Running a successful business is hard work, not least in the post-pandemic era. Consequently, then, the need to avoid the threat of wasting your resources is greater than ever. Otherwise, you may find yourself in a seriously damaging situation.
Here are five simple steps to avoiding waste in the key areas of operation. Getting them right won’t suddenly guarantee success, but it will certainly boost your chances.
1. Implement Operational Analysis
Most business owners like to think that their operations run smoothly. In reality, almost all companies could do better. The Overall Equipment Effectiveness method is a very powerful tool. It can lead your business to greater success by improving production speeds and accuracy. All companies now rely on machinery like never before. So, you simply cannot afford to fall into the trap of assuming everything is perfect.
With the right analysis model in place, you can quickly correct any shortcomings.
2. Seeking Value For Money
In business, you will inevitably make a wide range of purchases. From materials to services needed to support the operations, it’s imperative that you get the best value for money. Getting a better deal on electricity, insurance, packaging supplies, and IT support can yield big savings. In turn, this will remove the pressure to generate more sales or charge larger prices. In turn, this can only put you in a stronger position.
Just be sure to remember that ‘cheap’ doesn’t always mean ‘value’.
3. Fully Utilize All Available Space
When looking at overheads, the commercial property rentals or purchases will naturally sit at the very top of the list. As such, it’s imperative that you learn to make the most of it. Click here to learn more about the best storage solutions for warehouses, store floors, and factories alike. On a side note, you may wish to consider outsourcing some jobs as this will conserve valuable room for other tasks. IT and customer care are two common options.
When you make the spaces work harder, it can save you from premature expansions.
4. Know Your Audience
Building a customer base is a difficult but very rewarding task. While every entrepreneur knows that they must spend money to make money, you can’t fall into the trap of simply throwing money at it. The harsh reality is that a lot of demographics won’t be interested. Identifying your place in the market allows you to prevent marketing budgets being spent on the wrong people. As such, conversions should soar even with reduced spending.
Better still, you’ll find it a lot easier to work out which marketing plans have worked.
5. Tax Requirements
Meeting financial obligations is non-negotiable. However, many entrepreneurs make the mistake of doing it in-house. While it may seem like a cost-cutting strategy it’s not. Accountants know where deductions can be made, which will easily cover their fees. You can click here to find business accountants for your firm. When the financial savings are coupled with the fact you can spend more time actually working on the business, it’s a no-brainer.
When time, money, and resources are used in the right way, success will follow.
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Everyone is different in terms of how hands-on they want to be with their money management. Some are content to turn over their funds to a reliable investment manager (read more about investment management here). In contrast, others want to be more involved in the day-to-day decisions regarding their money. But wherever you are on that spectrum, here are four topics you should talk over with your investment manager.
Your Timeframe
It’s pretty evident that your preference for long vs shorter-term investments will depend on your age. However, even if you are relatively young, you may have needs that you are planning for, such as higher education or starting your own business. Or maybe you are in such a good place that you can plan on retiring early! Whatever your situation, a discussion about when you need to realize the returns on your investments needs to be on the agenda when you meet with an investment manager or financial advisor.
Risk Tolerance
The amount of risk you are willing to accept is a hugely personal decision, though it should be, in part, dictated by some life circumstances. If you are older and looking to retire soon, you will probably want your investments to be at lower risk. You don’t want to lose everything just as you are hitting your golden years. But if you are younger and just starting your retirement savings investments, you might have a higher tolerance for volatile but potentially high yield investments. Or you may just be cautious by nature or a daredevil. Either way or any way in between, it is an important conversation to have.
Diversification
How much diversity you want to see in your portfolio is closely related to your level of risk tolerance. Putting all your eggs in a high yield basket, so to speak, can have a big pay-off but also makes you highly vulnerable. Having your assets spread out in many different places mitigates that risk, but it might be frustrating if you have a limited investment in a fund, or market, or company that takes off. You might want to learn how to buy Bitcoin or consider angel investing as alternative options. You and your investment manager should discuss the possibilities, including strategies for mixing lower and higher-risk investments and making different kinds of investments.
Your Values
You may not care where your money is, so long as it is busy making you more money. But many people see investing as a form of supporting the practices of a business or industry in a very literal way. In the 1980s, many investors divested from their portfolios in South Africa to withdraw support from the Apartheid government. Since then, there have been various divestment movements, and there are funds available to invest in that support certain societal goods, like green energy. The saying is that you should put your money where your mouth is. Think about the values that are most important to you and how those values are reflected in society. When you meet with your investment manager, go over what is important to you to develop an investment strategy that honors your ethics.
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Managing a start-up involves skill, dedication and an ability to multi-task. When you are getting your young business up and running, you will likely have to prioritize. When your funding is limited, it can be all too easy to neglect invisible threats like cyber-attacks, however, doing so can signal disaster for the future of your company.
Your Small Business Is Not Immune
Many entrepreneurs, start-up founders and small business owners believe that their company is small so that it can, essentially, get away with flying under the radar, when it comes to cyber-attacks. This point of view is very detached from reality.
One study found that nearly 45% of small and medium-sized businesses report having fallen victim to a cyber-attack in the past. A further 50% of those surveyed reported that they suffered from a data breach that targeted both employee and customer information.
There are a few reasons why a cyber-attacker might choose to target a start-up like yours. Firstly, cybercriminals are aware that small and young businesses tend to have fewer cybersecurity measures in place. For this reason, cyber-criminals might choose to target your business simply because it is easier for them to target you than a more secure company.
Secondly, it is common for cybercriminals to target small businesses as a means of gaining access to larger businesses. One example of this is the 2013 Target cyber-attack. The cybercriminals gained access to Target by first hacking a small partner company, the local heating, ventilation and air conditioning company. This cyber-attack resulted in a huge customer data breach that was eventually settled for a sum of $18.5 million.
The Effects of a Cyber-Attack Can Be Devastating
You might not be going to suffer consequences quite on the same level as Target’s historic settlement, but even a low-level cyber-attack can be devastating for a young start-up. A cyber-attack can affect the long-term health of your business in a variety of different ways, such as:
Reputational Damage
Reputation is everything in business, especially for young start-ups that have so much to prove. A successful cyber-attack can ruin your reputation, a consequence that can forever tarnish the name of your business.
Financial Damages
There are many reasons why a cyber-attack might result in financial damages for your start-up. A cybercriminal might gain access to your data and products to hold them for ransom, or you might be liable to legal consequences as a result of a data loss.
Loss of Productivity
Downtime caused by a cyber-attack could result in a huge loss of productivity that could last for hours or weeks on end.
How Start-Ups Should Protect Against a Cyber-Attack
As USWired outlines, the most effective way of protecting your start-up against the threat of a cyber-attack is to outsource your IT services to experts. With the help of an expert, you will be able to gain access to a customized security solution that meets the needs of your business. This solution can be both proactive and reactive to reduce the threats of a cyber-attack.
In addition to employing the help of a cybersecurity expert, you should also train your staff. Educating your staff about possible cybersecurity threats, and the best ways to stay safe will help you to further reduce potential threats. Since some forms of cyber-attacks, like phishing attacks, target uneducated people, training your staff can be a very effective line of defense.
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When we are talking about the value of something in an economy and all over the world then the main factors which determine the value of something are the demand and supply. Here when the demand rises for something, it also leads to the rise in price for the same. And if the supply increases for something then it eventually results in the decline in the price for the same.
Now the main aspect which we all need to consider here is that when the central bank is going to increase the money supply then it will obviously be going to result in a fall in the actual value of money. So, the exchange value of money will decline, which simply leads to inflation.
About Issuance of Bitcoins:
If we relate the above given demand and supply scenario with bitcoins, then we already know the fact that bitcoins can only be issued upto certain limit that is 21 millions. This means there will be no more bitcoins after it reaches its issue limit of 21 million bitcoins.
Now the supply of 21 million has not been fulfilled yet. So, the more bitcoins can certainly be issued at this point of time. Hence, the more supply can absolutely lead to fall in prices.
But this fact doesn’t prove that the value of bitcoins is going to decline in the near future. Because the value of something can also be determined with the demand and supply of relative goods where the value of one such good usually goes down as it sees the increase in supply of the same. Here the relative goods which we are talking about are the bitcoins and the money currency as well. And the fact of affecting the value of one good with another has been proved in the lockdown situation.
Issuance of Currency in Pandemic:
During the pandemic conditions all over the world, almost every country has issued huge amounts of funds in the form of its currency in its respective economy to meet the requirements of the people. This means the money supply actually increases during the Covid-19 pandemic situation. And the increase in supply eventually decreases the actual value of money that results in inflation.
Further, this overflow of money currency in every economy makes people dependent on it for the purpose of exchange. So, the focus of people during this pandemic shifted towards monetary currency from bitcoins. And the fall in the demand of bitcoins for exchange leads to decline in the price of bitcoins as well. That is why it has been mentioned that the inflation all over the world is the true reason for the declines in the bitcoin price.
Bitcoins: The Hedge Against The Inflation:
Now it has already been proved that the reason for the rise in inflation is generally the increase of money supply in an economy in the long run. Further, Bitcoin is the relative good for money which defines the demand for one good will decrease with the increase in supply of another good which actually has been proved during the pandemic.
But there are many economists who literally ask investors to hold the bitcoins as hedge against the inflation and they are absolutely not so stupid to do that. And this is absolutely because of the limited number of bitcoins that is 21 millions and which cannot be issued more than this value. So, this can be termed as an exception in the theory of relative goods.
This also defines that you can actually start accepting bitcoin in your business. Because the number of bitcoins is going to be limited in future. And when the supply is going to be stopped then demand is certainly going to rise as compared to the available supply of bitcoins in the cryptocurrencies market. This fact clearly defines that the more demand for bitcoins in future will result in higher value of bitcoins which you are going to hold with you in future. Hence, this is the real time when you can actually start accepting bitcoins for your business in exchange for your goods and services.
Conclusion:
From the above discussion, it has been clear that people generally react to the news, facts and rumours as well related to some particular markets which eventually affects and decides the demand and supply level of that commodity whether its financial or not. And this is the same scenario with the money currencies whose value declines with the overflow of funds in a particular economy which creates the situation of inflation. But you still have the choice to deal with this long run inflation by hedging the bitcoins against it. So, start accepting bitcoins now and reap the benefits in future.
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Individuals looking to purchase a branch of an existing business might find they must sign a franchise agreement. This binding contract outlines the terms and conditions for the franchise as dictated by the franchisor. Each franchise must adhere to all terms and conditions or risk losing its license. The power dynamic between the two parties differs from that seen with most contracting relationships, and the franchisee must understand this. This agreement governs every aspect of the franchisee’s business and the role of the franchisor.
The franchisee has little room, if any, for negotiation, which is why they must understand the components of the contract before signing any documents. This helps in preventing the parties from becoming involved in a lawsuit over a failure of either party to live up to these terms and conditions. However, individuals must know what a franchise is, the terms of a standard franchise agreement, and any requirements before signing the agreement. This helps to ensure there is no question the franchisee is making the right choice.
What Constitutes a Franchise Agreement?
Individuals must understand what makes up a franchise agreement to ensure the document they are signing legally qualifies as this type of contract. The Federal Trade Commission (FTC) has established a definition of a franchise, referred to as the FTC Franchise Rule, to clear up any confusion about which businesses fall into the category. According to this rule, a business must meet three general requirements to be considered an official franchise.
A franchisor brand and franchisee’s business must be substantially associated and share a common brand. The franchisor maintains control over how franchisees use its brand in business operations or provides meaningful help in this area.
Each franchisee remains an independent contractor rather than a joint employer. As a result, the franchisor controls brand standards but doesn’t receive say in the franchisee’s human resources or daily business operations. As long as they adhere to the brand standards requirements, these areas fall under the control of the franchisee.
The franchisee pays a fee for the right to operate a franchise under the franchisor’s trademark. This fee may be a one-time payment when the relationship is established or an ongoing fee, although there are certain exemptions both parties must know of.
States may also establish laws regarding the definition of a franchise. The agreement serves as a license that dictates the rights and obligations of each party and protects the intellectual property of the franchisor. Furthermore, it ensures consistency among the franchises. However, the agreement allows for some flexibility to ensure the franchisor can adapt to changing times and remain competitive. Nevertheless, the agreement allows each franchisee to manage its independently owned business daily while adhering to the brand standards. This remains a key component of a franchise agreement.
Standard Franchise Agreement Terms
Franchisees agree to adhere to certain requirements and regulations in exchange for benefiting from a provider business model. The franchise agreement outlines each provision the franchisee agrees to, and a thorough understanding of the provisions ensures a smooth partnership between the franchisee and franchisor. What are some things a person might expect to see in a franchise agreement?
Grant
When a person or entity enters a franchise agreement, they receive limited use of the brand’s trademark images. This includes slogans, logos, images, and more. Furthermore, the franchisee receives the right to use the franchisor’s operating procedures as outlined in the agreement. This permission is referred to as a grant but does not allow the franchisee to use these items freely. The agreement must clearly state any expectations and limitations. For instance, a tire company operating as a franchisee may be given permission to advertise on social networks using the brand logo and images, but cannot create custom hats and sell them to advertise their specific location.
Fees
When the two parties enter a franchise agreement, the franchisee typically pays an initial fee. A continuing fee is then remitted on a predetermined schedule to maintain the agreement. In addition, the agreement often includes multiple side fees. For instance, each franchisee contributes to an advertising or brand fund the franchisor uses for brand marketing purposes and other purposes defined in the contract. Potential franchisees need to review this information carefully to ensure they understand what they are responsible for when it comes to additional fees.
Territory
If the franchisee will open a brick-and-mortar location, they need to know their territory within a specified geographical area. Multiple locations of the same franchise in proximity to one another could hurt the revenue for each location. The franchisor should prevent this by clearly defining territory limits for each franchisee. Some franchise agreements lack this information, as the franchise agreement contains no information concerning exclusive or protected territories. However, the territory specifics need to be defined. Furthermore, franchisors must deal with the reservation of their rights inside each franchisee’s territory. This includes internet sales and alternative distribution sites.
Signage plays a role in territory rights. For example, certain restaurants today have a location inside a shopping mall and another in the parking lot. They cater to different clientele, as the location inside the mall hopes to lure hungry shoppers. The exterior location hopes to attract those driving by and individuals who wish to pick up food without leaving their car. The franchise agreement should outline where each location can place signs.
Time Limit
Most franchise agreements come with an end date and information about renewal rights. Not only will the document list the length of the relationship, but the agreement should include information about the rights of a franchisee successor to enter a new agreement and location upgrade requirements. Detailed information such as this helps to minimize disputes in the future, as both parties know what they are agreeing to before they sign the document.
Training and Support
Franchisors usually provide new franchisees with training and support, from site selection to quality control. They do so to ensure the brand remains properly represented at all times during the agreement. The level of support varies by the franchisor and the documents should outline this.
Proprietary Data
Intellectual property and proprietary data remain the most valuable assets of a company. Franchisees receive access to this information temporarily. However, the franchise agreement should outline exactly how the franchisee may disseminate confidential data and trade secrets. Furthermore, this information must be state specific to avoid any issues.
For example, a franchisee may not share customer information, standard operating procedures, or other sensitive data with people outside of the franchise. Doing so violates the franchise agreement and may lead to the franchisee losing their license without reimbursement.
Criticism
A franchisee might find they are unhappy with certain portions of the franchise agreement. However, under many agreements, the franchisee remains prohibited from sharing these criticisms. In addition, the agreement should outline what happens in the event of a breach. In certain cases, the franchisor receives the right to end the agreement without reimbursing the franchisee.
Times have changed and many companies now take a political stance. This could lead to criticism of this stance rather than the brand. To avoid this, a franchise agreement might state franchisees cannot make major investments or campaign donations without receiving permission from the franchisor. This information appears in the franchise agreement.
Indemnification
Most franchise agreements contain an indemnification covenant. If the franchisee acts negligently or commits some wrongdoing that harms the franchisor, the franchisee becomes responsible for any losses related to their actions. The franchisee must know of all expectations and ensure they remain in adherence with all safety regulations regarding the operation of their business.
For instance, a franchisee may sell food that has passed its expiration date. Doing so leads to customers becoming ill and suing the company for damages. The franchisee must reimburse the franchisor for any losses experienced because of this behavior. A franchise owner might wish to invest in indemnity insurance to protect themselves in the event of a problem.
Right to First Refusal
A franchisee might find they wish to sell or transfer the business. Before doing so, they must alert the franchisor. At this time, the franchisor may exercise their right of first refusal. If the franchisor declines to do so, the franchise owner may sell or transfer their interest.
Termination of the Agreement
All franchise agreements come with a termination clause that details how either party can end the contractual relationship. This clause shares key terms regarding the timing of the notice, procedures each party must follow, and how they will handle damages from an early termination.
Non-Compete Clause
Franchise agreements often come with a non-compete clause. This clause prohibits the franchisee from opening a similar business for a specified period after dissolving the franchise agreement. In addition, it may state a distance the franchisee may open a new business upon dissolution of the franchise agreement. Each state establishes the level of restriction permitted in a non-compete clause.
As with any legal document, each person must carefully review a franchise agreement before either party signs. Consult with a business attorney to review the documents, as this added step ensures they answer any questions before the franchisee enters the agreement. The cost of the consultation is minimal compared to the legal fees each party will accumulate if a problem arises. Working with an attorney to review the agreement reduces the risk of this happening.
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Running a successful business is hard work, not least in the post-pandemic era. Consequently, then, the need to avoid the threat of wasting your resources is greater than ever. Otherwise, you may find yourself in a seriously damaging situation.
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