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How To Impress Potential Business Investors

StrategyDriven Managing Your Finances Article |Business Investors|How To Impress Potential Business InvestorsNot all businesses require investors, but if yours does because you want it to grow more quickly, you can’t keep up with demand, or you can see that it will be much bigger than you can handle on your own, you will need to be able to impress those who might invest their money with you.

When you meet with investors, you have one chance to get your pitch right and let them know why they should give you their money and not invest it elsewhere. This is why you need to be wholly prepared beforehand. Here are some tips so that you will be prepared and ready to be a success.

Know Your Figures

What investors are going to be most interested in is the financial aspect of your business. It’s true they may also love what you do – in fact, it certainly helps – but this is not the only reason they will invest. They need to know that they will make a return on this investment; this is how they make money, and they won’t want to lose.

You will need to really know your figures if you are going to impress potential business investors and prove to them that their money will grow if they put it into your business. You will therefore need to be sure of:

  • How much your goods cost to buy
  • What your margins are
  • How much profit you can make
  • What your other outgoings out
  • What potential growth there is and over how long

Knowing these figures will help your investor decide whether it is worth them investing with you and see that you understand your business and business in general.

Show Them You’re Serious

An investor will need to know you’re serious about your business before they will invest. The last thing they want to do is give you the money you have been looking for, only to find that you grow tired of this business and want to move on to something else. If you can show that you are serious about what you are doing and that you have gone to great lengths to get it this far, they will be more comfortable investing.

One way to show how serious you are is to have a professional website. Investing in this and having experts create it for you is proof that you aren’t going to give up and do something else any time soon. Your website is also a great way to showcase what you do and is therefore an easy place to direct potential investors if they want to see exactly what you do. Make sure it is up to date and contains all the relevant information they will need to see.

You can also show you’re serious by having a thorough, up-to-date, well-thought-out business plan. This will show that you have considered where you want the business to go and what you want to be able to do with it in the future, whether that’s finding the top places to buy a second business to add to your portfolio, selling your current company when it reaches a certain level of profit, or anything else.

Prove That You’re Different

It is relatively easy to set up a business these days, thanks to technology. The fact that jobs are sometimes difficult to come by is another reason there are many new businesses being created; people are making jobs for themselves.

You will need to show any potential investor that you are not only different but better than your competitors. Show them what problem you are solving and how your business is solving it, for example. You can also show them evidence that you are an expert in your field, making your business the one that people are more likely to come to.

Address Possible Issues

You’re eager for your business to change the world and solve existing issues, which is fantastic. However, this is insufficient information to persuade investors that your prized project is going to work out and won’t fall apart when it’s put under pressure.

Consider the potential problems that your project and brand could encounter in the future. They should be highlighted or perhaps given their own section in any presentation you offer your potential investors. Investors want to know that their money is secure even when things aren’t going well. The greatest impression you can create is to show them that you know how to solve issues and that you’ve thought ahead to what they might be.

What Is A Net Working Capital And Why Is It Important?

StrategyDriven Managing Your Finances Article |Net Working Capital|What Is A Net Working Capital And Why Is It Important?Many, if not most, businesses need money to develop, survive, and grow. Organizations need the right amount of cash to meet both short-term and long-term needs without high risks of ruining their businesses. Thus, a stable and sufficient net working capital should exist within these companies’ financial accounts.

Net Working Capital: A Brief Overview

Perhaps the simplest definition of net working capital is money that a business has in its bank account. It’s also the measurement of the liquidity, efficiency of operations, and overall financial health of a business entity. Therefore, if a business possesses a working capital of good standing, it can grow through various investments.

Note that it’s possible to grow the net working capital through various means. Organizations can produce additional sales, build long-term relationships with clients, and develop products and services. It’s also possible to acquire additional working capital by borrowing the cash from reliable lending corporations.

Having a lender loan the cash you need to start and maintain projects might help your company grow. You can use the acquired money to purchase equipment to streamline processes or hire additional workers to finish tasks quickly.

Calculating Net Working Capital

Always keep in mind that money is a finite resource. Hence, it would be best to learn how to calculate working capital to let you know the amount of money needed to develop, sustain, or grow business operations.

Don’t worry, as it’s not severely challenging to calculate your company’s working capital. It’s as straightforward as subtracting your business’ current liabilities from its current assets.
Your firm’s current assets may include (but not limited to) the following:

  • Current inventory
  • Cash and cash equivalent
  • Accounts receivables
  • Prepaid expenses
  • Marketable investments and securities
  • Other liquid assets

As for your current liabilities, these may include the following:

  • Accounts payables
  • Taxes
  • Accumulated expenses
  • Interest payables
  • Short-term loans

For example, a small business wants to calculate its net working capital and compiles all the data required to acquire this figure. After gathering all the necessary receipts, documents, and files, the company might find its current assets at USD$100,000. They then need to collect and calculate payables, such as taxes, loans, and other expenses. Now, it finds that the business has USD$45,000 in current liabilities. Using the formula of subtracting current liabilities from current assets, the net working capital is USD$55,000. Hence, the company could use this amount to cover operational costs and meet other short-term obligations.

It’s highly recommended for entrepreneurs to know how to calculate their company’s net working capital. The ability to be aware of your business’ income sources helps you check whether you have a steady income source to thrive and survive.

Importance Of Net Working Capital

Without a sufficient amount in one’s net working capital could lead to mild or serious issues. Avoid these concerns by looking at the various reasons why a working capital is essential in developing and maintaining a business.

  • Maintain Smooth Operations

Maintaining smooth business operations is crucial to the profitability of relatively any company. A successful business thrives on providing products or services that people want to purchase.

Providing your business with a stable and sufficient working capital helps the organization maintain smooth operations. Otherwise, you might encounter certain problems, such as the lack of funds to provide workers’ salaries.
If this scenario happens, it could lead to more serious risks. Your employees might go on strike and may not return to their working stations until you provide them with their just financial compensations.

Another problem you might run into is the lack of stable finances to continue producing goods for customers. If your sales representative tells your customers that you don’t have enough stocks for a particular item, you’re going to lose valuable sales. Furthermore, customers might opt to purchase from your competitors instead, and this scenario accounts for lost short-term and long-term sales opportunities.

  • Improve Company Earnings And Profitability

Many small businesses don’t have the financial resources available to sustain their operations and make them grow, unlike large corporations. Therefore, it might be tough to create a profit without knowing and possessing financial stability in the business’s net working capital.
If so, begin by asking yourself how you plan to handle your working capital. Using the formula mentioned above would calculate your company’s net working capital to know the budget for your short-term and long-term projects. In turn, you can figure out the company’s earning potentials and maintain profitability to access eventual growth opportunities.

  • Minimize Costs While Maximizing Returns

Knowing your company’s net working capital also helps you minimize costs while maximizing revenue potentials. It’s because knowing the figure in that aspect enables you to balance various benefits versus the costs.

For example, you might find that your organization is holding high inventory levels. Note that several benefits may come from having plenty of stock to offer to clients. That idea might not always be the most efficient solution, especially for startups and small businesses.
Excess inventory will take up valuable storage space. Hence, your company may not have enough room for other products, unless you’re willing to spend extra cash for additional storage. Furthermore, you need to add the costs of financing and insuring the inventory in case of losses. In turn, the excess stocks may lead to more costs for your organization if you can’t dispose of them soon.

It’s possible to figure out the right number of products needed for your business’ storage while satiating the needs of your loyal customers without spending too much of the company’s financial assets. You could achieve the answer to this particular concern by calculating your business’s net working capital.

  • Helps Identify And Solve Efficiency Issues

When your company has problems with the flow of funds, it might be because you may have too little money for your accounts receivables. But you might not know about this issue if you don’t know how to calculate for your firm’s net working capital.

In turn, you can identify and solve efficiency issues in your business. Identifying your organization’s working capital allows you to look at where your money is coming from and where it’s going. Thus, you can formulate plans to solve productivity issues to increase the business’ cash flow.

Conclusion

A company’s net working capital helps meet its short-term goals, which might lead to long-term solutions. Calculating the working capital and understanding its importance allows entrepreneurs to develop actionable strategies and implement projects based on their spending power.

Operation Getting More Value In Business

As a business, providing customers with value for money. However, you mustn’t forget to ensure that your spending generates the best results too. Making your capital work harder will lift a great weight from your shoulders while also enabling you to pass some of the savings onto your clients.

So, how exactly can you ensure that all decisions are made in the best interests of your customers? Here’s all you need to know.

StrategyDriven Managing Your Finances Article | Business Financies

Assemble The Strongest Possible Team

The majority of business matters will be handled by your employees. Therefore, getting the recruitment process under control should be the first item on your agenda. This should be followed by an ongoing investment into their development both individually and as a team. The best ways to achieve this are through training and team building exercises. When they work harder, you’ll get more value for money on a daily basis. There is no stronger foundation for success.

Keep Assets In Good Health

Taking care of your business assets will unlock greater performance levels and prolong the lifespans. Keeping business vehicles in good health with the right gas oil is a significant step in the right direction. Meanwhile, computer system updates should bring telling results too. Even though the daily maintenance can have a very significant impact, you must learn to spot signs of faults. The sooner you act, the sooner you’ll restore their health. This should save a lot of money in the long run.

Research Your Purchases

You already know that customers want to get the best value for money when buying products or services. You should take a similar approach before completing your transactions. Simple ideas like using price comparison sites can work wonders. Likewise, you’ll want to check that any company you plan to do with business can be trusted. Falling victim of fraudulent activity or inadequate supplies will harm the venture and could be very hard to recover from. It’s best to be safe rather than sorry.

Know Your Demographic

Marketing is an area where only the best will do. Efficient marketing should be built around targeting a key audience. It’s impossible to impress everyone, but smarter research and insights will allow you to focus on the people that are likely to purchase. SEO, PPC, trade show stools, printed materials, and social media marketing can all be used to great effect. Remember to analyse the success of every campaign and make the necessary adjustments for ongoing success.

Avoid Bad Debts

While you obviously want to get as many sales as possible, you must not force thing when dealing with repayment plans. Good sales figures count for nothing if the money never arrives. Understanding bad debts and how to avoid falling victim to them is vital. While some people will default on payments, but you don’t want to let this become a major problem. Protect yourself in this manner, and your hopes of maintaining a positive cash flow will be greatly increased.

When the financial elements are under control, you can focus on actively driving the venture in the right direction.

Get That Business Budget Down

StrategyDriven Budget Management Article |Budget|Get That Business Budget DownHaving a business budget is something that most businesses actually ignore. They know there’s a margin to stay close to, but there’s not really a definitive figure that they have to try and meet. So it’s so easy for the budget to get completely out of control, leading to stress and financial turmoil along the way. It’s one of the main reasons why so many businesses go into administration, even those that you think will go on forever. And it all starts with basic budget management that so many businesses seem to be ignoring. So, we’re going to try and help you out, and see if we can get your business budget down. There will no doubt be so many different areas that you need to work on and make some cuts to, and it won’t mean that quality is reduced either. Half of the time, businesses are cautious as to cutting a budget, because it can often mean a knock on effect. But we’re going to avoid all of that, and give you some simple tips that should help you to get that budget down.

Your Office Budget

So there will be multiple different things that you’ll have purchased for your office over the years, that will now be helping to make your business run as a well oiled machine. Technology is the main part in that, then your employees. So with technology, it’s definitely easy for it to drain your budget each month, simply because it’s harder to manage. It might be so much cheaper for you to visit websites such as www.24hourtek.com, and see if you could benefit from using some of their services. By outsourcing your IT management, you’re not only going to save your business money in the long run, but you’ll be doing it by saving some man power. From software updates to server management, there are companies who will do it for you all in the background!

When Marketing Starts To Add Up

Marketing is one of the biggest budgets that a business seems to have, especially as it begins to grow and evolve. There becomes more of a need to market new products and services, and to keep your business in the race. But when a marketing bill starts to add up, it really does add up. So rather than outsourcing everything you do, simply because you don’t understand it, think about keeping some of it inhouse. The more you understand marketing, the easier it will be to actually manage it in house, and even do it more effectively than if it was to be outsourced.

The Areas You Want To Avoid

There are definitely some areas that you want to try and avoid cuts, and that’s with your employee wages and benefits. So many companies don’t get their employees to sign a contract, and they then use this as a way of being able to cut pay. But the last thing your company should want, is a bad reputation based around employees and the management of them, so always avoid this area when making cuts!

Geting to Grips With Your New Business’s Finances

Starting a new business can be challenging, especially if you don’t have any financial training or experience. Your company will grow with wise financial choices and decisions, and there’ll be little room for error, especially in the first tentative months. However, this does not mean that you can’t do a little research and ensure that you seek the right advice so that your startup can begin to thrive, and you’ll become financially savvy as you evolve with your company. Therefore, it’s worth taking some time and making an effort to better understand your income and expenses. You’ll also need to work on where you’re you’re going to invest, save, and improve regarding your cash flow.

The more knowledge and understanding you possess surrounding your business finances, the more clarity you’ll have when it comes to important decision making and spending. It can be a challenge to gain the interest of other investors and those who will help you to take your business to the next level, especially when you’re a small fish in a big pond. Therefore, you must get the basics right regarding your money so that your success and reputation can proceed you in a meeting or networking event. The following are some ideas, inspiration, and advice for those who need a confidence boost regarding their business and its finances.

Get Yourself A Great Rating

When you’re trying to be careful with your funds, and save wherever you can; you might think that getting yourself a credit card might be a bad idea. However, it’s worth getting one so that you’ll have a credit rating or score for you and your business. Without a credit score, it can be difficult to gain investment or receive a loan, and you’ll probably need these at some point to invest further in your company. Take a look at the discover it review so that you can better understand how a credit card could work in the favor of your business. Alongside having a great credit rating; you’ll be able to receive rewards and even cash back on certain things when you use the card to spend, so it’s well worth looking into. As long as you’re prepared and able to pay your monthly bills back on time; there’s no reason a credit card and its resulting score, won’t be beneficial to your company.

Get Yourself Some Professional Advice

In order to ensure that you’re making the right choices regarding your money; you’ll to invest in expert help and advice. Hiring a reputable and qualified accountant to look over your finances, and advise you on what to do with your spending and saving, will give you the peace of mind that you’re making the right decisions for your business. They will be able to help you understand your monthly figures and targets, and they can suggest budgeting tools for when they’re not there; investing early on in expert advice will make sure that you reap the rewards further down the line.