How to Calculate Free Cash Flow for your Business Health

Free Cash Flow

Free cash flow is one of the key indicators used to show the health of the business, particularly its profitability. Typically, it demonstrates the amount of money any business for other purposes after all the capital expenditures that may include equipment, buildings and various other necessary expenses that help businesses sustain their operations.

Although calculating cash flow is a complicated process, there are many ways you can do it. According to experts, it is always better to use all methods correctly. If they all generate the same result, it provides you a reliable way to cross-check your operations.

It is worth noting here that cash flow doesn’t relate to all businesses. It is precisely a measuring tool that non-financial firms use rather than professional associations and investment firms.  If you own a non-financial enterprise, you can calculate the cash flow for free with these three equations.

Equations to Calculate Free Cash Flow

1.       Free Cash flow:  Subtract operation taxes and costs from Sales revenues then subtract required investments for operation capital

The equation is one of the easiest ways to calculate free cash flow. Business owners take sales revenues, including taxes and operating costs from their income statement. The fixed assets show an increase when you invest in new operating capita. The balance sheet shows everything from investments and revenue details.

For example, if your business has earned revenues of $500,000, the amount is reduced to $300,000 because of taxes due and operating costs. If your business requires an investment of $150, 000, it will have the free cash flow of $30,000 to $50, 000.

2.      Free Cash flow:  Subtract net investments in operating capital from net operating profits NOPAT (after taxes)

 NOPAT refers to the same figure we used in the previous equation: subtract operating taxes and costs from sales revenues. Net investment of operating capital uses the same figure that is used in the third term of first calculations. For calculating free cash flow through this equation, it is better to use the increased fixed assets on your balance sheet.

That means, your NOPAT will remain at the same amount of $30,000. You just need to exchange the required investment of your business in operating capital for your net investments in operating capital.  If you assume the same figures, your free cash flow will remain the same.

3.      Free Cash flow:  Subtract capital expenditure from the net cash flow of operations

 You can also calculate free cash flow by subtracting the capital expenditure from the net cash flow that comes from operations.  Net cash flow in this equation comes from the cash flow statement, while capital expenditure is taken from the increase in the business’s fixed assets.  For instance, if your operation’s net cash flow is around $200,000, the figure might be reduced by your capital expenditures.

Interestingly, all these free cash flow calculation methods will give you the same answers when you work with these equations. You might feel like approaching the same information and data from three different angles.

How does Free Cash Flow Calculation Affect Your Business?

As mentioned earlier, free cash flow is useful for the health of your business. Firms with healthy free cash flow are financially stable to meet the bills and investments every month. Plus, they also have leftover funds that they usually distribute among dividends and shareholders. Man firms use this extra fund to seize opportunities to help them generate more revenues through acquisitions of innovative products.

That is to say, if your business is booming and has high free cash flow, it is an indication that it is doing well and you should consider expanding it. Conversely, if it fails to generate good free cash flow, you might need to consider restructuring it as there are remaining funds after the basic expenses.

However, it is important to understand that poor free cash flow doesn’t always indicate a failing business. It might be expected even when your business is pursuing growth. Development and acquisition of new products are temporarily subtracted from the main capital. That is the reason why most of the investors tend to work with the businesses that have high free cash flow. These businesses are generally considered healthy with bright prospects. If an investor finds a business that has rising free cash flow with an undervalued share cost, it may be a great investment bet.

How can you Benefit from the Free Cash Flow

Since you understand how positive free cash flow may benefit you by indicating the healthy financial status of your business, it is better to use this understanding to your advantage. It is always better to look beyond the figures. Know that established firms have relatively consistent and healthy free cash flow. New businesses, on the other hand, are in a state where they need to pour money into growth and stabilization.

Although it depends on the business owners how they use the free cash flow, using the funds to expand the operations, pay shareholders and dividends, invest in new products, research or to reduce debt is beneficial for the business.

Always remember that companies that have surging free cash flow due to debt elimination, dividend distributions, cost reductions, efficiency improvements, or revenue growth can reward their investors in the future.

In other scenarios, when free cash flow is shrinking, businesses fail to sustain their growth earnings. Not only this, insufficient free cash flow for growth forces a business to boost debt levels. In a worse scenario, a business without enough free cash flow may not even have the liquidity to sustain.

Final Thoughts

All in all, it is important to find an all-purpose tool that can help you test the fundamentals of your business that seem elusive. Free cash flow calculation is like a performance metric they provide entrepreneurs an opportunity to guard up if their business is not generating enough revenues.

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Business Credit Card vs. Business Loan: How to Choose?

If you have long been looking for business funds, the multiple business financing options must have overwhelmed you. Many entrepreneurs don’t want to involve outside investors to raise capital for their lean startups to avoid entailing risks such as misaligned structure and timeline.

If you are one of them, business credit cards and business loans are some of the readily available options for you. Plus, these financing options are widely accessible for the entrepreneurs who want to self-finance their business.

Regardless of what options you choose, understanding their pros and cons is essential. But before we plunge into the details, let’s quickly split the difference between business credit cards and business loan to help you choose the most appropriate option for your business.

What Is the Difference between Business Credit Card and Business Loans

No doubt, it is one of the common questions that come to mind when it is about funding your startup. Typically, a business loan refers to a lump sum amount you are paid out that you need to pay back in the form of monthly installment over a specified period. A business credit card, on the other hand, is a credit line that allows you access to money or funds to a certain limit on a recurring basis. This credit line, like another credit amount, can be paid off through monthly payments or over any period of your choice unless you meet the credit limit of each month.

Business loans are generally installment debts; however, business credit cards are revolving debts. Although neither of these options hurt your personal credit scores in the long term if you pay them on time, it is worth noting that business credit card has more potential to affect your credit card scores.  If not paid on time, revolving debt may decrease debt to credit ratio.

Moreover, business loans undeniably offer large sums of funds and may have a lower interest rate as compared to business credit cards. However, qualifying for them is nerve-wrecking since the lending process is unnecessarily long and can take months.

Alternatively, business credit cards can offer you immediate access to funds or cash you need to invest in yours.  While their interest rate tends to be higher, you have an option to pay off your full bill each month. Besides this, the best business credit cards provide a slew of other reimbursements such as credit rewards, purchase protections, and perks that can particularly benefit business owners.

Business Credit Card or Business Loan- Which Can You Get Easily?

Having good credit card scores are necessary to qualify for both business credit cards and business loans.   In addition to that, to initiate the funding process, you will be asked to apply, along with the documentation showing your revenues. However, documentation for business loans tends to be more extensive and hectic. Not only this, you may find requirements for business loans stricter in terms of business profitability and length of time.

Overall, qualifying for business loans is more difficult than getting funds through business credit cards. The requirements become even more challenging to meet if your credit scores are low or you are a startup.

Luckily, Small Business Administration offers loans for startups. Although traditional lenders invest in these government-backed loans, guarantees up to 50% percent of the loan to make the process easier.

Comparison between Business Credit Cards and Small Business Loans

There is no easy answer to the question of whether one should opt for a business credit card or business loans. As mentioned earlier, to choose the best funding option, you need to compare the best features of each alternative.

Features Business Credit
Cards
Business Loans  
Loan amount Up to $50,000 Up to $5million
Loan type Revolving credit line Installment loan
Repayment Monthly payments to the minimum credit limit to pay off a debt to avoid high interest Set payments to be paid monthly over a specified time that can go up to 25 years
Average APR 13 to 20 percent 8 to 10 percent
Eligibility  Steady income and personal credit history  Good  business revenue model and credit
Approval Time Seven days  Weeks or a minimum of six months
Benefits  Sign up bonuses, reward programs,  purchase protection, trip insurance Government-backed loans

Business Credit Card or Business Loan: What is the best Option for You?

You have compared the features of both options; it is the right time to decide which works best for you.        

Business loans are Ideal for your business if you;

  • Need large sums of funds
  • Want investment for profit-generating projects that include purchasing equipment hiring staff or renting new locations
  • Want to expand an established business that generates revenues up to 100,000

Business Credit Cards are ideal for your business if you

  • are looking for options to separate finances  or sole proprietor
  • Want to use the payment option that comes with big rewards
  • Need to access cash immediately
  • Do not want to borrow money and need a payment option that allows you to pay in a month
  • Want to invest in a project that has 0 percent introductory APR and plans to make payments before its promotional period deadline

Factors to consider while Choosing Business Credit Cards and Business Loans

Your job is not done after you decide which option you want to choose and why.  There are certain factors you need to consider to make a safe choice.

  • Interest Rate–   it is important to choose the option that has a low-interest rate. The interest rate in loans and credit cards are compounding, and you will end up wasting a lot of money if you are not diligent.
  • Other fees–   choosing a business credit card means you will have to pay annual fees, foreign transaction charges, and late payment charges
  • Eligibility– applying for consecutive loans or credit cards may ding your personal credit scores by resulting in the new inquiry.  

Final Thoughts

Overall, both financing options come with their perks and downsides. Given that, it is up to you when it comes to making the decision that meets the requirement of your small business.

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Get Matched with a Credit Card!

These Are the Reasons You Are Struggling With Sales

Converting sales is a difficult task for any business but for some, it’s much harder. Whether you’re a B2C or B2B company, your sales team works tirelessly to reach their quota and help the business achieve its goals. However, no matter how hard they work, it seems like your sales team can’t lure in enough willing buyers. You know what they say, work smarter, not harder.

It doesn’t matter how much effort you are putting into the sales operation; it won’t make a difference if you’re going in the wrong direction. There are reasons why your company is struggling with making sales, and you need to understand them before coming o a solution.

You Haven’t Adapted To Change

The economic climate changes whenever a new wave of innovation and technology hits. Hence, if your business isn’t making as many sales as before, it might be because you are using obsolete systems. Ever since the proliferation of social media, analytics, and big data has come onto the scene, things have changed.

To get ahead of competitors, it’s crucial that your company adapt to these changes. Take big data and analytics, for instance. Many companies still haven’t embraced the importance of data and trends that you can derive from it. Once you do, you’ll begin to understand many things; why a sales drive failed, why you’re losing customers, and what makes a marketing campaign powerful.

You’re Putting a Cap on Commissions

For your sales team, motivation is knowing that, on a good day, they can take home a huge commission without worrying about capping. Capping commissions can stop your sales team from closing more sales and striving to go higher than a specific quota. Numerous studies prove that putting a cap on commissions can hurt overall revenue and productivity.

The results of such studies conclude that companies should remove caps from commissions. Once respective companies did so, they saw their revenue rise by almost ten percent. So don’t worry about having to pay your sales representatives large commissions, because they probably helped your company make a huge profit.

You’re Not Following Up On Every Lead

Sales representatives seem to lose their enthusiasm to follow up with every lead they come across. Instead, they only work towards ones they feel like they can convert. This guesswork makes things very confusing, especially since your sales team is relying on their gut feeling rather than an objective factor.

Take out records of how much your sales team has followed up with old leads. The reason for poor sales could be that they are ignoring certain leads, which results in your company closing fewer sales. It’s crucial that you remember how every consumer is a potential customer in one way or another, so it’s best never to ignore a lead.

Inadequate Marketing

All parts of a business have to work together to drive sales and boost customer retention. The marketing department of a company plays an integral role in giving sales representatives the leads they need. It often happens that a marketing team is unable to deliver qualified leads to sales representatives.

This step hurts your company’s numbers, and you need to improve by improving marketing efforts. This process can involve launching a well-planned Google AdWords campaign and other solutions that have the potential to boost sales.

You’re Unaware of Competition

Even though you’re looking at your competitor’s numbers, there’s a chance that you aren’t learning what they’re doing right. A large part of your understanding should come from what our competitors are doing. You need to invest in research and data about rival companies who have better sales numbers than you.

This research can provide you with valuable insight that determines what you’re doing wrong. Although you don’t have to imitate your competitors, there’s always something you can learn from them, and that’s not a bad thing.

No Training Programs

The only way for a company to go forward is if it invests significant time and resources into improving its employees. It’s unrealistic to expect your sales representatives to learn new things on a job that’s so demanding. When they’re following up on leads throughout the day, your employees won’t be interested in learning about new findings from sales research papers.

That’s why you need to build their skill set by bringing in the right expert. Sales mentors are one way that large corporations are boosting their numbers. Hiring an expert on sales is a valuable initiative that you can take, to improve your firm’s numbers. A sales mentorship also increases morale and helps your representatives develop stronger relationships with their colleagues.

Your Sales Team Lacks a Process

In every company’s sales department, leaders have to develop a process, which representatives should use to make a sale. When there’s no sales process in place, your representatives could be mindlessly trying to chase after leads without examining any weaknesses. At this point, it’s possible that your team is implementing a random process, so even an informal one will yield better results.

Instead of letting representatives do whatever they want, however, they want to do it, sales leaders should begin by establishing an informal process as to how they should get things done. Once you follow leads in a way that’s systematic and consistent, you can move from an informal process to a formal and dynamic one.

Conclusion

Therefore, now that I’ve listed out what your company’s sales team could be doing wrong, it’s time to recap what you should be doing to solve the problem. For starters, you need to adapt to changing climates of the industry by implementing new technology and software.

Next, you need to rethink the cap on commissions and improve your marketing strategy. After that, you should learn about your competitor’s solutions and try to understand the theories behind them. Assign focused and dedicated sales leaders to your department so they can implement a sales process. In addition, most importantly, there should be sales training and mentorship programs in place to enhances your sales representatives’ productivity.

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How New Office Layouts Boost Productivity?

There is no denying that office layout is one of the significant contributing factors when it comes to improving business productivity. Helene Segura, a productivity consultant, stated that she has identified several issues with her clients related to client’s efficiency that is rooted in office setup and time management.

According to her, the lack of productivity is directly related to workspace set up. Gallup in its State of Global Workplace report found that 51 percent of workers fail to engage with work due to a dull office interior.

17 percent of workers stated that they were disengaged and that affected their productivity adversely. The statistics indicate that this dismal state is typically caused by office layout and can be one of the reasons for the decline in productivity.

To put it simply, workplace happiness can make a huge difference when it is about maintaining work performance. Office layouts can change the way we work. The Ethonomic’s author believes that you can change the value of your offices just by changing the approach to office design.

Having said that, here we have enumerated a few reasons why office layouts can boost the productivity of workers.

Effects of Office Layout

1.     Creativity with Space

Creative office space doesn’t only mean that employees want a lavish multi-story building to improve productivity. If you creatively design your office space, it can change the work approach of your employees. That means workers should have access to collaborative spaces, private meeting rooms, and most importantly natural light.

All these elements play a critical role in increasing employee satisfaction and productivity. These open spaces allow workers to move around freely and they will not feel tied to their desks. Plus, it will create more opportunities for workers to collaborate with each other.

2.     Productivity

There is no doubt that when you work at a place that has an interesting and beautiful layout, you feel reinvigorated. It definitely has a positive effect on your work productivity. However, if the office layout has dingy lighting, colorless walls and isolated cubicles, it creates an environment that is off-putting and uninspiring.

That is to say, investing to improve the ambiance of your office space is important as it can uplift the overall mood. This way, workers will feel motivated and energetic and look forward to their work. The pleasant workspace boosts both worker’s creativity as well as productivity.

3.     An opportunity to Collaborate

Whether you agree or not innovative and creative office layouts can shake things up. It can definitely diminish the effects of monotony and enable employees to maximize their work strength. Employees gradually adapt themselves, according to the work environment.

That means if the work environment is not isolated and employees work collaboratively, it adds to their creativity. Different departments can bounce off multiple creative ideas by working together. It is a great way to make a decision and solve problems.

Modern Office Layouts to Boost Productivity

The attractive office layouts are of paramount importance to retain workers. Modern office designs promise rich amenities and creative spaces to enhance employees’ lives. Most new office buildings, in this regard, internalize the amenities and products that employees use to seek externally.

With time, these trends have become common and prevalent.  Amenity-rich office spaces provide comfort to employees, who struggle not only physically, but also mentally due to time constraints

Considering this, here we have enlisted a few modern house amenities to help you make your workspace productive.

·   Modern Lobbies

The tranquilized and peaceful environment can undeniably have a great impact on employees work productivity. Employees, whether current or prospective, form an impression of their workspace by building lobbies.

If there are chaotic streetscapes, crowded atmosphere, and loud environment, it affects the psychology of workers. Spacious and quiet environments, on the other hand, enhance the productivity of workers.

·   Open Floor plans

It is essential for office buildings to be flexible and owners should invest in the right infrastructure. It can only happen when you recognize the needs of your workers and provide them an open, collaborative space with better communal areas.

It can immensely boost their work productivity. Furthermore, it inspires employees’ sense of well-being and makes them feel stress free and motivated.

·    Flexible layouts

It is hard to deny that the modern workforce is more energetic and not static. There has been a significant rise in startups and remote workers in the past two decades. That has increased the demand for flexible designs for office spaces.

One way you can incorporate this modern amenity into your office design is to design spaces that are not static.

For example, workstations that can be converted into standing desks, open lounges, meeting rooms, and movable walls make a great flexible office layout. Not only is it an excellent way to redesign your office space, but also to expand it. This way you can provide more convenience to your workers when it is needed.

·    Employees’ Health

There is no way to boost productivity if employers do not consider the health of the workers while deciding on the workspace infrastructure. That means if your office layout does not promote a healthy lifestyle, boosting work productivity is difficult.

By a healthy lifestyle, we mean full-service canteens or cafeterias, natural light and amenities like go-and -grab meals. Plus, office layouts should be spacious enough for meetings and free walk. The best office layouts have sit-stand desks that have a great impact on work productivity.

·    Nature

Workers spend not less than eight hours in a day inside the office that deprives them of natural light.   That is what makes choosing an office design that is airy,  open and green extremely important to boost cognition. The design trend that connects employees with nature has a powerful impact on work productivity.

Bottom Line

To a small extent, there is no doubt that amenity -rich office spaces are not just for visual appeal, but also have an optimal effect on the productivity of your workers. Thus, modern layout of the workplace can really make a huge difference in improving the productivity of your workers.

 

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The Distributed Team and How It Can Benefit Your Company

Distributed teams or distributed workforce is not a new concept for entrepreneurs. However, with dynamic technology, the business world underwent a revolution and with it the concept of distributed teams. Today, employees have a plethora of options to work from different places and this changed traditional organizational models.

A number of companies follow an organizational model using which they distribute a significant percentage of employees. Despite the fact that the structure involves multiple challenges, businesses cannot ignore the critical benefits this concept entails.

If you are an entrepreneur and looking for a strong organizational model to improve your work pattern, here is what you need to know about a distributed team and its benefits:

Work Style Evolution

In the traditional setup of offices, people work together under one roof. There is no denying that this is one of the efficient ways to work when employees are present in an in-house setup. As mentioned earlier, things changed and traditional models saw an evolution in terms of the working environment.

That means now working in a strict schedule with a little flexibility is not a requirement anymore. The tech world offers plenty of choices for both companies and employees to work with flexible hours.  Many workers now have the option to work remotely as long as they are meeting the work requirements. Employees have a lot of freedom to work from wherever they want, making the most of their flexible working hours.

By tailoring this workforce, companies are now able to match the work stream as well as employees working style. That means the organizations that support the concept of distributed teams attract top talent as well as stay competitive.

Why A Distributed Team Is Beneficial For Companies?

This might sound surprising to you but the concept of a distributed team does not only facilitate employees. It has a myriad of benefits when it comes to retaining employees and building a strong team.

Talent Beyond Geographic Boundaries

This is one of the most significant benefits of a distributed team. It makes hiring a skilled individual who lives in different parts of the world extremely easy. Employers can open a remote position for anyone wishing to work from home or any other part of the world.

This means now organizations can easily find a bigger pool of qualified employees if they are willing to become remote workers. Companies no longer face restrictions in terms of hiring candidates living in the same city.  Distance does not matter, as talent hunt becomes easy and efficient.

Build a Team with the Talent You Want

No matter if your business deals in highly competitive areas and requires people who are truly professional and dedicated. Distributed teams enable you to recruit talent that can meet the demands of your challenging work.

The Team Has an Incredible Amount of Freedom

This benefit is significant when it comes to enumerating the advantages of distributing teams. Being a part of a distributed team does not only save commute time but also gives an incredible amount of freedom to employees. They have plenty of time to travel, spend time with family and participate in several other leisure activities. It is all because the working hours are flexible and the team member gets a chance to balance their work and family while sustaining productivity.

Better Coverage

Working with a team spread across different regions and time zones provides businesses with a great ability to have better coverage in this global environment. With distributed teams, there is no need to make employees work in different shifts for providing sufficient coverage. Businesses can hire team members and place them in various strategic locations to solve the issue.

Provides Headcount Affordably

Although cost-saving is not the only reason to create a distributed team, it can help you save a lot of money. This means if your office location is expensive and you are already paying high wages, there is no need to expand the office space. You can rely on a distributed team to complete your work without having to pay for office space.

Work-Life Balance

There is no doubt that a well-managed team has a way more high morale than employees working with a fixed schedule. This is simply because team members do not have to compromise their personal life to achieve their professional goals.

Increased Productivity

Working in a peaceful atmosphere without distractions results in a better quality of work. Although calls, notifications, Skype or emails can distract you, you can easily manage them.

A Chance to Create a Diverse Team

Cultural diversity in the distribute teams play a critical role when it comes to thinking out of the box or demonstrating creativity. A number of studies show that diversity in teams brings out their best in terms of unconventional solutions and adopting new ideas.  It is an excellent way to create an innovative team.

Provide Flexibility

As mentioned above, one of the major benefits of having a distributed team is it gives employees more flexibility to work. It does not only facilitate workers in managing their personal schedule but also work.  For example, if a team member has to travel somewhere or change geographic location, the team structure accommodates it without losing that employee.

Fewer Overheads

Another potential benefit a distributed team provides to a company is lower overheads. This means companies can be a bit leaner with no office space rent, furniture cost, electricity cost, water cooler, and other expenses.

However, you cannot exclude the travel cost when an in-person meeting is necessary with a team member but even then it is way more affordable than a conventional in-office working model. Decide on a common meeting place and make this process cost-efficient.

Final Thoughts

To a small extent, work flexibility, better productivity, global coverage, and many personal benefits make distributed team one of the best business models any company may choose. It is an easy way to work with a happier workforce.

 

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How to Hire a Professional Remote Employee

Commercialized use of technology is rapidly changing conventional operations across industries. Complete sectors, such as schools and offices, are taking a digital turn. Hence, the concept of remote workers is on the rise.

Working remotely allows professionals to work outside the traditional office space. This idea revolves around the notion that individuals do not need a designated office space to perform their tasks. Instead, they have the flexibility to work from anywhere in the world as long as they effectively meet their deadlines.

There are different ways people prefer to work remotely. For instance, some people work from home most of the time but occasionally report to their offices for in-person meeting or follow-ups. Meanwhile, others choose to either work in co-working spaces or the complete opposite: hit the road to be their most productive self.

Remote employment bears mutual benefits for employers and employees. Employees relish their flexible lifestyle, which allows them to maintain a work-life balance. This is a contributing factor in maintaining good health, mentally and physically, as they bear comparatively less stress. A recent study found that remote employees, in comparison to regular employees, are 69% more punctual with their work.

According to a survey conducted by SurePayroll, 86% of participants stated they happen to be their most productive self when they work alone in a relaxed environment. Furthermore, 66% of managers stated they receive better quality of work from employees who work from home.

Indeed, increased productivity from remote employees benefits employers and employees. Employees feel more passionate about their work when they derive a certain level of inspiration from their surroundings. Meanwhile, from a diverse group of people, employers yield greater profits with better quality of work.

Furthermore, employers don’t limit themselves to a specific area to acquire talent, in comparison. They have the advantage to work with the best minds around the globe. However, many times, employers face a number of challenges when hiring remote employees.

Here are some ways an organization can hire competent remote employees:

Evaluate Organization’s Processes and Goals

Assessing processes and goals of the organization will help determine its current potential, and the targets they want to achieve. This will give a clear picture of the type of remote employees they are looking for and where they can find them.

Even though many employers use Craigslist to post their jobs, leading organizations employ a variety of job portals and social networks to reach the ideal candidates. The most commonly used job boards are Flexjobs, We work remotely, Working Nomads, and RemoteOK. On the other hand, Work From, Nomad List, Digital Nomad Jobs, and Remote & Travel Jobs, are popular social networks for filling remote vacancies.

Plan and Execute a Recruitment Process

The recruitment process of traditional employees consists of five phases; i) recruitment planning, ii) strategy development, iii) searching, iv) screening, and v) short-listing. Organizations tend to modify these phases as per their requirement.

Moreover, telephonic conversations and virtual interviews were the only sources used by recruiters to assess their pool of candidates. Today, organizations tend to use a variety of tools to assist in the hiring process.

For instance, recruiters commonly use Spark Hire, jobma and HireVue for conducting effective interviews. These tools enable recruiters to schedule interviews in different time-zones as employers can send their questions and candidates answer them in their own time. This way, recruiters can make viable decisions by comparing candidates thoroughly.

Most often, employers tend to make some common mistakes that render the recruitment process ineffective. These mistakes include no face-to-face contact, asking unfitted interview questions with no considerations for cross-borders, and speeding up the process of skipping skills assessments.

List All the Required Characteristics

Organizations should know the exact qualities they are looking for in remote employees. Attention to detail, self-starters, and professionalism are some of the most sought-after traits by employers in remote candidates.

To cover for the physical aspect of evaluation, employers tend to use a variety of tools to identify candidates from a cultural aspect. Tools, such as ThriveMap, Saberr, and Human, are a great way to determine if the candidate will be a good fit for the organization’s culture.

These data-driven and artificially intelligent tools not only assist in estimating candidates behavioral approach but remove any kind of biasness that can influence decision making due to cultural differences.

Moreover, to verify the information a candidate provides, organizations should ask for referrals. Eventually, referrals are the most effective way to verify a candidate’s profile from someone who has had direct interaction.

Make Unambiguous Contracts

Employers should make a clear offer to candidates who have all the necessary information from timing, salary package, legal rights of both the parties, and so on. This way, there is no room for any discrepancies, and employer and employees are able to proceed with their dealings in a systematic manner.

Moreover, unambiguous contracts are a great way to ensure that either party’s rights are not violated in the process and they are able to yield mutual benefits out of their transactions.

Manage and Retain Hires

Hiring remote employees is a long and tedious process that consumes organizations’ precious time and resources. Therefore, wise employers tend to work on their plan to retain remote employees during the hiring process.

Since employers have to compete with physical limitations to keep remote employees satisfied, they adopt a variety of different monetary and non-monetary approaches to compensate. For instance, providing an attractive salary regardless of the exchange rate is one way to retain their employees.

Other meaningful benefits include memberships to co-working spaces, insurance, and professional development. Most often, employers ask their remote employees for the kind of perks they will find most useful and reward them accordingly.

The concept of remote employment brings numerous monetary and non-monetary benefits to both the organization and individuals. However, both remote employees and employers need to understand that their interaction requires a similar level of professionalism as is prevalent in conventional workplaces. With the right set of practices, remote employment proves mutually beneficial.

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How Micro-influencers can Enhance Your Digital Marketing Strategy

You do not need a million followers to become influential when it comes to promoting your business or brand. The concept of micro-influencers seems to have grown in popularity in the past few years. Micro-influencer marketing is gradually turning the idea that a marketer has to be well- known in order to have influence or make a lasting impression.

But what does the term micro-influencer refers to and how does it help entrepreneurs in their bending moments or in improving their marketing strategy?

What are Micro-influencers?

It might sound bizarre, but micro-influencers are considered ‘everyday people’. The strategy is incorporated to promote specific brands or products on social media. This product can be anything from cosmetics, cleanser to assortments and clothing.

That is to say, if your brand  has been trying its best to leverage influencer marketing with the help of established influencers who have significant number of followers (100,000  fans) on various social media platforms, such as Twitter, Instagram, and Facebook, but still struggling to achieve the desired results,  micro-influencer marketing is worth trying.

However, there is no fixed definition of the term micro-influence, but it is explained as someone who’s small, but has a significantly higher following. For example, they have more than 20,000 followers on Twitter, and a few thousand on Instagram and Facebook. That means a micro-influencer makes up a large portion of digital marketers or influencers. It is possible that a micro-influencer has a modest audience, but his influence is certainly great.

The Transition from Social Media Marketing to Micro-Influencer Marketing

In the past two years, the popularity of micro-influencer marketing has grown exponentially. A survey highlighted that approximately 1.5 million people search for ‘influencer marketing’. This was used to be the case for only social media marketing in the past. That doesn’t only indicate how swiftly influencer marketing is replacing other marketing strategies, but also the rise of micro-influencer marketing in the mainstream.

Another apparent reason for this transition is that customers rely on the recommendations and advice of people they trust. Nielsen 2015 Global Trust found in its study that publicity that comes from other people is one of the credible forms of advertising. 80% of the respondents in the study contended that they rely on the recommendations and opinions of their friends and family.

Not only this, two third of the respondents of the study admitted that they trust the information they found in online opinions. Part of the drive toward adopting such strategies is really turning people’s heads and they are accessing micro influencers, depending on their target audiences. Entrepreneurs have started leveraging micro-influencers to improve digital marketing strategies. It has become a reliable way to reach potential customers.

The rise of Micro-Influencers to Rescue Digital Marketing

You must have an idea of how quickly micro-influencer marketing is moving and replacing traditional marketing strategies. While the components of social media marketing and search engine marketing are still performing well, conventional online displays have suffered an inevitable decline in their effectiveness. The two major reasons for that are:

  • People don’t pay much attention to banner ads due to banner blindness. Even if it’s in front of them, they cannot effectively see them.
  • The rise of Adblocker software usage is another reason that has adversely affected display ads. According to a survey, 30% of devices have Adblockers installed on them that removes ads from the screens.

In addition to that, the survey found another digital marketing problem. According to it, most of the social networks lack the quality of controlling ads positions on the platforms. For instance, a high-profile brand, like Coca- Cola, would not be happy to find its YouTube ad positioned next an undesirable video.

With that in mind, it is important for marketers and businesses to know why and how micro-influencers can leverage their digital marketing strategy. If you are a startup and don’t know that, we have you covered here.

How Micro-Influencers Leverage Digital Marketing Strategy?

Micro-influencers – Your Groundswell Approach

There is no denying that micro-influencers use the perfect groundswell approach to influence market when it’s about reaching a large audience. They provide you multiple avenues while channeling digital marketing strategies for exposure and brand awareness.

Besides this, micro-influencers make businesses able to saturate the current market with their product and brand.

Moreover, micro-influencers are aware of the functional significance of repetition, regardless of what kind of marketing you are engaging in.  That is why their campaigns ensure that your brand is exposed to the target audience through different channels and outlets.

Professionals at Content Creation

If your digital marketing strategy emphasizes content creation then micro- influencers are undeniably the Holy Grail! What we mean here is that even if they don’t have the huge following, they can help you produce great content to help you promote your brand.

Whether it is multi-media content, written content or imagery that you are seeking, micro-influencers get this job done keeping everything within your budget. Most importantly, you don’t have to worry about the quality of content.

 Drive Loyal and Highly Engaged customers to Your Brand

There is no doubt that micro-influencers have a loyal and highly-engaged audience. It is growing and mostly made up of people they’ve met who like the content, and who have been following them for a long time; it also includes their family and friends network. On the flip side, most of the macro-influencers have comparatively lower engagement rate.

Target Audience Related to Your Niche

One of the benefits of working with micro-influencers is that they use the right digital strategy to target the audience in your niche. It typically helps businesses align with the audience whose interests and passions match with the product that is manufactured.

It is because influencer marketing is based on the relevance of an influencer to the product, service or brand.  If there is no match, your campaign will not accomplish its goals.

Final Thoughts

All in all, digital consumers have become tech-savvy and smart and micro- influencers focus on the value and power of engagement that is of paramount importance for businesses to grow. The given reasons, in this regard, emphasize the significance of having micro-influencers to enhance your digital marketing strategies.

 

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What Are the Necessary Means to Improve Your Business

Entrepreneurs are not born; they learn things by experiencing ups and downs in a business. To make consistent improvement to enhance your business status is critical to maintaining sustainability. Successful entrepreneurs perpetually monitor their business process in order to identify loopholes.  Monitoring your business cash flow and identifying your strengths and weaknesses is a key process that helps you improve your business.

Apart from this, there are several things you can do to keep the risk minimum while enjoying a double-digit growth every year.

Here we have included an overview of some necessary means you can use to improve your business growth

Ways to Improve your Business

1.     Assess Your Business Situation

As mentioned earlier, monitoring the progress of your business is a key to bring improvement.  This is where you identify the areas that need change. However, before you make the changes, it is ideal to ensure that you are aware of the factors that are affecting the success of your business.

These factors may include emerging market trends, your current business strategies, weak market strategies or even lack of competent staff. Fortunately, there are a number of tools you can use to assess your business status. Following tools can help you:

SWOT Analysis:

It is an effective tool that is designed to identify the strengths and weaknesses of your business. Not only does it help you assess the strong areas of your business operations, but also threats and opportunities. You can work out all internal as well as external factors that keep your business from growing.

SWOT is one of the widely used analytical tools to help you in the decision-making process.

SWOT

  • Builds on strengths
  • Minimizes weaknesses
  • Seizes opportunities
  • Counteracts threats

Market research

It is another important tool to investigate the business market to help entrepreneurs identify emerging trends, new technologies, and customer demands

Trend   Analysis

The tool uses your business data for the last five years to identify and assess consistent trends.

Benchmarking

It is a smart tool that is used to measure business performances with the same size of business being operated in the industry.

2.     Business Goals

Whether it is business or your life, without goals it is completely directionless. Business goals keep you focused and energetic, which makes your business successful. You can use these objectives as a part of your ongoing business plan to make sure you keep moving forward.

However, there are certain criteria that need to be considered while setting these goals. Your goals have to be SMART- specific, measurable, achievable, relevant and timely. That means they have to be practical to be achieved within a set timeline. It would be better to prioritize your business goals or to write them down on paper.

You can plan short or long -term strategies to accomplish them. It will help you determine the time, finances and resources.

3.     Develop a Strategic Plan

There is no doubt that businesses whether small or big, take time to progress. That is why it is important to create a smart strategic plan that has an outlook of at least 3 to 4 years. The plan should be made keeping the business goals ahead.

Make sure each year defines your business goals plus how your team will achieve those goals over the estimated time. Besides this, it is important to prepare a financial plan to meet the growing needs of your business.

That means the business strategy will not only define how your business will make profits, but also where and how much you will invest.

According to expert entrepreneurs, it is always beneficial to review your business strategic plans. It helps you match the set goals with the profit your business has produced.

4.      Be Passionate About Meeting the Goals

This might seem a no-brainer or something trivial, but it can make a huge difference when it comes to accomplishing your business goals. When you are passionate about your work, your colleagues and employees can feel this energy as well.

In other words, showing enthusiasm and excitement cannot be underestimated as it plays a critical role to make your team more hardworking, and focused toward their work productivity. The passion and enthusiasm translate to a better outcome.

Unhappy workers, on the other hand, pass through negative energy and make work more challenging.

5.     Implement Strategies

You cannot achieve business goals unless you implement the changes. Once you have made the strategic plan and estimated finances, it is the time to implement strategies. The implementation process includes several tasks and actions.

It is always a good idea to device an action plan, divides the workload, and tasks accordingly.  Following are some of the important points to help you implement the changes for business improvement.

  • Time Frame: Determine how long a specific task will take to complete. Set tentative dates for the task.
  • Actions: Divide the tasks among those employees that you think are the most appropriate to accomplish them. State actions to be taken precisely.
  • Responsibilities: Assign responsibilities; make sure your teams get the work done in time
  • Resources: Compile a list of supplies, budget, and other finances
  • Outcomes: State your desired outcomes and how the results will be evaluated

6.     Evaluate Success

You need to establish some measures to evaluate whether you have achieved your business goal or not.   These assessment measures depend on the type of tasks you are working on. If your business goals are significant, the measurement process will be more complex, such as measuring profits by a set percentage.

Along with these measures, you can set percentages for each task. It will help you evaluate the success statistically.  Plus, you need to consider how frequently you wish to measure your business achievements. It is very helpful when it is about setting new goals.

Final Thoughts

Your business does not only need your time, but also smart strategies and an effective action plan to improve revenues and profits. The above-mentioned tips are necessary means all entrepreneurs must adopt to sustain a prosperous business.

 

Access our network of Angel Investors, Venture Capital or get instantly matched with a Lender. Create a crowd funding campaign or get a business plan by visiting us Funded.com

What Does it take to Run an Online Business?

Continuous innovation in technology is changing the paradigms of starting and running a business for all entrepreneurs out there. Technology is disrupting the conventional mindset of requiring a significant amount of capital and doing extensive research for months before taking the first step toward building your own venture.

Almost everything from schools to businesses even medical assistance has an online presence nowadays. The days of running a conventional brick-and-mortar are gradually fading away, and businesses are more focused on being ubiquitous rather than confined to one locality. Hence, there is a continuous boom in online businesses.

It doesn’t matter what type of business you want to enter in order to run your own business – be it a superstore, restaurant, boutique, consultancy, or any other business for that matter – if you are stopping yourself just because you see your idea as a nightmare of overhead expenditures, and low profits margins, then stop right there and learn something from the gurus of e-commerce businesses, ‘Jeff Bezos’ and ‘Jack Ma’.

If they, or any other successful online entrepreneur, would have backed out from availing an opportunity to start their dream venture online, they wouldn’t be where they are today. Surely, they faced their unique set of challenges, but they found a way out and set an exemplary venture for all entrepreneurs to follow.

Starting an online business nowadays is much easier compared to starting one, say, 10 years ago. Rapidly changing social platforms, mobile phone, and consumer lifestyles are encouraging already existing ventures to have an online presence and new people to start an online business. Here are some essentials when starting an online business.

An Ideads

What do all successful businessmen have in common? It was the ‘idea’ that they were so passionate about that they just had to share it with the world. Whether it was Steve Jobs working on the first touch phone, or Jack Ma starting the online business trend in China, it was their idea that changed their and the people’s lives around them forever.

Online businesses can run on numerous business models, such as web-based clothing line like Zalora, subscription boxes like Netflix, and Blue Apron, e-commerce platforms such as Amazon and eBay, and so on. All it takes is an idea to fit the right business model and you’re good to go.

Skills

Every business requires a certain combination of skills to operate. Even though the number of people possessing these skills may vary from one business to another, yet here is a list of some crucial skills that are needed in every online business venture:

  • Sales and Marketing: People possessing these skills are a gateway between your business and the end consumer, be it a B2B or B2C business, marketers, and salespeople are responsible for making strategies and plans in such a way that not only increases your business visibility, but attract people to your brand.
  • Technical Expertise: This is particularly important for businesses who are running their own websites and applications. Even though certain people prefer outsourcing web application or using third-party platforms, but ones who set up their own domain require technical expertise with backing up their data and ensuring it is free from cyber threats.
  • Analytics: Regardless of driving organic traffic to your webpage or running a paid campaign, people with analytical expertise are highly useful in online businesses. They ensure the right mix of strategies that will boost your business’ online visibility while making viable predictions for future trends from data that is generated in the processes.

Comprehensive Plan

Diving deep into something that one hasn’t fully analyzed will be the biggest mistake individuals tend to make. Therefore, it is highly recommended that you do a thorough study of the favorable and unfavorable circumstances that you might face when starting your online business.

For instance, conducting market research to thoroughly understand your target audience, and organizing a competitive analysis to know who/what your business will be up against; these basic preliminary steps can turn out to be quite beneficial in the long run.

Website

Setting up a website for online businesses is an ongoing process that goes through numerous steps, from registering a domain name, to updating it regularly. Domain names should be unique; the last thing that any business would want is to have the same name as anyone else.

For some businesses designing a website and making it mobile friendly makes a lot more sense as compared to other ventures that sell, let’s say, FMCG products.

Moreover, paying attention to the quality of the content you upload on the website makes all the difference when it comes down to how much traffic your website generates. So quality pictures, recent blogs, and affiliations with other ventures will surely boost your website’s credibility.

Approval

Like all other businesses, online businesses too have to go through a certain procedure to legalize themselves, so make sure that you read up all the regulations there are about running an online business.

There can be a number of regulations from shipping, to trademark to zoning for you to consider when setting up your business. By taking all the rules and regulations into consideration, make sure you get your business registered according to the legal structure of the country you’re based in. Moreover, you’ll need to consult with a business lawyer about the tax obligations of your business.

So Start Your Online Business

From being considerably inexpensive, providing more convenience to all stakeholders, to having an unlimited potential to generate income, there are numerous reasons why one would prefer starting a business online. Even though starting a business online doesn’t involve any less work, people tend to underestimate how much effort you need to put in, in order to make a business successful.  Even if you decide to start an online business as a source of extra income, it should be updated and maintained regularly. Indeed, no business is successful without constant efforts of the people involved.

5 Steps to Create a Good Back Up

There is no denying that protecting or securing your company’s data is of paramount importance. Whether it is a client’s files, project details or any important communication, everything needs to be securely saved in a digital format. Losing important data can have ethical ramifications and it can be professionally catastrophic.

That is to say, cyber security must not be taken lightly. No matter whether it is your family picture or any other important document, data protection is important. Many of us consider downloading anti-virus software enough when it comes to protecting valuable files.

However, this software can easily be hacked as soon as hacker gets access to it. That means finding other solutions that help you recover your valuable data is crucial.

That is where you need to implement a backup strategy in order to prevent data loss permanently. Whether you are analyzing your existing backup plan or implementing it for the first time, here we have included five important steps to help you create an effective backup plan.

Before we get into the details of creating back up data, it is essential to understand why it is vital.

Why You Should Have a Backup Strategy?

If you are a startup, you need to understand that your business reputation is one of the most important aspects to strengthen your relationship with your customers. Losing a customer’s personal data may raise questions on your credibility.

According to a recent survey conducted in 2017, an average data breach costs around seven million dollars. This is a significant impact that very few companies can afford. Another survey estimated that approximately 60% of firms that lose data due to any reason close within five months.

Not to ignore, companies are at risk of losing valuable data permanently. Malware and viruses can destroy it and are some of the most dominant threats to data security. However, 60% IT professionals consider that careless employees are a significant risk to personal or professional data.

There is no doubt that these risks can bring financial instability to your company. Without a proper backup system, both your company’s reputation as well other assets are at stake.

Steps to Create Backup

1. Assess the Backup Needs of Your Company

Assessing the backup needs of your company is the first step. You need to consider several things. Here we have broken it into three important points.

What Company Data needs Protection?

To answer this question precisely, everything needs to be protected. Losing even minor data files permanently can be of high risk. To put it simply, all of your data is crucial to keep everything operational.

Consider these questions for both long and short-term benefits.

  • Do you need to restore data?
  • Do you need an ability to recover data?
  • Do you need uninterrupted services to be available to your clients?
  • Do you need to implement back up strategy for your operating system, databases, configuration, and applications?

All these questions will help you make a comprehensive data backup strategy. Plus, considering these points before devising a backup strategy will set a clear direction for the right backup solution.

What Data Risks you have?

Considering your data risks is vital to prevent the risks of cyber crime. You need some of the best back up strategies to protect data from professional hackers.

Here are some important considerations:

  • Have your systems been hacked in the past?
  • Are your careless employees the reason for poor security?
  • Is your location safe in terms of weather-related damage?
  • Can your clients also access the company’s data from anywhere?

These questions can be really helpful to identify risks that your data faces.

2. Evaluate Best Backup Strategy Options

Once you have determined the backup needs for your business, you need to evaluate various backup strategy options you have. Here are some backup options you can choose according to your setup and needs.

Software Solution

You may buy software backup that can be less pricey than investing in hardware backup.  You can easily install them on your systems using a separate server for them. Installing software backup may be an ideal option if your business infrastructure is dynamic.

Cloud Services

It is an offsite backup facility that allows users to run their backups and stores them in the vendors’ cloud infrastructure. It is secure and affordable, but often not suitable for companies that have sensitive data and/or are subject to various regulatory requirements.

Hybrid Solutions

One of the popular and advanced options is implementing a hybrid backup solution. It is a combination of cloud backups that comes with multiple data restoring options. Not only does it provide you with on-site backup, but you can also recover data from the cloud network.

3. Budgeting

Creating a budget for your backup solution is the third step in your plan. You need to review all your options with their cost in order to choose what suits your infrastructure best. Cloud-based back-ups are more affordable in terms of capital expenditure for most startups. Make sure you estimate the cost of:

  • Data lost due to a disaster or data breach
  • To  train staff to manage backup

4. Implement

You have reviewed both your backup solution options and their cost, and now it is time to implement your chosen option. Make sure that your infrastructure has technology expertise both in hardware and software installation.

No matter what backup option you choose, they need to be properly configured. Plus, proper backup is pivotal to maintaining a stable, healthy and ethical practice. That is why they need to be implemented appropriately.

5. Test and Review

To avoid catastrophic data loss and minimize the risk of inadequate data recovery, testing your backup solution is essential. There may be serious flaws in your implemented backup strategy. It is always better to test your backup solution routinely before completely relying on it.

Simulate some real scenarios to protect major data loss just by deleting a single file.

At the same time, keep reviewing your backup strategy as technology is advancing at a rapid pace. Timely reviewing the strengths and weaknesses of your plan will allow you to adjust your backup strategy for the better.

Final Thoughts

Overall, implementing the most effective backup strategies is undeniably the safest option to protect your crucial data.

 

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