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Ways To Raise Money Without A VC

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In every business, there is one element that can make or break your startup during the early days – money. Most businesses follow the same pattern. They have a good idea and then pitch their ideas to a venture capitalist to find an angel investor. This is a good path but it is not always the best one. Businesses have to give up shares in equity to raise capital. When you get outside funding, the third party will sometimes act like they own the business, which is normal because they do. As the business continues to grow, it will need more money, which can lead to dilution, so the business owns less of their company each time. Entrepreneurs who want to avoid venture capitalists have very few options. Here are some good sources of outside funding.

Friends and Family

One of the most popular advice entrepreneurs receive is not to go into business with family or friends. This does not mean to say that you can’t borrow money from them. Nobody will love your ideas more than your friends and family. There is also less song and dance involved when you’re pitching your ideas to them. Aside from borrowing money, you can also get a lot of emotional support from them as you nurture your startup. Money and relationships can be a toxic mix though, especially if there is a lot of money involved. It usually leads to unwanted advice, demands for updates or miscommunication. The good news is, it does not always lead to this. Friends and family is a good place to start if you’re looking for outside funding.

Small Business Administration (SBA) Loans

Small Business Administration (SBA) is a government entity that provides assistance to small businesses such as loans and grants. In 2014, the SBA approved a total of 53,000 loans totaling $20 billion. The SBA has regional offices and is a good way to get funding without resulting to VC and diluting shares. Aside from this, they have a mentoring program called SCORE (Service Corps of Retired Executives) a good resource for startup companies. The SBA has specific requirements that businessmen need to meet and have a higher interest rate compared to other lending programs. However, they are a great option for funding.

Bootstrapping

The best way to make your business grow is to bootstrap existing capital and revenue. IP targeting startup El Toro started with “seed” money from family and friends. They supplemented their company growth by their cash flow. As the company continues to grow, it produces more cash which you can reinvest for additional equipment, people or other assets. This method won’t work for all businesses because you can only grow as fast as your revenue. The key to bootstrapping is the door that it can potentially open once you reach a certain size. When your company has reached a certain number (revenue), banks and other traditional lending institutions will become more open to lending you money.

Grants

Government and private sector grants are often overlooked as outside sources of funding. Grants are advantageous because they do not require businesses to give up equity or to return the money. It sounds too good to be true because it is. The process of getting a grant can be hellish.

For government grants, you need to find one first. It can exist in a branch of government or an offshoot of one. Once you find a grant, you need to know if funds are available. After this, you need to complete a long and complicated application process. Getting a government grant is a long process and usually scares off entrepreneurs who don’t want to wait or put in the work.

Private grants are easier to find but are also hard to get. Large corporations usually give out grants to give back to the community or receive benefits for their own.

Finding outside funding without VC can be challenging but it can be done. These ideas are unorthodox but can hopefully find you money to start your business.

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Getting Recognition Builds Productivity

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Getting recognition is one of the top motivators and drivers among employees in the workplace. According to studies, 78% of employees work harder if they are better recognized. More recognition for a job well done translates to better productivity and happy employees. This sounds very simple, but is actually a bit more complicated to implement. This is because employees today don’t want just compensation as a form of getting recognition. They also want a close-knit office culture, volunteer opportunities, praises, rewards and genuine recognition for their efforts. Here’s how to do it:

Reward the Right Things

Rewarding employees for every achievement is counterproductive. Instead of singing their praises for everything they do well, reward the right things such as:

  • Actions that align with the company’s strategies and goals. Recognize behavior that aligns with the company’s overall mission. If you don’t have a mission statement, now is the time to define it.
  • Big wins and small wins should also be celebrated. Big projects usually have higher risks and setbacks. To keep your team from being frustrated, celebrate the small ones as well.
  • Being a team player is essential to the survival of your organization. As such this behavior is important because employees who work well together do not let their egos into the organization. Employees like this know how to put the team in front of their own personal interests.

Understand Why It Matters

According to a study by BambooHR, 82% of employees feel that they do not get recognition for their work and are considering leaving the company. Recognition seems like a small thing and not understanding why it is needed could hurt an organization’s profitability. Think about it, a few simple words of encouragement or gratitude can save your company thousands of dollars in recruitment and training new talent. Recognition helps revenue. When an employee gets the recognition they deserve they are happy and happy employees are more productive. Companies who recognize their employees have 2.5 times more revenue compared to companies that do not reward their employees. This means that high engagement translates to a third higher profitability.

Culture of Recognition

Create a culture of recognition within your organization. For example, you can ring a bell and call everybody’s attention whenever somebody does a good job. This way everybody knows whenever the bell is rung that something amazing has happened. This action also recognizes the achievement of an employee. Soon your office will associate bell rings for getting recognition and will aspire to have the bell rung in their honor.

Tailor Fit Your Recognition

Teams within organizations can have their own culture. For example, this team loves bowling or comic books. Aside from the usual phrases and accolades typically bestowed on them, go a bit further by tailoring recognition for their internal culture like going on a celebratory bowling game after a job well done or treating them to a couple of comic books. These small actions do not only show recognition but it shows that you respect the individuality of your members as a team.

Link Recognition with Performance

The key is to promote good behavior through recognition. In the long run, the goal is to achieve better attitude and improved performance. Therefore managers should know how to tie recognition, company objectives and individual performance. Connecting behavior with specific behavior helps to drive better performance. For example, your goal as a company is to implement zero accidents in the workplace. Be sure to reward employees for avoiding accidents or coming up with a new system to improve safety. To truly drive behavior and reinforce performance, recognition from superiors should be more than just a few nice words. Superiors, management, team leaders and even the CEO should connect saying thank you (gratitude) with behavior (the purpose). Influencing behavior can boost performance and productivity while boosting morale.

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How To Connect With Employees As A CEO

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Thirty years ago, a CEO’s focus was on customers and profit. Nowadays we know that CEOs have a bigger impact. A good CEO knows that a company is more than just their customers and profits. A good connection with employees is also important to keep productivity and motivation up. CEOs need to connect with employees on a regular basis not only to inspire but also to know what is going on at the company’s most basic level. Here are ways a CEO can connect with his employees.

Social Media

Many CEOs use social media to reach out to their clients and customers in an effort to humanize their company. Why not use the same social media to connect with employees too? Sending a congratulatory tweet to a team or following an employee on Facebook can be very flattering to employees.

To some of them, the boss is on the top floor only accessible to a select few VIPs. Being called to the CEOs office is very rare except maybe if they did something wrong. Social media brings everybody closer together because they are used by all kinds of people. Connect with employees on social media to make yourself more reachable, friendly and more human.

Take Mark Zuckerberg for example. Facebook’s CEO is very accessible to all people on his social media. He shares pictures of his kids and daily activities of their family life. This makes Mr. Zuckerberg seem more relatable, not only to employees but to many people as well.

Family Day

Family day is not only a great way for families to get together on company time (and expense), it is also a good time for the boss to connect with employees. Being called by your boss by your first name can be very gratifying for employees because the CEO remembers you. This simple act of remembering first names can be very inspiring and motivating to employees.

Employees also like to see their boss in casual clothing. To them it makes them look friendly and approachable. You can be surprised how many more employees approach their CEOs when they are seen wearing casual clothing. The friendly setting of family day is also a good way for CEOs and their employees to bond and get to know each other outside the workplace.

One-on-One

Having a one-on-one with the CEO can be very intimidating. What does he want with you anyway?

This is not necessarily true. A good way to get to know employees and make them feel important is to schedule a short one on one. It does not necessarily have to be about work. It can be about getting to know each other or catching up. This has to do with people wanting to feel that they are important. A CEO’s day is full of meeting with important people and spending time with ordinary employees will make them feel special. It is an easy motivational tool that does not cost anything but time

Open Door Policy

An open door policy makes CEOs more accessible to ordinary employees. They understand that a CEO’s time is important but an open door policy also makes them feel welcome. This is one of the reasons why many CEOs prefer to have meetings in a conference room rather than their private offices. This is to ensure that ordinary employees can walk in and talk to them if needed.

The door does not have to be literally open. Just make sure they understand that they can drop in anytime or arrange for an appointment to talk with you.

Share Meetings With Employees

Employees like to know what’s going on in the company. It makes them feel involved and valuable. One of the best ways to make them feel that their contribution is important is to record your meetings and share it with them. Sharing is a good idea because it’s a communication vehicle, it shows employees how decisions are made and it encourages precise thinking, communication that reduces politicking.

Leadership style differs from one CEO to the next. CEOs wear different hats all the time. The key is to remember that employees are the lifeblood of a company and finding ways to keep them motivated is one of the duties of a good CEO.

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Useless Phrases You Need to Stop Using in Your Emails

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According to the Pew Research Center, 61% of Americans think that email is important to doing their jobs. Despite this fact, many of us are not good at it. Mastering the art of getting to the point is crucial especially if you consider that 66% of emails were opened on a smartphone or tablet. With this in mind, keep these useless phrases off your emails.

Please be advised

Many people use this because it sounds professional but it is also unnecessary. Be concise. The recipient already knows it’s important.

Please do not hesitate to contact me

This is one of many useless phrases that communicates the obvious. Email is a form of communication and it is expected that you will reply if it is important.

I Think

Senders usually include an ‘I think” to soften a blow. However, this phrase tells the recipient that you’re not sure of yourself. Whenever you’re communicating in emails or real life, you need to be confident. You also risk that the recipient disregarding your opinion of you use this phrase.

Enclosed/Attached please find

Nothing can actually be enclosed or attached in an email. This phrase is used when the sender wants to avoid using “I”. It seems minor, but it’s better to use “I attached…” to make your email more direct.

I hope you are well

This phrase is usually used on 3 occasions: when you want to hit the recipient with something unpleasant and when you want to feign closeness.  If you are genuinely concerned about the person, ask them directly and avoid using this filler line.

To Whom It May Concern

There are only a few situations when this phrase is appropriate. If you know the recipient, address them directly. If you don’t, avoid using this unnecessarily formal phrase. The phrase also makes you sound unconfident.

Sincerely Yours

In the days of snail mail, this phrase was the norm. However, in the digital age, it seems stiff and very formal. Instead of using this phrase, use “Cheers” or “Thank you” or just sign you name.

Sorry to bother you

Opening an email with an apology undermines our credibility. Instead of apologizing, get straight to the point. Tell them why you’re contacting them instead of hiding behind apologies.

To be honest with you

This is tricky. It is commonly used when you want to soften a blow or when you want to be candid about something. However, it also tells the recipient that you might not be honest before.

You should

“You should” implies that you make their decisions for them. Avoid using this phrase unless they’re asking you for advice.

No problem

When people use “no problem”, there is actually a problem and you’re softening them up. Instead of useless phrases like “no problem”, use “you’re welcome” or “sure thing” to avoid miscommunication.

I’ll try

We all live in a world ruled by calendars and deadlines and “I’ll try” sounds wishy washy. This phrase does not instill confidence in your abilities. It can also make you seem disengaged or not fully committed to your project.

As I mentioned before

It seems like your explaining the same thing over and over again. Instead of making it seem like your repeating yourself, try to be considerate. Get to the point even if it seems like you’re repeating yourself.

Let me know if there’s anything else I can do for you

This phrase is totally unnecessary because it opens a whole can of things totally unrelated to your purpose. Instead of beating around the bush, let the recipient know what it is you can do for them.

I completely understand how you feel

Before you type this phrase to your email, stop and think if you’ve been in their shoes before. These types of useless phrases can sound thoughtful and well-intentioned but it can also come off as condescending and distanced. Emails are the currency in the business world. While proper courtesy is important, rambling and improper phrases can hurt your credibility. Eliminating these phrases from your email ensures that your email is well-received.

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