When a small company identifies a need for new business technologies, many differing opinions will be brought forward based on the potential impact the technology will have on a given individual’s day-to-day responsibilities. The bottom line is that new technology affects the entire business, and the key to a successful transition is to keep every employee that stands to be impacted in the loop. An even better approach: give them a voice during the transition.
Businesses should strive to achieve sustainable change. Sustainable change is achieved through the synchronization of people, processes and technology required to achieve a lasting competitive advantage over time. More than just a hunt for increased profits, sustainable change is about profiting consistently and using a superior business model to protect that profit over time.
The next decade will likely offer many business owners the opportunity to branch out and make money through different channels. But when a business ventures outside of its normal area of expertise, it needs to employ channel management to stay organized and optimized for success.
The promise of royalties provides a way to draw investors into funding license-based businesses. The risk is no greater than if they were buying stock, but the reward comes with extra benefits and returns that can be reaped much faster than with a traditional investment.
Like all gambles with large potential payoffs, venture debt and equity come with equally big risks. But when used correctly by experienced companies, venture debt and equity can act as rocket fuel that enables businesses to achieve many of their goals in much shorter timeframes.
When a small manufacturer gets a major, million-dollar order, but they don’t have the cash on hand to make the goods because their outstanding invoices won’t be paid for 60 days, where do they turn for quick cash? When an inexperienced restaurant owner hires an under-qualified family member to handle the business’s accounting, and that family member makes a payroll tax error that will cost the business its liquor license unless they pay in full within 30 days, how do they come up with money in a pinch?
Wouldn’t doing business be so much easier if CEOs could see into the future? Unfortunately the closest a business owner or leader will ever come to having a crystal ball is establishing a strong, fact-based financial model. Not only do these models provide CEO’s with the best possible view into their financial future, they are also imperative when attempting to secure additional capital. No banker, loan officer or investor will sit down and have a meaningful discussion with a business owner who doesn’t have a financial plan.
A financial model is a set of assumptions about future business conditions that drive projections of a company’s revenue, earnings, cash flows and balance sheet accounts. In practice, we use financial model in a spreadsheet form (usually in Microsoft’s Excel software) to forecast a company’s future financial performance.
This year’s Black Friday underscored the importance of an online presence for retailers in all industries. This includes car sales (eBay Motors), fine jewelry (Blue Nile), transportation (Uber) and lodging (Airbnb) in today’s environment. While store-based sales were reportedly down by over 11% from last year, Cyber Monday sales were the largest in history. But how can a small business capitalize on expanding into other channels when they are already working 70 hours a week on their brick and mortar business?
Are you familiar with the term “pre-bankable”? Many business fall into this category, meaning that either they haven’t been in business long enough to qualify for traditional bank financing, or they can’t qualify because of bank underwriting requirements. It’s no secret that banks have not been a source for small business lending for some time now, and unfortunately, change isn’t just around the corner for many deserving businesses.