Where Do You Need To Spend Money In Business?

StrategyDriven Managing Your Finances Article | Where Do You Need To Spend Money In Business?No matter how good an idea you might have is or how excited you are to be your own boss, the truth is (and it’s a truth all entrepreneurs must remember) it’s hard to start a business. Over fifty percent of new businesses fail within the first five years, which may not be a pleasant thing to consider but it is a crucial one. It means you have to get things right from the beginning, if you’re to stand any chance of making it. Part of your success will be due to smart planning and investment – whatever money you have to start your business with, even if it isn’t much, must be used properly. Here are some ideas for the most important areas of your business to invest in.


If you ignore marketing, no one will know your company exists. This is why it’s essential not to cut corners or compromise on this aspect of your company growth – don’t try to do it yourself or hire a friend who is competent enough but not outstanding and who doesn’t really understand how digital advertising in 2021 works. What you must keep in mind is that effective marketing — marketing that succeeds – may not be cheap, but if you invest in quality, you’ll soon be making much more than you spent for it.

It is critical to understand your target audience and tailor your advertising and marketing to them, which means you and the company you choose to manage your marketing for you will need to do significant research ahead of time. If you do this correctly, your marketing money will go a lot further.


If you run a business, your website is likely to produce a significant part of your revenue. Even if you don’t sell goods directly via your site, it’s still the main way for potential consumers to contact you and find out more about you, so it must be safe and secure.

Those who want to use your website must be confident that their information is safe (particularly if they give you payment details). Keeping your website secure is something that every business must invest in. If you don’t invest in this area of your business, you could be hacked and cybercrime is expensive to put right. It might even cost you your business.


Technology is essential in business, and the need to be at the forefront of any new trends is becoming more and more crucial year after year. If you want to get ahead of the competition, one way to do so is to invest in cutting-edge technology. This will improve your reputation by showing that you are on top of things, and it will also help your customers and clients by making it much easier for them to use your services.

Instant messaging platforms, content management systems, automation, and even artificial intelligence can all be useful in your company’s day-to-day operations. However, you must be careful not to overspend, otherwise you may end up squandering money on technology that will never work for you. If you are thinking about automating your business you should look into what is RPA? Also known as robotic process automation, this technology can really help to boost your business and help with the running of your daily tasks.

Understanding Private Equity: What You Need to Know

StrategyDriven Managing Your Finances Article | Understanding Private Equity: What You Need to KnowIf you are looking for an alternative investment method, you might want to consider Private Equity investment. This involves investing in capital, also known as equity, that is not publicly listed or traded. The parts of a company that are available to be invested in are not publicly owned, quoted or traded on a stock exchange. Deciding if private equity is the right method for you can be tricky as it mainly comes down to your feelings on opportunities on a case-by-case basis. However, understanding function that private equity investments play and the opportunities they can offer businesses and investors alike will help you make these decisions further down the line.

Why Do Companies Opt for Private Equity?

The purpose of private equity is to raise additional funds in order to bring about a positive change in the company being invested in. This can cover situations such as growing a business (which requires ‘growth capital’ for expansion or development); financing operational changes such as restructuring to make the business more profitable; financing acquisitions of other companies; or delisting a public company in order to give it private status. The latter gives a company the opportunity to focus on long-term growth without the pressures of quarterly earnings reports. Private equity also offers businesses access to funds where they would be unable or unwilling to source financing from traditional sources such as business loans.

What Are the Different Types of Private Equity Funding?

  • Leveraged Buyouts involve buying out a company, improving it and then selling it on for profit. This is the most common example of private equity.
  • Distressed Funding is where money is invested in troubled or even bankrupt companies and turning them around by making necessary changes or selling off assets such as machinery, patents or property. This type of funding is also referred to as ‘vulture financing.’
  • Venture Capital is a form of private equity in which private investors (sometimes referred to as ‘angels’) provide capital to entrepreneurs. An example of this is the television program Dragons’ Den.
  • Real Estate Private Equity commonly involves funding commercial properties and Real Estate Investment Trusts. This type of funding involves higher minimum capital in comparison with other types of private equity funding and involves longer investment terms too.
  • Fund of Funds is the most accessible form of private equity. It primarily involves investing in mutual funds and hedge funds, which offer the opportunity to invest where you may not be able to meet the minimum capital alone.

What are the Benefits and Disadvantages for Investors?

For the investor, private equity offers the opportunity to invest in early-stage companies and ideas such as with venture capital opportunities. As with any investment opportunity, there are significant risks involved in private equity, but it presents the unique opportunity of funding companies and innovations that align with your personal interests. Using investment insights in order to gain full understanding of the opportunity at hand will be of vital importance for many private equity investors. Many people see private equity as an opportunity to invest in improvement and believe that firms seeking private equity are more likely to give higher returns due to their drive for growth.

7 Ways To Finance Your Business

StrategyDriven Managing Your Finances Article | Entrepreneurship | business finance | 7 Ways To Finance Your Business

Financing a business can be a big obstacle for new startups and established companies alike. It isn’t always easy or even possible to obtain funding through the usual channels, especially if you have no track record to show lenders or investors, and without the money required, it can mean that the business simply cannot succeed. However, there are some ways to obtain the money you need, and if you want to start or grow your business and need funds to do it, you can look at these options to see if anything will work for you.

1. Your Savings

It’s true that not everyone has any savings put aside, but if you do and there is enough, then you might consider using that money to fund your business. This can work out perfectly because there is no requirement for you to borrow the money from anyone else, and therefore your business won’t be in debt (although, of course, you will want to have the money paid back to you over time). You won’t be giving away any equity either, which is something that some business owners don’t like the idea of. Plus, if you do need to borrow more at a later stage, your business’s credit won’t be affected.

2. Your Investments

For those who like to make investments and trade, the profits made in this line can be something you can use to start your business or add funds to it when you need to purchase something specific that will, in turn, help you to make more money in the long-term. Investing doesn’t automatically mean that you will make a profit, which is why checking out the gold and silver price regularly and finding a good broker will help you. However, when you do make money, it can be ideal for your business.

3. A Business Loan

Possibly the first thought that will come into a business owner’s mind when it comes to finding money to fund their project is a business loan from a traditional lender such as a bank. It can work out very well, and with enough research, you will be able to find a variety of different loans with varying interest rates and special deals. You may not be eligible for all of them, however, and applying for too many loans all at once can damage your credit rating. Therefore, it is wiser to make appointments to speak to bank managers or investment advisors to find out what you can and can’t do, and what will work best for you. It may be exciting to find that you can borrow tens of thousands of dollars, but remember that this money must be paid back, and that can be the part that causes problems. Think things through carefully and only borrow what you know you can afford.

4. A Personal Loan

If your business has no trading record, it might be difficult to obtain the loan that you want, in which case a personal loan, assuming your credit rating will allow it, could be the ideal alternative. You take out the loan and then make a director’s loan to your company. The company pays you back each month, and you then pay your own lender back too. This way, you aren’t ever out of pocket, and you don’t have to worry about making repayments.

However, the vital thing to bear in mind with this kind of loan is that you are ultimately liable for it. It means that if the company cannot pay you for any reason, you still have to make the repayments for your loan. Make sure you have two or three months’ worth of repayments in a savings account just in case you need to pay the money back yourself.

5. Angel Investors

Angel investors are groups of people or individuals who use their money to fund businesses and projects that they think are interesting, have potential, and will bring them a profit. This last point is the most important of all because although angel investors do have the business’s interests at heart, their main aim is to make money from whatever they invest in.

The first step in obtaining an angel investor is to write an interesting and informative (and truthful!) business plan as this is what they will want to see before making any decision. You should also work out how much equity you are willing to give away in your business, and how active a role you want the angel investor to take. Some simply want to give you their money and leave you to get on with running the business, and others will want to have a more active role. It is essential you know how you want to do things before agreeing to anything, and don’t get carried away if someone offers you money; make sure you are happy with the deal first.

6. A Credit Card

Credit cards can be supremely useful, or they can be disastrous, and which outcome will depend on how sensible you are with their use. Funding an entire business on a credit card, especially if it is a personal one, is not a good idea; this can leave you in vast amounts of debt that you find difficult to pay off. Plus, the interest rates on credit cards tend to much higher than on other forms of borrowing such as a loan from a reputable company. However, for smaller business expenses a credit card can be ideal, as long as you pay as much off the balance as possible each month. Paying just the minimum amount will mean you spend a lot more than you would need to otherwise, and it will also take you longer.

7. Friends And Family

A loan from a bank or other lender might not be possible if you or your business don’t meet specific criteria, and an alternative might be to borrow money from friends and family. Ideally, you should have a loan agreement drawn up so that everything is legal, and so that everyone knows what is expected of them. This way, there can be no disputes, and you will know how much to pay and when, just as your friend or family member will know how much of a return they should be able to make.

Starting Business in Canada? Basic Tips to Follow

StrategyDriven Entrepreneurship ArticleWhether you are a Canadian or a new immigrant you might want to start your own company and be your own boss.

Statistics Canada showed in 2010 that 5.3% of immigrants started a business after living in Canada for a few years. At the same time, only 4.8% of Canadian citizens owned a private company in 2010. So, everything is in your own hands and all you have to do is to keep in mind the following information.

There are a lot of important things to consider about how to start a business in Canada. In this article, you will find the basic tips from financing and marketing to business planning in Canada.

Build Your Credit Score

If you are new to Canada, you may not have a credit history that banks can rely on to lend you the money for your startup.

There are several fast ways to build up your credit score. One of them is to build up your borrowing potential by signing up for a credit card. Make sure you use it with responsibility and in six months your credit score will slowly start to develop. Later on, you will be able to use it in order to finance your startup.

Pay attention to your credit score even after you’ve been approved for a loan as this is when problems may happen if you fail to repay the loan on time and in full.

Some lenders may approve your application for Canada loans for bad credit customers but it is not guaranteed that you will get the required amount and terms. Such loans are typically issued as personal cash advances rather than business financing options. Although, it may be enough to cover some small current business expenses.

Understand Canadian Culture

If you want your business to be successful in any country, you have to embrace its culture and understand local customers, what they like to purchase and how.

The best way to get immersed in a new culture is to join volunteer organizations and get involved in business associations or any other place where you can easily mix with people who know this country better and have lived here for a longer time.

After you’ve successfully built your local network, you may develop your business and make connections elsewhere.

Make Your Personal and Business Banking Accounts Separate

This piece of advice may seem obvious, yet so many business owners make the same mistake and start their own company not just out of a basement or an old garage, but also out of their personal bank account. Set up a separate business bank account that won’t mix with your personal one.

Also, make sure you have enough money to cover your personal expenses for at least six months while your company is getting started.

It always takes some time before the business becomes profitable so it’s always beneficial to have a good baseline. Even if you don’t have that money at the moment, you can start saving or find a job.

The website of the Government of Canada performs a useful page called Preparing to Work, which provides with additional information on how to land a job in Canada, tips on how to improve your English/French or get your credentials assessed. More than that, familiarize yourself with laws you will be required to follow as an entrepreneur, maybe even consult a business attorney if necessary.

Give your startup a fighting chance by creating a solid foundation with these basic for starting a business in Canada.

Money Saving Strategies For YOUR Business

Whatever your business, whatever its size and whatever industry you operate in, you doubtless walk the same fine line as any other business, the line between maximising your profits and keeping your operational costs down to a minimum. All SMEs need cash, not just to pay their bills and vendors, but to give them the liquidity that can help their business seize vital opportunities for growth.

There are many and diverse ways of saving money, from using heat tape to save on plumbing costs to filling your office with energy saving fluorescent bulbs but, as with most things, the difference between success and failure is strategy. It’s not enough to implement a money saving measure, it’s important to monitor its effectiveness by monitoring its effects on costs over a quarterly or monthly period, enabling you to strategize accordingly.

Here are some money saving ideas that can benefit virtually any business.

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Outsource your marketing

Marketing is not a luxury or a frivolity, it’s a vital tool in ensuring your business’ reach and longevity and it’s not an area where you should skimp. You may not find it prudent to outsource your entire marketing strategy. A potent content marketing strategy, for example, will most likely be based around your personal blog, which relies on the uniqueness of your knowledge, insight and experience.

Marketing campaigns can be tailored to suit whatever budget you choose to allocate to it, although it’s worth noting that marketing is one of the most prudent investments you can make. It’s important to build a good relationship with a marketing firm you can trust. They should be able to show you examples of previous successful campaigns and all their costs should be transparent and explained upfront with no hidden expenses.

Negotiating with vendors

A good relationship with your vendors is important, but it shouldn’t come at the expense of your business. If your vendor isn’t rewarding your loyalty then it may be looking elsewhere. Vendors face difficulties with the economy as much as any of their customers, and they should be making efforts to incentivize your loyalty. Most vendors would rather negotiate a better price with their customers than see them defect to another vendor who may lure them in with a special introductory price.

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Substitute traditional advertising with inbound marketing

The world of advertising and marketing is changing. There was a time when small businesses were limited to advertising on local radio or in local papers or (if they were big spenders) on a local TV network. Now, SMEs have a medium through which they can get their message across for free… The key is getting their leads to engage with it. If you’ve allocated a budget to old media advertising, it may be worth considering re-allocating it to Search Engine Optimization or a Pay Per Click campaign. You can even grow your reach organically through your content marketing campaign. Youtube videos, blogs, white papers, slideshows and webinars are great ways of expanding your business’ reach at little or no costs.