Category: Business Tips and Ideas

The Financial Mistakes for Startups You Should Never Make

Mistakes are common, even in business. However, it doesn’t mean they cannot be avoided. All business owners have faced all those critical moments when it comes managing their startup money to ensure that their new business will last. Here are the financial mistakes for startups the entrepreneurs should avoid to manage your initial funds.

  1. Diminishing the Value of Human Capital

Being a founder, you are not only the CEO of your startup company. Rather, you are also the salesperson, the receptionist, the secretary, the janitor… and the list keeps going on. Well, do you know that taking on all those tasks of managing a company is also one of the big financial mistakes for startups?

Human capital is the reason. Rather than trying to do everything, respect human capital and give it the most power. Consider delegation as a form of investment instead of an expense—an investment to enable you to spend more of your time into the core pursuit of your business. Understand human capital by trying quantifying the financial value of your own time.

  1. Being “All-In”

Many entrepreneurs tend to focus on growth with the long-range mindset in their head. Even so, apparently this thinking can be the worst financial mistake for your company. As you start making money from your startup business, it’s easy to wish to invest all the money back. But this won’t be worth it if you cannot write a check and protect your business’ cash flow.

Just a little reserve sometimes can go a long way, providing you more peace of mind. Build a short-term cash reserve separated from the money you spare for company operation. Reinvest in the operation, for sure, but be sure to save a little too.

  1. Ignoring the Importance of a Financial Mentor

Though it’s widely known, apparently not all new entrepreneurs have a mentor to talk about the challenges of running a startup company and to help them make decisions.

A mentor in organizing the money is also important to serve as an advisor. Don’t fall into the trap, thinking that you’ll have to have money to work with one. In fact, financial firms work with clients of various stages, even the startup one. Alternatively, a colleague, accountant friend or family friend will do as well.

Business Tips: All You Need to Know before Starting a Business

Starting a business is not a piece of cake. There are many things that you need to consider, let’s mention the target market, opportunity, decision making, risks and many others. However, business is able to give certain joy and pleasure for the holders. Whether it is big or small business, all have their own problems and solving solutions that should be figured out. To make your business survive for longer time, there are some things that you need to know. If you are a novice and wants to start a new business, it is recommended to know these business tips.

First of all, it always starts from money. Many business runners should stop their business just because they do not have enough cash on their savings. To avoid this problem, you need to make sure you have good cash flow. Once you have liquidity problem, fix it before it stops your dream. The other problem may come from bad employee. Since you need their help to run a business, it will not work well if your employees cannot walk or run together with you. Once you find out that your employees are the problems, you better find the other ones.

Being decisive is important in running a business. You have to know when to say “yes” and when to say “no”. Agreeing something that you should not may bring a great effect to your business. Besides, being decisive also helps you to stay focus on the business goal. The most important thing of all, always listen to your customers. They are the reason your business is still running. Without customers, your business will stop. Therefore, listen to your customers and use their feedbacks to improve things that need to be improved. However, sort what is important and what is not. By knowing these tips, it will be easier to start a business.

Benefits of Telecommuting to Employees and Employers

Technological changes have made it possible for employees to work from remote locations, instead of making the daily trips to and from the office. This arrangement is known as telecommuting. An employee who telecommutes typically operates from the office about two days a week, and works from home or any other remote location (like the client’s premises) for the remainder of the week. Telecommuting has been touted as one of the few radical changes in management strategy that has brought immense benefits to both the employer and employee as it creates a win-win situation in the workplace. There are five major benefits of telecommuting that employers and workers alike stand to enjoy:

Improved Employee Retention and Attraction

The flexibility offered by telecommuting makes it a very attractive arrangement for employees. About 90% of employees who have had a stint in a position that offered telecommuting opportunities always sought for similar opportunities whenever they found themselves looking for employment elsewhere. Once they land such an opportunity, these workers tend to be more content and are unlikely to exit the organization. The employers have come to appreciate this, and many of them are issuing advertisements in the media for positions with telecommuting option. A look at some of the recent ads featured in the Boston Globe, the Los Angeles Times, the San Jose Mercury News and the Philadelphian Dispatch clearly show that employers are ready to retain employees, even if such employees opt to work from home. Companies have come to realize that they do not have to lose star employees as a result of the employee’s relocation for personal reasons – they can still retain them as telecommuters.

HR experts know that it is quite expensive to train new workers. The HR expert would want to save on this cost by retaining the workers who are already well trained. It benefits the company to offer telecommuting opportunities to employees who desire them, rather than lose the worker altogether.

Telecommuting has been hailed as one of the best mechanisms for engaging and retaining employees with disabilities. Some disabled persons are unable to commute daily, to and from work, and the telecommuting arrangement provide them with the perfect solution.

Improved Productivity

A case study conducted at the University of Alabama, department of Business studies highlighted that employees and supervisors who telecommute are up to 45% more productive than their counterparts who work from the office. This is attributed to the fact that there is a myriad of interruptions that take place at the office, leading to repeated restarts of any given task. From the seemingly normal visit to the water cooler, to the repeated little stops for chats; the cumulative effect is less work done by the end of the day. Social interactions, though important for the employee’s overall wellbeing, often sap up the time meant for tasks if such interactions are left untethered. On the other hand, telecommuters report more consistency and concentration in the way they carry their tasks from home. The employees tend to be healthier and have better levels of physical and emotional fitness. They are therefore more content and, as a result, make their employers more satisfied with their work.

Uninterrupted Program Continuity.

When it comes to deliverables and deadlines, telecommuting has a way of ensuring that interruptions don not wreak havoc on the company’s programs. There are those external interruptions that are unplanned for but have a way of directly impacting on how the company’s programs are run. These interruptions might result from the weather (heavy snow that impedes travel), sports events (marathon, Olympics, etc.) and even sickness (of self, children or spouse). Such interruptions may interfere with the firm’s output – and this might even lead to loss of clients. However, with the telecommuting arrangement, there is no aspect of any company project that needs to stop. The employee can still proceed as scheduled and comfortably meet all the set deadlines.

Telecommuting is Eco-friendly

With the world opinion leaders pushing for the reduction in the emission of gases that cause global warming, a practice that is part of protecting our environment is a welcome idea. One of the main reasons why telecommuting is readily embraced by many organizations is due to the fact it helps in the reduction of pollution. There is ample evidence to show that reduced travel to and from work, the use of less electricity and office equipment actually leads to a safer, more waste-free environment. Telecommuting is a great way for any company to reduce on the use of pollutants by its employees.

Reduction in Overheads

The research paper on the same case study at the university of Alabama further highlighted that companies stand to save up to 35% on overheads by adopting the telecommuting practice. Employees who work from home do not need a lot of space and equipment at the office. If the company has a good number of telecommuters, it means that the space required will not be much; and as a result, the company will save on rent. Arrangements can be made for office space and furniture to be shared amongst different telecommuters, since none of them will need the facilities on a daily basis. The telecommuter does not even require having a desk fitted with a permanent phone and other facilities, since most of their time is spent out of the office. Indeed, the cost of commuter allowances, fuel allowances and travel allowances will come dramatically down.

From the above key benefits, it is evident that telecommuting is an idea that should be embraced by organizations that would want to enhance productivity as well as improve employee flexibility and sense of freedom. Telecommuting is a good organizational strategy that is guaranteed to improve effectiveness and efficiency.

Most Profitable Business for Small Business Holders

Today, business field is just getting bigger and bigger. When more people see the wide opportunity offered by running a business, it means you should compete so hard to survive. Do you know? There are some profitable businesses that offer you big chance to gain success. These small businesses are considered as profitable today. Ranging from accounting services, real estate services and doctor’s office, those businesses have wide-opened door waiting for you to come. To get closer, here are some recommended businesses to offer you big profit.

Let’s begin with accounting and tax service. This business places the highest rank of most profitable business, especially if you plan to start your career. This small business gets 18.4 percent net profit margin. Compared to the other small business, this number is really promising. Following this business, real-estate services places the lower rank. This kind of business gets 15.2 percent of net profit margin. Even though it is not as high as accounting service, real estate is a good business to start. Considering more and more demand of property, it opens a big opportunity for you to spread your wings of business. Not to mention the other business that you can build right after you have this real estate service.

Following real estate business, there is law firm with 14.5 percent net profit margin. This number is considered as profitable compared to doctor office which only gets 13 percent. Those data are obtained by observing more than 16 thousands small business with less than $10 million earnings. Actually, there is a similarity based on the data above. It is all about service industries. It cannot be denied that service industry is the most profitable business, especially for those who start. This is due to the lower startup cost, even it can be started from your own house.