5 Simple Steps to Creating Proper Asset Allocation

Proper Asset Allocation

Every investor tries to build an excellent investment portfolio.To make such a portfolio, your investments require asset allocation.

In a bid to build a vast investment portfolio, most investors tend to focus on getting the best investment option, such as stocks or bonds. However, as an investor in today’s marketplace, the key to financial success and long-term growth of your investments is in a well-maintained diversified portfolio.

Take,for instance,a street vendor who sells both umbrella and sunglasses at the same time with the knowledge that it is easier to sell umbrellas during the rainy season and sunglasses in summer. What this example demonstrates is that as an investor, you should fill your portfolio with an appropriate mix of bonds, stocks, cash, fixed deposits, real estate, gold, pension funds, and other investments. This mix is what is known as an “asset allocation.” Your portfolio should meet your future financial requirements but still give you peace of mind.

Here are five steps to help you achieve a proper asset allocation.

Set your financial objectives

The first step towards constructing a proper allocation is to determine your personal financial goals and situation. You have to consider the amount of capital to invest, your age, future income needs, and your time horizon. When you need the money is just as important as what you’re saving, as such, your time horizon can be for a couple of months or several decades.

Your future income needs can be anything from buying a house, paying off debt, saving for a wedding, making a charitable donation, planning for a college fund or a retirement trip. Each of these goals requires a different amount of money for success. Setting your goals will help you identify the amount of money you need to save to achieve them

For instance, a 55-year older adult hoping to pay for a child’s college education and possibly retire in the next decade can’t have the same investment strategy as a 22-year old college graduate who is just starting in career. Your current wealth and saving habits versus your goals will help you determine your proper asset allocation.

Gauge your Risk Tolerance

Next, you have to factor in your risk tolerance and personality. While investing, you should base your risk tolerance on your view and attitude towards investment volatility and your time horizon. Are you willing to hazard the potential loss of some amount of money for the possibility of higher returns?

If you can’t handle the inevitable ups and downs of the stock market, fixed-income investments such as bonds may appeal to you more. Or if your investment is for a short-term goal of about three years, you can’t afford to take chances with the money not being there when you need it. If you can’t have a peaceful night rest if the value on your investments drops for a short while, then the chances are that the potential high returns are not worth the stress. What’s more, the possibility of higher returns comes with a greater risk of losses. So, you have to optimize the chance to suit your lifestyle and situation. For instance, a person nearing retirement should focus on protecting their assets and drawing income from them. On the other hand, a young person won’t have to rely on their investments for profit, so they can afford to take higher risks in the search for greater returns.

Find the Asset Class that Fit your Profile

Generally, investors who can bear more risk are more aggressive with their portfolio. If you have a high-risk tolerance, then you can devote a more substantial portion of your portfolio to equities and less to fixed-income securities like bonds. On the other hand, a person with a low tolerance level will have a more conservative collection of assets dominated by fixed income securities with fewer equities.

Choose a Mix of Assets

Keep in mind that beyond the particular fund or securities you choose, the way you distribute your funds among various asset classes has more impact on your success and returns. In alignment with this, you can divide the equity portion of your portfolio between companies with different market caps and industrial sectors. Then, you can allocate the bond portion across various subclasses such as long-term and short-term, and corporate debt versus government debt.

To enhance a diversified portfolio, some people prefer to invest in mutual funds. These funds include a wide range of asset classes, and they allow investors to hold bonds and stocks that are well-researched and selected by fund managers. If you do not like the idea of a mutual fund, you can invest in Exchange-Traded Funds (ETFs). Simply put, ETFs are mutual funds that trade like stocks. The diversification for ETFs is based on capitalization, country, sector, and the likes.

Have a Big Picture

To set up the most efficient allocation strategy for your financial goals, you have to look at your entire financial picture. It is best to diversify with an eye on all your assets, including real estate, bank savings, insurance policies, and tax-deferred retirement savings you may hold, such as an IRA.

Regularly Monitor your Asset Allocation

After establishing a proper portfolio, you still need to analyze, reassess, and rebalance it periodically. This is because the asset allocation can change over time. For instance, a rise in the assets’ value can increase the portfolio volatility, the investor’s financial status can change, and the risk tolerance of the investor can be reduced by age, especially some years before retirement. 

If any of these factors alter, you also have to change your portfolio accordingly. Rebalancing involves determining which assets are overweighted (in an excess amount) and those that are underweighted.

The Bottom Line

As you construct and reconstruct your investment portfolio, it is incredibly crucial that you maintain your diversification. Owning securities within each asset class (equities and fixed-income) is not enough; you also have to diversify within an array of subclasses and industry sectors.

As we’ve earlier mentioned, you can easily achieve superior diversification by using ETFs and mutual funds. These two are investment vehicles that allow individual investors to enjoy the considerable scale diversification that fund managers and big companies enjoy.

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What’s ERP Software and Why Do You Need One?

With the rapid growth in technologies, the ERP software market may cross $41.69 billion in profit by 2020. The statistics are enough to demonstrate the impact of this technology on businesses. This figure is undeniably impressive and reflects how important it is for businesses in the future. Incorporating ERP software is one way marketers can give their brand a competitive edge.

If your startup is in the initial phases and you are looking for a technology to help you manage business functions, ERP software is ideal, and if you don’t how, this article is worth reading.

What is ERP?

ERP stands for Enterprise Resource Planning system. Many organizations use this software package to manage business activities, including project management, procurement, accounting, distribution operations, and manufacturing. It helps in day-to- day business functions while centralizing them within an integrated system.

The software is more useful when managing supply chain activities or keeping a track record of the moving parts of distribution and manufacturing. The use of ERP software is not confined to these business domains. It is utilized by a plethora of different domains that include nonprofit groups, construction, healthcare, and hospitality. Companies requiring inventory, staff, and customer management can rely on this advanced software.

In addition, ERP software stores data in a single database that allows different sections to work in collaboration by using the same information. ERP can organize and analyze data in the form of reports. In short, ERP software is great for bringing together the following functions into a single system:

  • Human resources
  • Financial management
  • Customer management
  • Business intelligence
  • Inventory
  • Supply chain functions

Here are some more reasons why your business needs ERP software.

Why Your Business Needs ERP Software

You might be wondering how ERP software is different from other software that performs similar functions. Although ERP software has the same goals of managing business functions, it has a number of unique features that make it extremely distinctive from other software.

Saves Money

You may find it a surprising fact, but ERP software is a good investment in terms of flexible pricing and saving money. For small companies, the initial price may seem heavy, but once they start using it, the software can help the business save a lot of money.

This means ERP software can significantly increase ROI. It is simply because the system unifies multiple systems that businesses often use in fragments. From accounts payable to product development, the staff can access the necessary tools by using a single centralized system. The software efficiently helps save time by keeping employees from hunting down information across different systems.

Improves Collaboration

This ERP feature generally varies as it depends upon the program business is using, but it does have a strong impact on collaboration in one way or other. As mentioned earlier, ERP works with a unique centralized database that provides the business a source to work in collaboration. Not only does it reduces the risk of errors caused by incorrect data but also minimizes costs.

Moreover, ERP software reduces during projects as team members can access to whatever data they need. The information doesn’t require merging within sources or system because data is carefully collected, stored, and shared through one system. To put it simply, employees do not have to worry about accuracy, completion, and security of data files.

Helps in Better Analytics

Businesses need ERP software if they want to improve data analytics and statistical reporting.  ERP software, in this regard, is ideal as its store’s data as input and makes for an unparalleled business intelligence tool. If vendors provide good functionality, ERP can be a great help in generating fast and accurate reports. The efficient software makes report compilation (that used to take days) a matter of minutes.

Besides this, the option of customizable dashboard enables executives to see the reports at the time they are uploaded onto the system. The reports include information related to expense statements and custom KPIs that has important insights for certain functions. The report access is also beneficial when a company has to make a quick and better decision.

Improves Productivity

There is no comparison of ERP software and traditional methods that make tedious tasks even more difficult. Employees used to invest hours for the tasks like monitoring inventory, generating reports, processing orders, and timesheet tracking. Not only were these tasks time consuming but also lower the morale of employees, increasing the risk of errors.

ERP software solves all these problems as it can conveniently automate even the most tedious task. With its integrated database, ERP eliminates all the redundant and time taking tasks, like data entry. It improves productivity by allowing the system to do advanced calculations quickly. The automatic features free up employees and provide an opportunity to focus on other important tasks to improve ROI. That means ERP software can increase business productivity, profitability, and efficiency.

Simplified Risk Management

ERP is must have software if your business is expanding internationally to keep track of imposed regulations on the business. Even if the business is local, there is a plethora of human resource, information security, and environmental regulations you need to consider.

The good news is that ERP considers these regulations so that businesses can maintain compliance. The software incorporates built-in auditing features to assist businesses with documenting tax provision and chemical use. This makes everything incredibly easy, from formulating reports to sending them to the pertinent governing authority. This feature makes ERP software a great tool to manage risk.

Final Thoughts

In a nutshell, ERP software is a panacea of all the hectic, tedious, and manual business functions. The advanced software is multifunctional and helps businesses improve functions, accuracy, reliability, and financial management. The integrated system can exceptionally manage a wide range of business activities from supply chain management and procurement to accounting, and operations.

In other words, businesses cannot deny the functional significance of this all-in-one software to enhance their overall productivity.

 

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What Is Factoring and Why You Should Consider It for Steady Cash Flow

Whether you are running a mid-sized company or a startup, your company requires working capital with fast financing and flexibility. Factoring companies, in this regard, provide you this needed cash flow. A factoring company typically takes on waiting for burden for accounts to receive invoice payments. In return, it provides businesses and companies with timely advance cash.

There is no denying this receivable financing method is not only flexible but and also a smart financing alternative as compared to conventional business loans. Businesses need factoring when their account receivable invoices are essentially put up for sale at a discount to a factoring company. Banks, on the other hand, require businesses to go through a burdensome and long approval process to apply for a loan. Not only this, bank loan bears interest at the current market rate and often results in heavy business debt.

Reputable factoring companies, however, start your approval within twenty-four hours and can give you the funds on the same day. This duration can be of ten days, if you are a new client. Factoring doesn’t subject your business to any volatile interest rate. This means factoring financing is a great way to avoid debt on your business or company’s book.

Factoring financing is a long-term solution for business when it comes to enumerating its benefits. However, to make the most of this finance alternative, it’s important that you have sufficient knowledge of factoring. To clear the mist, here we list some potential benefits of factoring to help you understand why you should incorporate it in your business for steady cash flow.

Before plunging into the discussion of factoring benefits, let’s understand what factoring is.

What is Financial Factoring?

In financial terminology, Factoring refers to an invoice discounting and it is used as a financing tool for businesses, particularly for startups. When a business sells goods or services to its customers, it typically offers various payment terms instead of cash at sales time. Although there are a plethora of reasons why businesses practice this, developing a long-term relationship and increasing sales are the most important. In this kind of transaction, businesses usually get accounts receivable, which they hold on their books until customers clear the debt.

Businesses Can Benefit From Long-Term Factoring

If your business faces the following scenarios, invoice factoring can be really beneficial:

  • Volatile and unstable cash flow
  • Seasonal sales
  • Long duration sales cycle
  • Business needs funding to maintain production and substantial inventory
  • Delayed payments, such as corporate buyers and government agencies

How a Factoring Company Helps Business

A factoring company deals with invoice financing, particularly for startup and medium-sized businesses that want a non-bankable working capital solution. A factoring company, typically, purchases invoices for your business from creditworthy clients. Once you do it with crediting invoices, the company advances your business with 90 percent of invoice amount within 24 hours. The remaining balance is cleared when your client settles the payment in full.

You can submit your invoices directly after the product delivery or work completion. One of the interesting features of the factoring company is it keeps your revenues inflow and causes no collection hassles or delays.

Why Your Business Should Consider Factoring for Steady Cash Flow

Fast Way to Raise Money

As mentioned earlier, factoring is an alternative financing solution for businesses looking for swift working capital. A factoring deal does not take more than 24 hours to process and complete. If your business is in need to expand its operations quickly, factoring is your go-to option. Unlike banks and other financial solutions that take a whole lot of time in applying, processing and sanctioning, invoice factoring is a fast way to raise money. In general, businesses do not have that much time when it is about making investment or processing payments.

An Easy Way of Reliable Cash flow

There is no doubt that the availability of manageable and consistent cash flow is significant for operating a successful business. This means if your business doesn’t have a reliable cash flow, it may struggle to meet its daily financial requirements. Financing factoring, in this regard, is an effective and easy financing option that can help you improve cash flow. By using financial factoring and its steady cash flow, your business can meet its daily cash needs. You can even use that money to grow your startup into an established and successful company.

Growth and Expansion

Continuing from the last point, businesses in the growth and expansion phase require working capital. Whether your business needs to hire more employees or purchase new equipment, factoring can provide your growing business the working capital it needs. It may bring endless opportunities for your business to expand.

Maxed Out Your Business Lines of Credit

A state of maxed out credit line can bring your business cash flow to a halt. Even if your company has good credit, banks can limit the amount that you can legally obtain. This may be hazardous for your business growth. However, with invoice factoring, it is only your account receivable base size that can limit. For instance, you can obtain more working capital if your business makes new customers or signs new contracts.

A Way to Handle Slow-Paying Customers

Slow paying customers are something that businesses simply cannot avoid. Managing cash-flow becomes hard if customers take 40 to 90 days for paying the due amount. Even if you work with a Master Services Agreement (MSA), which is a payment term, there are customers who pay as per their convenience. Invoice factoring allows you to benefit from instant access to your due cash. All the due payments are received within 24 hours.

Final Thought

In a nutshell, financial factoring offers multiple benefits for companies in need to raise cash without any delays. Particularly, when a traditional bank loan is unattainable and your rapidly growing business needs to meet payroll, purchase material or cover its other operating outflows, factoring is undeniably one of the best ways you can solve all these problems.

 

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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

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 meetings 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 employee. 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 employee 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.

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.

The recruitment process of traditional employee 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 requirements.

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, job 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 employee. 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 biases 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 employers and employees can 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 can yield mutual benefits out of their transactions.

Manage and Retain Hires

Hiring remote employee 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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Business Opportunities for 2019

The constant change in consumer demands and requirements has led to a continuous shift in the nature of businesses and the way they are operated. Globalization and technology are changing the business world at an exponential rate.

Running a business online, something that was a far cry about 50 years ago, has become an absolute necessity today. Similarly, opportunities that might have seemed impossible are most lucrative ones to avail.

So here is a list of the top businesses, if agreed upon with utmost enthusiasm and determination, which are bound to bring success in the coming years.

E-Commerce Distribution Center

As clichéd as it might sound, the e-commerce sector is growing every year and is expected to grow by 56% by 2020. Countries that are particularly economically developed, such as the US, have a growing sense of satisfaction in its people when it comes to ordering online. The continuous rise in e-commerce markets is especially due to the increased use of smartphones.

Thus, with such favorable conditions, e-commerce markets are inevitably rising as well. Albeit platforms like Amazon (B2C), eBay (C2C), makes it a little challenging for new businesses to grow, and those who risk entering this lucrative market are bound to look for solutions with distribution.

The reason being the task of storing and distributing is a significant part of running an e-commerce business, and the increasing number of online small and medium-sized businesses will inevitably look for such services to help them compete.

Data Crunching (Consultation)

Not very long ago there was a time when data at hand was insignificant for making substantial analysis, but with the increasing use of social media platforms and websites, valuable data is generated every other second.

This idea is not only about collecting a vast array of numbers, but it is also about deciphering them in a way that gives insights and understanding to the business in question. Thus, data related fields are at a continuous rise. With the right combination of skills and resources, this business opportunity tends to be a lucrative one.

Car Charging Station

We are all aware of the increasing popularity of hybrid – all-electric cars in particular. Encouraged by the state, entailing long-term benefits and being environmentally friendly, these cars are here to stay. With an incredibly high demand for all-electric cars, such as the Nissan Leaf, which was sold out before even arriving in the showrooms, there is bound to be a subsequent rise in the percentage of existing charging stations.

Instead of hundreds, thousands need to be built in order to cater to the rising demand for electric powered cars. The idea is not only to encourage the use of this eco-friendly vehicle, but it will also, most likely, eliminate the hesitation to take cars outside the city worrying about a charging station.

Privacy Protection Firm (Cyber Security Software Company)

Year after year, cybersecurity is becoming a major area of concern for many. From money (credit cards) to communication (emails, SMS) to even personal identity (social media platforms), practically everything has a virtual presence that is vulnerable to a breach of information.

With the increasing number of cyber threats, privacy protection companies are in demand more than they ever were. We can be sure that governments around the world are now taking reactive measures of passing cybersecurity laws to prevent beaches, data leaks, and related issues.

Social Media Consultancy/ Management

Social media platforms are breaking the conventional methods of doing businesses; stats have shown about a 198 percent increase in e-commerce websites due to social media referring. That is why companies nowadays are willing to spend significant amounts on the management of their social media accounts.

Social media accounts are not only boosting leads, but also significantly increasing sales and generating valuable insights for organizations to plan ahead.

Hence, there is a rising demand for agencies and consultants who are credible enough to provide the necessary social network support that organizations nowadays are eagerly looking for.

Affordable Elderly Facilities

The aging population is the US is growing at a rapid rate. It is estimated that by 2050 around one-fifth of the entire US population will be over 65, resulting in an inevitable requirement for old age facilities.

Since there is a general perception of poor quality treatment and other problems in these accommodations, it is pivotal that all such notions be overruled by establishing accommodation that offers superior care and caters to the current and future demands of this area.

Car sharing

Drawn from the concepts of renting houses and spaces, renting cars are next in line in the renting businesses. This business has the potential to generate millions with a simple rule of thumb; to charge at least 1% of the total cost of the house/vehicle.

This business is rising at a fast rate, as there are numerous people who prefer using cars for a short period of time or have a need for another type of car that is different from theirs.

These are precisely the reasons why car-hailing services, such as Uber, have been so successful in such a short span of time.

Innovative Tech-Tools Providers

With on-going breakthroughs in technology, artificial intelligence systems, virtual reality, and so on, are in regular demand nowadays. AI is required in manufacturing as well as the service sector, while virtual reality is being used in studies (medical and art), as well as businesses to visualize business and financial models.

However, various studies have proven that gaining access to new system/technology is not nearly a challenge as implementing and sustaining that system. Change theories are not new to us; they have and will always give us a general picture of enforcing advancement in the current practices.

Hence, there is a need for catalysts – change agents – who not only deliver the right technology to meet the organization’s need, but also ensure that the people in the organization develop a certain level of comfort with their new system.

This business has a lot of potential because it will not only tap the future needs of organizations for the latest technologies, but it will efficiently bridge a gap between inventors and end consumers.

 

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8 Silly Ways Small Businesses Waste Their Marketing Budget

Marketing Budget

Irrespective of your business size, your business’ marketing budget is a precious resource. It is your investment, which can help you grow your company’s business and stock value. So you surely want it to give results for the growth of your business.

Large-scale businesses usually have high marketing budgets as compared to small-scale businesses. Small companies normally allocate a small budget for marketing due to their limited resources. It means that if you are a small business owner you do not have the finances to put to waste.

As a small business owner, you need to ask yourself these questions:

“Are you spending your budget on the right tactics?”
“Are you making effective and optimal use of your budget?”
“Is it working for your business?”

To put in simple words, are you wasting away your marketing budget?

Adobe researched how effectively companies spend their marketing budgets. It was not a surprise that most of those companies were not doing a good job.

Do you feel that you also fall in the category of these small businesses that are not spending their marketing budgets the right way?

Then you should continue reading to know the silly ways in which you might be wasting your marketing budget and how to fix them.

Use of social media for building following:

Undoubtedly, social media is a great tool for small businesses to use for their marketing. But most businesses start their marketing on social media without a proper strategy.

Gone are the times when Facebook marketing was free and reach was high. Now you need to invest money and efforts in Facebook marketing thanks to its evolving algorithm. Small businesses need to spend on the paid advertising to make their business ads visible and get their content seen by the target audience.

How to fix this?

The price of Facebook ads is not too high but due to increased competition, it is likely to get higher shortly. This means you may need to spend more money to make your content visible to your followers. Presently, what you can do is use your social media investment to build an email list of your followers. This will allow you to have direct communication with them. Give incentives to your followers for sharing their email addresses.

Expecting instant and high-end results:

Many small businesses begin with a strong ambition, but most of them fail within a few months. The problem lies in their unrealistically high expectations. They want to see results in just a few months following their launch. And when they fail in getting those results, they back out.

How to Fix this?

As a small business owner, you should expect a ramp-up period of two years. If this looks impossible to you, smartly create a marketing strategy to keep your marketing engine fueling and running. Then, create as much influential and informative content as you can afford to create to promote your business.

Inability to understand your target audience:

To grab the attention of your audience, you must understand the behaviors and attitudes of your potential customers. Otherwise, you are just making your marketing budget go down the drain.

A Fix:

KNOW your target audience, their behaviors, and attitudes before you even create a content strategy. Then figure out ways to communicate with them effectively.

Not realizing how you succeeded in attracting your valuable customers:

You can refer to them as your loyal customers or valuable customers who come back to you again and again. You should know what marketing techniques and content brought those invaluable customers to your business. These top 20% of customers may give you nearly half of your business revenue.

Spending a significant portion of your advertising campaign: You can find lots of marketing tactics to give a try. Some of these may perform great, but in most cases, they may not work for you especially when you have a limited budget to give a one-time shot. Small businesses should avoid diving into big-time five-figure spending on marketing campaigns.

What is the Fix?

You need to adopt a test and trial method before investing big. First, invest in $1000 or less. If that particular marketing tactic does not work at an investment of $1000, it is highly likely that it will not work on $1500 or more.

You are not keeping proper track of your marketing investments and efforts:

Many small businesses set up a Google Analytics account, but don’t use it. In case, some are using it they don’t know how to make optimal use of it and get the benefit. Same is the case with Google AdWords for PPC. You may buy the space for ad campaigns, but end up wasting a lot of money without analyzing how those ads performed.

An Easy Fix!

You can easily learn Google Analytics tracking and AdWords through free online courses on Google. Setup conversion tracking for your advertising campaigns in Google analytics. This enables you to effectively see and analyze the activity of your potential customers on your website. If you haven’t done this yet, do it right away!

You are trying to be the jack of all trades:

Small business owners with limited resources often try to manage multiple things alone. You cannot afford to hire a complete marketing staff, but just one or two people for it. You cannot manage the entire marketing strategy all alone.

A simple solution!

Keep your focus on understanding your audience, on which platform you can mostly find them and which marketing tools and content they like.

You are following the same marketing strategy for years:

This is the biggest mistake because the marketing landscape is evolving at a rapid pace, nowadays. While focusing on the above-mentioned things, it is also recommended that you try a few new techniques every year.

The solution:

With the evolution of marketing tactics, you need to evolve as well! Always remain on the lookout for the latest marketing techniques that fit your low budget.

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Seasonable Business Cash Flow – Big Problem but with a Solution

Cash flowIt can be quite the hassle as a seasonable business. No matter how well you plan the year, you always seem to be struggling a while after the profitable season ends. Cash flow is somehow always a problem, but it’s not impossible to manage. Sure, it’ll take some effort and organization on your part, but it’s nothing that a dedicated business owner can’t handle.

There are a number of seasonal businesses, from farming to tourism and all the way to event planning. Although the nature of these trades is different, managing cash flow will be similar because of their seasonal characteristic. Here is what you have to do.

Know Your Seasons

You may think this is basic knowledge for any seasonal business owner. However, in a majority of cases, business owners horribly overestimate their peak season. Moreover, they underestimate the costs of operating during off-seasons. When you know the exact timings of your season, you’re able to derive accurate conclusions that set apart fact from fiction.

If you run a new business, you’ll have to start taking detailed notes from year one. Conduct research based on other seasonal companies but if you’re established, it’s time to bring out the records. Once you figure out your business’ periods of maximum revenue and expenditure and vice versa, you can plan on a forecasting strategy.

Forecast Your Business

By forecasting your cash flow throughout the year, you’re able to evaluate how much funding you have, in response to the costs. You should analyze your records to form a plan with regard to spending and sales, and how much cash flow you can retain after peak season.

You should form an analysis of sales and spending forecasts based on the factors that drive it. This includes product lines, channels, and units. Then, you should check whether your evaluation matches the accounting records.

When you’re forecasting cash flow for your business, ensure that it manages any references to sales on account, inventory management, asset replenishment and repayment of debts, which are sensitive to cash flow. When you keep track of all these things together, you won’t have to think about why unknown costs keep popping up despite the effort.

Maintain Forecasts with Concentration and Money

Making a record of forecasts once isn’t enough and never will be. The market and economy can shift within a second, so you must not fail to keep the changes reviewed and revised. This theory of development ensures that you know what’s happening, so you can adopt a new strategy next time.

Know the Expected Expenses

In a business, there are always some recurring expenses that remain fairly constant over time. You should account for these so that you can accurately forecast expenses during off-peak seasons. These costs include the price of utilities and rent but some that won’t come to mind. To know those, you’ll need to break into the account books.

In the end, you’ll be left with a somewhat expected figure as to how much you’ll have to pay in quarterly taxes and business insurance premiums. You should add these to your forecast because planning for them will be helpful during seasons with low business.

Address Changes

Sometimes, it’s enough to simply know when your business becomes vulnerable. Even if you can’t manage things yourself, you can still ask for some help. Instead of worrying about what terrors the off-season can bring to your business, think about what you can do to calmly face the inevitable. Surely, you’ll run out of capital no matter how well you manage cash flow so what does one do? You take a loan.

Think of it this way, taking an emergency loan just days before making your employees’ payroll will be very different from applying for a bridge loan months before off-season starts. For starters, you’ll get a good interest rate, and you’ll develop a good relationship with the bank.

A misconception is that well-run seasonal businesses shouldn’t need loans to generate cash flow during the off-season but this isn’t true. It’s much more achievable for a seasonal business to anticipate extra costs beforehand and take a special loan as one sees fit. Investors and bankers will show a positive response to good planning and anticipation so you shouldn’t forget to tell them about your business’ seasonality.

Restructure Some Expenses

As a seasonal business, you’ll need to pull some strings here and there to make sure that you get through the rest of the year until you’re back in peak season. One of the things you can do is to structure certain expenses in a way that they match the revenue you have in the current season.

For instance, if you make handcrafted products and deal with vendors for materials, you can form an agreement with them so they demand bigger payments in peak season while making off-season payments smaller.

Empty Your Shelves

In today’s world of consumers, quite a lot of people don’t shop during the season. This could be due to a number of reasons; they’re trying to avoid the crowd or they simply don’t want to pay the higher price. They’re waiting for an off-season sale to stock up, and as a good business owner, you should provide.

Empty out any leftover inventory from peak-season by selling products at a fair discount. This will help you generate extra revenue, as well as a pool of off-season customers. Not to mention, you’ll also be reducing the expenses of storing items.

Improve Your Line of Expertise

This is the final piece of advice that any seasonal business can get and it has more to do with becoming a multi-seasonal business. Experts suggest that seasonal businesses expand their line of work by offering different services during the off-season.

For instance, roofing companies take up jobs like snow removal during the winter. Your business can do something similar and boost cash flow throughout the rest of the year.

Conclusion

These are some of the solutions a seasonal business can adopt to improve their cash flow during the off-seasons of the year. Now, there’s no reason to do everything simultaneously. However, consistency is key. By slowly working towards a successful off-season period, seasonal businesses can improve strategies and boost peak-season practices.

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Debt Is Not the Death of Your Business

Business Debt

“Debt” and “business” are two words you don’t want to see in the same sentence. Unfortunately, it is not always a smooth ride for every business owner. High hopes can often make business owners get carried away. That’s why experts want you to be realistic with your expectations as a business owner. It does not matter how unique your product is or how differently you have planned to serve your target audience. You cannot expect too much unless you have tested the waters beforehand. Perhaps, you set your hopes too high at some point and dug your way into the debt trap.

Good news is that debt is not the death of your business – at least not always. Some proper planning, persevere attitude, and calculated strategies can help you dig your way out of debt too.

Free up the Money That belongs to You

The first thing you ever want to do is free up the money that belongs to you. Perhaps, you are in a business where credit transactions are common. The problem with this format is that customers can delay your payments more than the specified period quite often. They have received the product, and they have consumed it too. Not clearing your invoices does not really hurt them as much as it hurts you. Consequently, you will have to get in touch with these customers and remind them of the pending invoices.

You can ask these customers to pay you sooner. Set a deadline and ask every customer to pay by that time. It won’t be easy but do not forget that you are fighting for the survival of your business. You can boost your cash flow significantly even if half of the customers agree to pay you on your set deadline.

Boost Your Revenue

This is an area where business owners have an advantage over people who do nine to five jobs. Salaried individuals don’t have any control over their salaries. It is a fixed amount that they will receive at the end of the month. On the other hand, you as a business owner have your revenues under your control. You can decide what your business earns at the end of the month. You can change prices, launch promotions, and cut your costs significantly to increase your revenue and profit.

One of the ways to get your customers’ attention is to launch promotions. However, you have to design your promotions carefully. You don’t want to shrink your profit margins until you know your promotion will increase your customer count considerably. If you have a loyal and repeating customer base, take advantage of that. Increase the prices a little to generate more revenue.

Slash Your Costs

Cost-cutting can be a huge step for a business. You have a hundred different costs that you can cut down. First, talk to the vendors that supply you the materials for your products. Quit the marketing campaigns that are not generating any returns. Reduce your operational costs as well. If possible, ask your workers to work from home to save yourself some money on office space. In fact, you can cut down your computer, internet connection, utility, etc. costs if you can make your employees work from home. Reduce office hours if your calculation tells you that certain hours are not as productive as much as they cost you.

Pay Your Debts First

A common mistake that business owners often make is treating debts as a secondary concern. You might feel tempted to buy more inventory, fulfill some orders, and pay the overhead expenses first, and then worry about your debts. However, this strategy can go against you. You will never be able to pay your debts if you make other business expenses first. The thought of repaying the debt is stressful. You can’t make great decisions when you are stressed. You will see a huge improvement in how you tackle your business related matters once you have paid off your debt.

Consider Consolidation

You can consolidate your loans to make things easier for you. What makes debts scary and stressful for business owners is that there can be many of them. Even if you pay one debt, you then have another to worry about. This format can be mentally devastating for the business. Moreover, you might be paying different interest rates on different debts. Consolidation helps you simplify your debt repayments.

First, it combines all the debts that you have to pay into one. As a result, you have to make just one payment every month that serves as the repayment of all your debts. Secondly, it helps you take advantage of a more affordable interest rate. The fact that you don’t have a bunch of different credits knocking on your door every day can be quite relieving too.

Find a New Partner

You want to take this step only as a last resort. Of course, the sight of seeing your business shut down is more painful than anything else. That’s why you can make a new partner in business by offering some equity rather than letting your business sink to the bottom. You can ask your new partner to finance your business for the chunk of equity you are offering him/her. A crucial consideration here is not to offer too much equity. You don’t want to lose control of your business as a result of this deal. Offer only enough equity that keeps the new partner interested but does not make you lose your control over your company.

Concluding Thoughts

You must not forget that these are only the extreme measures to dig out of debt. The first cure for avoiding debt is care. Make sure you start with a solid business plan wherein you have sorted out your expenses and loans already. Sometimes, venture capitalists are not the best option to fund a business. In that case, you have crowdfunding options available. Using the latter option, you can fund your business amply without necessarily giving up equity too much equity, if any at all.

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Importance of Location for Your Small Business

Location

If you are thinking of starting a business that benefits from walk-in foot traffic, you have to pay attention to the location you choose. Whether it is a retail store, a motel, a restaurant or a spa, the right or wrong location of the business can decide its fate. Yes, some businesses reach the heights of their success at the oddest locations possible, but it is not very wise to keep exceptional cases in mind while starting a business. So, what role does a location play in the success of a business? Here are some important points for your understanding.

The Foot Traffic Matters

Now, the area you choose must have ample foot traffic for you to take advantage of. Of course, you are a business that benefits from the foot traffic, so you need a lot of it. For this purpose, you first have to look for commercial areas where people normally go for shopping. If there is no place available in the commercial area, you want to explore further to look for locations from where a lot of people pass. Think about your marketing as well. If you are going to use billboards, neon signs or vinyl for marketing purposes, you want them in places where people can see them. The more people there are at the location of your business the more they will notice your marketing signs.

There aren’t a lot of people at the location that you are considering for your business, you are already at a disadvantage. It shows that people don’t naturally walk in that direction when they are looking to do business. It is the same way on the internet. You bid for keywords that have the highest number of searches. You want to put your banner ads on websites that have a lot of traffic. In short, foot traffic matters.

The Buying Power of the Community

Before you choose the location, you must know the type of audience your business attracts. Are you a fine dining restaurant? Will you be selling low-cost meat burgers? You have to decide your location based on the type of business. If you are opening a fine dining restaurant, you want to open it at someplace where people have the buying power to afford expensive foods. It requires a lot of research for you to be able to find such locations, but the time you spend researching will always pay off in terms of a good return on investment.

Businesses in Proximity

A lot of businesses try to avoid having their competitors located close to them. But believe it or not, it is extremely beneficial for small businesses to be located near other big businesses. By doing this, your business benefits from the traffic of other businesses. It solves a lot of problems that can be detrimental to businesses at locations where there are no other businesses. The first benefit is that you already have foot traffic, so you can already move on to the next step of pulling those potential customers into your premises. Secondly, you don’t have to force people to walk away from their daily routes to come and do business with you.

If you already have a lot of similar businesses located around you, people already come there for that type of business. So, if you are opening a boutique in an area where there are many boutiques already, you can rest assured that people already come to this market for buying clothes.

The Expenses of Operation

This item has to be on your checklist of choosing the right location for your business, otherwise, you are going to regret your decision. Sometimes, you find a place that has high foot traffic volume and lots of other similar businesses in the vicinity, but the operating expenses are through the roof. The businesses that have already established might have adjusted according to those expenses, but things will not be the same for a starting business like yours. You want to keep your operating costs as low as possible. What if the area you are going to has private companies providing electricity?

What if the availability of clean water is a challenge at your desired location? What is the rent of the building if you are considering renting a place for the business? A starting business already has very thin profit margins. Add high operating costs to the equation and even those little profits will be gone.

The History of the Location

The location you have chosen has proven to be ominous for many businesses in the past, you have to dig deeper even if everything sounds right. When a lot of businesses have opened and closed at the same location, it is an indication of something wrong but not visible with a casual survey. You will have to be very careful in finalizing such a location. If nothing, it could be the owner of that building that might be an issue for its renters.

Some landlords are overly interested in their profits and do not care how much damage they are doing to a starting business with their demands.

Many small businesses need some favors and flexibilities from their landlords for them to be in a stable position. Some building owners will even lower your rent to allow you to establish first. If the landlord’s reputation is okay, check to see that the place is not a frequent picnic point for robbers.

Final Word

Many of the things mentioned above might sound basic or understood to you, but you will be surprised to know that many new businesses shut down because they fail to realize the importance of these same points. Believe it or not, you cannot take any of the points given above for granted. And while they might sound very understood and intuitive, lack of time and capital can often push you in a direction that you don’t want to go in. Stay tenacious to this checklist because a compromise at this point will give birth to several compromises in the months to come.

 

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