of your startup business. At this stage you might not have a large number of employees working for you, or as less as you and the other partners. Usually commercial banks do not show interest in providing loans at such stage. Alternatively, incubators may also help funding at this point. Their help may come in the form of support services.

Seed step

At this step friendly investors along with initial-stage VCs may invest in the startup and provide aid to enhance the development. With money the startup starts to grow at this level. What you should do is allocating the resources in such a manner that boosts the company even more. More marketing policies can be taken.

Valuation

Using pre-money and post-money valuation you need to determine the actual value of the company. This will focus on gross margin and flow of cash.

Capitalization Table

A capitalization table needs to be assembled at this point after the valuation.

The above mentioned steps are towards equity investment in the early stage of Startup.

Scroll to top