Welcome back to business basics! In case you’ve forgotten, every week we take a look at a basic business concept in order to try to help new business owners better understand it. This week, we are covering Return on Investment, or ROI – a fairly straightforward, but often misunderstood, part of running a business! Though you may think you know all about ROI, you could be using it incorrectly. But first…
What is ROI?
Return on Investment, or ROI, is pretty easy to grasp – heck, the definition is right in the name. It’s whatever return you get after your invest in some part of your business. So if you hire 2 new salespeople, a basic measurement of ROI will be the money they bring in, minus their wages. Continue reading
Not everybody is attracted by prospect of jobs with fat pay packages, especially if they have a desire to live life on own terms. There are numerous examples of people starting small sized ventures at home which blossomed into large companies in long run. PC giant HP’s founders started operating from a garage in Palo Alto and it grew into one of the world’s leading IT giants. If you have an entrepreneur’s spirit and teamwork and customer service skills, starting up your own business may be the best option.
However, you may want to try venturing into lesser known niche areas to make a mark for yourself and the company. Rather than joining an industry laden with cutthroat competition, changing taste of consumers and other hiccups, you may tread into uncharted territories and tap the potential.
People assume they will have to pump money into their start-up business, but what they don’t always know is that to continue to keep their business strong and thriving, they also need to continue investing in their growth and internal development. The question, then, becomes how to afford keeping their growing business from becoming stagnant. Here are a few strategies and financial options for managing business expansion without sinking the ship.
First, you must decide what it is that you are looking to invest in. Do you want to update a software system? Open a new business location? Remodel your existing one? Add a product line, or develop a new product? Expand your marketing outreach? Decide where your focus lies, and then you can strategize how much you’ll need to invest. You may not be able to tackle all of your goals at once, but choosing one or two specific paths will help you to be intentional when it comes to your money and other resources.
Image credit courtesy of Athens Chen, designer at DigitalThirdCoast.net
Attracting and retaining key employees is essential to the success of an organization. When employees are working for organizations that give back, their sense of pride, trust and commitment strengthens. When employees feel valued and appreciated their dedication is enhanced with a wonderful influx of motivation which contributes to the vitality of the organization.
Here are 6 ways that businesses can invest in good employees.
1. Helping employees earn graduate degrees and MBAs
Olivet Nazarene University in Chicago offers a program where they will come to your office to fulfill certain program requirements onsite. “Our model is to offer our programs in a variety of settings that essentially take Olivet to the student. We partner with over 20 hospitals and numerous school districts to offer our nursing and education programs onsite at those locations. In addition to our offices in Bourbonnais, Oak Brook, and Rolling Meadows, we have classes running over 100 different locations in Chicagoland and throughout Illinois.”
Drop shipping is one of the many strategies that you can use to fulfill orders for an online store. It is a relatively simple strategy, but it has some real benefits to it. One of the biggest benefits is that you don’t have to keep nearly as much material in inventory which is extremely helpful as many online storefronts are run by one or two people out of their home. Their garage or a shed probably serves as their inventory space. This means that they may not have enough room to hold many items in stock, but drop shipping can eliminate that hindrance and make keeping inventory stocked much easier as well as provide the additional benefits to the home-based business.
Get to Market Fast
As Practical Ecommerce points out, having a drop shipping arrangement is a great way to make certain that you can get products to market faster. This is because you don’t have to wait for the items to come in and, even more importantly, you don’t have to gamble on how many of those items you need to hold in stock to keep customers satisfied. You simply send the order to the manufacturer or a different warehouse and they’ll send the article out for you, with no risk involved.
For any business owner, sustainability and growth are always top of mind. You want to invest in growth while realizing a positive return. As you contemplate your long-term goals, here are the top three investments to consider:
1. Technology infrastructure – It’s important to operate off a scalable technology platform – one that enhances employee performance. Because technology impacts every sector of your business, it’s important that it provides a simple and flexible experience for your team members so that they can maximize efficiency.
Keeping up with cutting edge trends that you can implement first in your industry is a great way for your company to stay ahead of the curve and stand out. Don’t be afraid to take risks!
Venture capital is a bit misunderstood due to the press venture investments often receive. It seems like every week or so the news is covering some start-up that raised an inordinate amount of venture capital for an idea that sounds, at best, a bit shaky.
But that tenuous relationship between a business idea and its application is what turns an investment into an injection of venture capital. Venture capital is, in a nutshell, the money that is invested into an early-stage, high-risk company that is believed to have the potential to yield huge returns, if it succeeds.
Having a great business idea is just the first step. Getting funding for your new company is the more challenging task that follows up. Often, individuals are discouraged from making their dream a reality because of the limited funding opportunities that are available.
It is possible to find investment for a business idea, even if the economy is slow. Presentation of your idea and having a highly professional business plan will show potential investors that you are serious and that you have what it takes to succeed. The following tips will help you present yourself well and capture the interest of potential investors.
Don’t let your marketing dollars get stuck in the vending machine.
It happens to everyone. It’s like a rite of passage. You go to the vending machine to get your chocolate fix and buy a bag of Raisinets. You put your money in the machine but your candy gets stuck on its way out.
You’re bummed out. You weren’t expecting this to happen. You’re faced with the decision of putting more money in the machine to get what you want – or calling some number to complain, (do they ever answer?) knowing you will never get your money back.
Doesn’t it stink when you spend money and you don’t get what you pay for? Or you have to pony up more money when you thought you wouldn’t have to? Especially if it’s for your business!
First off, when you spend money in your business, think of it as an investment. Don’t just think of it as an expense. That way you will be in the mindset of getting a return on your money, which is really what you are paying for. Continue reading
Like most small business owners, you are undoubtedly familiar with the nagging desire to be everywhere all at once where your business is concerned. Even if you are secure with the trust you have in the crackerjack team you employ, there is nothing quite like increasing that sense of safety with a security system in place.
Historically, traditional security systems have required investments that can often be a deal breaker for a small business owner, and as a result, the business is forced to go without. Hiring and paying for a monthly service to set up their cameras and monitor suspicious activity is simply beyond the reach of many small companies. Continue reading