5 Skills That Can Help You Grow Your Business

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5 skills to grow your businessRunning a successful business means more than just having a great idea. It also means having the ability to put that idea into practice and to build a strong company around it. To successfully create, and ultimately, grow, a business, a leader or owner needs to have a certain number of skills. While these aren’t the only skills needed to achieve business growth, they can be the most relevant.

Planning

When a business owner has the ability to plan, he or she is less likely to make hasty decisions or rush into poorly thought out ideas. Having a strategic plan for your company isn’t only useful for attracting investors or financing. It can also act as a roadmap for you and your employees, letting you see if you are on track when it comes to reaching certain goals, or not.

There are several tools out there that can help you develop your planning skills. For example, companies often use a SWOT analysis to decide whether moving into a new market or launching a new product will make sense. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It allows you to identify factors in each category. When you’re able to see what an idea’s strengths are compared to its weaknesses, and what opportunities are there, versus any threats, you’re better able to decide on the next steps to take and how to take them.

Ability to Delegate Tasks

Another skill that it is essential to have if you want to grow your business is the ability to delegate tasks. You can also view this skill as the ability to ask for help when you need it or the ability to recognize that some people have strengths that are different from your own and can use those strengths for the benefit of your business.

Delegating tasks is a skill because, if you don’t do it properly, your company can actually suffer. For example, if you hand off a task to an employee who’s not quite ready to handle it, or who has a lot on his or her plate already, there might be serious consequences when that employee is unable to complete the task as assigned. Delegation involves knowing where people’s strengths lie, what to assign to help them build on or play to those strengths, and giving them specific directions to help them get the task done well.

Communication

Communication might seem like it’s the same as the ability to delegate, but it’s actually much broader in scope. Without the ability to communicate clearly, you can’t take your company to the next level. You need to be able to speak with anyone who works with your company, from customers to vendors, to help you all get what you’re after and to try to keep everyone happy.  Communication is what keeps employees working for your company, instead of seeing if the grass really is greener somewhere else. It’s also what’s needed to attract investors who might want to finance your business.

Positive Thinking

While it takes more than positive thinking to build a strong company, having the ability to look on the bright side and see the glass as half full will go a long way to keeping your business afloat. One way to use positive thinking to run a business is to commit to coming up with a solution to a problem before you complain about it. Perhaps your company isn’t attracting the customer it wants to attract. Brainstorm ways to change that, instead of dwelling on the fact.

Curiosity

Being curious about what is going on in the world around your business, from what your competitors are doing, to what the major issues are of the day, will help you implement a plan for growth. Keeping up to date on new technologies and trends can help you make the best use of them when it comes to your business.

If you feel that you have the skills and are ready to grow your business, New Direction Capital can help. Contact us today to learn more about our virtual CFO services and the ways that we can partner with you to help your company grow.

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CrowdfundingIt’s not very often that changes are made to the options available to companies seeking financing. Yet, within the past five years, a new method of fund raising has become increasing popular. Known as crowdfunding, it opens up on the world of business financing not only for private companies, but also for investors who would not be able to finance a private company under former rules. We recently spoke with Al Migliaccio, the co-founder and CEO of JAMIS Sales Success, a crowdfunding consulting firm, about crowdfunding and what it means for businesses today.

Who Uses Crowdfunding?

Although a relatively recent term – Al states that the term “crowdfunding” didn’t exist just six years ago – many people are somewhat familiar with the concept. That’s mostly because of the entertainment industry, which has made crowdfunding a household name thanks to platforms such as Kickstarter. Everything from popular movies to small, low budget performance art pieces have raised funds on Kickstarter or similar. Al notes that the entertainment industry is the largest segment on Kickstarter, with around $300 million raised in that industry in the last year.

Crowdfunding isn’t only about entertainment, though. Companies producing smart objects or high-tech wearables also tend to do well with the format. The Pebble Smartwatch, launched in 2013, is an early Kickstarter success story, raising more than $10 million in 2012.

What Are Your Options?

In terms of format and the amount of money a company hopes to raise, crowdfunding isn’t one size fits all. According to Al, there are four categories of crowdfunding. His company typically works with businesses looking to raise between $100,000 and $1 million, but many other projects raise less than $100,000. The various categories include:

  • Social donations. Typically used by non-profit groups, when people donate to a project in the social category, they aren’t expecting to get anything back from the company.
  • Rewards. The rewards category is typically used by companies who are in the middle of developing a new product, but don’t have the capital to actually produce a prototype. People who fund the project usually agree to receive an early version of the product at a reduced price.
  • Lending. The lending or borrowing category has become a large section of the crowdfunding world, according to Al. Last year, around $6 billion was lent using crowdfunding platforms.
  • Equity. The equity category is somewhat similar to other types of equity financing. Investors agree to chip in a certain amount of money, in exchange for shares or a percentage ownership in the company. The major difference who can invest using crowdfunding.

Who Can Invest?

Passed in 2012, the Jumpstart Our Business Startups (JOBS) act changed the rules for investing in private companies for the first time in 80 years. One of the goals of the JOBS act was to increase cost-effective access to capital for smaller companies and to loosen some of the unnecessary regulations that previously prevented certain companies from getting capital. A major change brought about by the act was that it allows more investors to invest in private companies.

Previously, only accredited investors, individuals with a net worth of $1 million or more (not counting the house they own) or with an annual income of $200,000, could finance a private company. Part of the JOBS act opens the door to non-accredited investors, or people with more modest incomes or a lower net worth, allowing them to finance startups and small companies.

Should Your Business Use It?

It can be easy to look at crowdfunding and assume that is a way for a company to quickly raise some money and launch a new product. But, it’s not an appropriate option for all companies nor should it replace the process of coming up with a strategic plan or making sure that your business has a viable concept or product first. Al points out that his company has spoken with about 1,200 companies in the past 18 months. His company has issued just 90 proposals and has ended up actually working on just 15 campaigns.

Crowdfunding can be a suitable option for raising capital, but only once a business is ready to go or if a business has a concrete plan to take it to the next level. At New Direction Capital, we are available to help you put together a plan for your business and to help you explore the various options available for raising capital. Contact us today to learn more about crowdfunding and other options.

Photo courtesy of Svilen.milev CC BY-SA 3.0 via Wikimedia Commons.

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Buy Real Estate for BusinessAt some point, your company is likely going to have to decide whether it makes more sense to lease a property or building or to buy a piece of real estate. If the owner of the building you’ve been leasing decides to raise the rent at the end of the lease term by a considerable amount, buying another property might seem like the better choice, because at least the monthly mortgage cost will remain fixed and your company would be building equity in the property. But, there are other things to think about, beyond the cost of the lease versus the cost of a mortgage.

Buying real estate isn’t something your company wants to rush into. It is worth it to look at a number of factors first, and to weigh the pros and cons of those factors, before you decide to keep renting or to purchase property.

You Like the Location

One of the biggest considerations when deciding if it is the right time to buy is the location of the property. Location matters for several reasons. From a practical standpoint, if you are going to buy real estate, you want the property to be in an area that is easy for your customers and vendors to get to. If the choice is to buy a store front in an out-of-the-way location that is difficult to find or to continue to rent a store in a busy mall, the store in the mall will most likely win out, even if it has a higher monthly cost.

The ease of finding and getting to the property is just thing to think about. You also want to consider how accessible the location is. If you live in an area where many people drive instead of take public transit, is there a fair amount of parking near the property? Will people have to pay to park on the street or in a lot that is a block or further from the building or is there a parking lot on site?

Finally, you want to think about your company’s investment in the neighborhood. Can you see your business growing and thriving in the area and continuing to be there in the years to come? Or, is your ultimate goal for your business to move to a different part of the town or city you’re located in or even to eventually move out of state? If you aren’t planning on staying in the same spot for several years, buying property might not make as much sense for your company as continuing to lease a property.

You Have the Liquidity

While buying business property can cost you less in the long run, and can help your company when the value of the property increases, it is usually considerably more costly upfront than renting. Your business will most likely need to put a significant amount of cash down before you can get a mortgage. It’s useful to examine your company’s finances to make sure that you have the liquid assets needed to make a down payment on the property and that tying that cash into real estate won’t make it challenging for your company to reach other goals or won’t negatively impact your business if you run into cash flow issues a few months or years down the road.

You Have the Right Team

If you are considering buying real estate for your company or wondering if it is the right time to buy, it helps to have a knowledgeable team on your side. A virtual CFO can help you better understand your company’s finances, for example, and help you determine if buying is the best move to make financially. A real estate agent or broker can help you see what properties are available and whether they are within your company’s budget or otherwise meet your company’s needs.

New Direction Capital can help you put together a plan for your company’s future, whether that plan includes purchasing real estate or not. To learn more about how we can help your business with its strategies and plans, contact us today.

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Goals to Set for Your BusinessAs a business owner, you’ve probably gotten plenty of advice on how to reach your goals and on the importance of tracking your business’ growth and performance. But, if you aren’t sure what your company’s goals are, working on achieving them or on tracking its growth can be a moot point. The goals you set for your business do depend on what you hope to achieve for the year. You might wish to strengthen your team and to focus on reducing turnover or making the right hiring decision from the start. Or, your goal might be focused on the value and productivity of your company and on ways to raise or increase capital.

Improve Recruiting

Who you hire can have a big impact on the health of your company. If you’ve had to deal with not-so-great employees in the past or employees who quickly find a new position and move on, taking a close look at your recruiting process and making it a goal to improve it can help save your company money and stress over time. You can also set a specific recruitment goal for each quarter or for the year. Your goal might be to hire a team of developers to improve your company’s website or to make it more user-friendly.

Part of your goal to improve recruiting might be to better screen candidates before you offer them a position. In the case of a team of developers, you might have them take a test to see if they really have coding skills and are actually able to do what they say they can do.

Keep Employees Happy

Along with setting a recruitment goal or a goal to improve your hiring process, your company can also benefit from having a goal to improve your current employees’ happiness and job satisfaction. Take a look at your company’s turnover rate. If it is higher than you would like it to be, find out why people are leaving. It could be that your company’s leave policy is less generous than that of similar companies and that employees are moving on because they need something more flexible. It could be that the benefits offered by your business are fewer or less satisfactory than what an employee can get a similar company. Employees might feel that they don’t have much room for growth with your company and might move on to a business that offers upward mobility.

There are a number of ways you can work towards the goal of improving employee satisfaction and happiness. If your team feels separated or cut-off from each other, your goal can be to build more camaraderie in the office by having the occasional happy hour  or employee retreat. If people want to work at a company where they are able to grow and move up in their fields and positions, you can make it a goal to sit down with each employee and create a plan for where they want to be at the end of the year or at the end of several years.

Make Your Business Operations More Productive

It remains true that time is money, and increasing productivity at your company can help to increase its value, both to your clients and to your employees. Making your company  more productive means that you do get more out of less. There are a few ways to go about boosting productivity. One is to set a target and goal for each meeting or project. No one should wonder why he or she is sitting in a meeting or what the end result of a project is meant to be.

Raise Capital

Most likely, your company will need capital to reach any other goals it has or to continue to operate. Examining ways to raise capital and the best resources to tap into to get that capital are essential for the overall success of your business. Your goal can be to try to find a new source of funding during the year or to continue to develop a relationship with an investor or other source of financing.

Before you can work towards achieving your goals, you need to have a clear idea of what those goals are. If you are unsure what the next step to take is or how to clearly delineate your goals, the team at New Direction Capital can help. Contact us today and get started on planning your company’s goals.

Image courtesy of bplanet at FreeDigitalPhotos.net

What are some of the things you’d like to achieve this year? Does it include raising capital or keeping employees happy? We’d love to start a conversation so feel free to comment below!

 

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How Great Companies Track Revenue

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Revenue — it’s the amount of money your company brings in, through sales and services, before anything is taken out, such as the cost of a product or the expenses associated with it. Keeping track of revenue is a must if you want to your business to thrive and meet or exceed its goals. How your company tracks revenue matters, as well. The best companies use systems that give them a clear idea of what areas are working, what areas need a little help, and what areas are dragging the business down.

Methods that Work

One of the best ways to track how much money is coming into your business is to divide your revenue into a number of different streams, based on the source of the income. If necessary, you  might want to create categories based on location, too. For example, if you run a company that distributes produce and that has two warehouse locations, you can create a category for the amount of vegetables sold at location A, the amount of vegetables sold at location B, the amount of fruit sold at location A, and the amount of fruit sold at location B, and so on.

Dividing your revenue streams into categories allows you to see what areas are helping your business and which are not. Location A might not bring in a lot of revenue from vegetables, but might bring in twice as much revenue from fruit than location B. Knowing that can help you decide to reduce the vegetable side of the business and focus on fruit, for example, or decide to dedicate location A to fruit and location B to vegetables.

While creating some detail about each revenue stream is important when it comes to helping you see what aspects of your business are bringing in more income than others, it’s also important that the system you use  not become too complicated. In the case of the produce distribution company, it might seem that it makes sense to further divide the fruit category into apples, oranges, exotic fruits, but getting too detailed can end up complicating things, making it more difficult to see what is working for your company and want isn’t. Making each category very specific can also distract your from the larger picture. Apples might be more popular than oranges, but that doesn’t mean you want to stop offering oranges to customers, for example.

Analyzing Revenue

Analysis of the revenue should go hand in hand with tracking it. Once you know the amount of revenue your company brings in, you can begin to focus on ways to increase it or to maximize its value. In the case of the produce distributor, for example, vegetables not only bring in less revenue at location A than fruit, they cost the company more. In that instance, the business owner might actually not only improve revenue, but also profit, if he or she decides to focus that location on fruit sales and reduce the amount of vegetables bought and sold. Had the business owner not separated the revenue into two separate categories, he or she would never have been able to see that the vegetable side of the business was holding the company back.

Goals and Next Steps

Tracking revenue not only gives you an idea of how much money your company is bringing in and whether it’s able to bring in enough money to cover the business’ expenses, it can also help shape your company’s goals and help your company make the next steps needed for growth.

Working with a virtual CFO, such as the team at New Direction Capital, allows you not only to increase your company’s revenue but also to find ways to make the most of that revenue so that the business can move forward and continue to grow. Learn more about revenue tracking and achieving business growth by contacting us today.

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