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Building the right team for your business

While hiring the right staff is a key element when running a business, to be successful you will need to build a strong team. Here are some tips on turning a group of individuals into a cohesive, collaborative team that will help your business to reach its full potential.

Have a vision:
When starting a new business, defining what your motivations are can help you to visualise the type of organisation you want to create. This can help your staff to know what you are aiming for and understand the goals of the business. Don’t just focus on your products or services, outline the principles and characteristics you wish to build in your organisation. For example, some of your core goals may be to have outstanding customer service or to create a supportive workplace. Once you have outlined your vision, you can use it as a guideline for both you and your employees.

Involve your staff:
By getting your employees involved in the day-to-day operations of your organisation, it will allow them to use their strengths to integrate and develop into the business. Challenge your staff by giving them timelines or specific goals to strive for. If they have achieved these, acknowledge their success. This will motivate them to work hard if they know they are being recognised for their efforts. Consider team-building exercises or activities outside of work as a way to foster a friendly and positive environment. When your employees are happy and enjoy coming to work, this will reflect in your business.

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Debt financing vs equity financing

Posted on July 9, 2020 by admin

Gathering funding is a challenge that almost all business owners face at some point. Financing can come in two forms – debt financing and equity financing.

Debt financing is money that you borrow and plan to pay back within an agreed time frame and interest rate. Common forms of debt financing include bank loans, mortgages and credit cards. This may appeal to business owners that wish to maintain complete control and ownership over their business, without having to manage the expectations of investors. Debt financing also means that business owners do not have to share any profits made by the business, as their only obligation to their lender is making payments on time. As well as this, debt financing methods are usually tax-deductible, unlike private loans.

However, debt financing also has its downsides as the cost of capital is higher. Loans from official lenders such as banks typically come with interest rates that also need to be paid in addition to regular repayments. This means that your business must generate enough income to meet the requirements of the debt, which can affect cash flow and could even result in bankruptcy if the business fails and is not able to repay the debt. As well as this, new businesses may struggle to secure a bank loan, as banks often have a strict protocol regarding who can receive a loan.

Equity financing, on the other hand, is when you invest your own money or someone else’s money (usually family and friends, venture capitalists, business angels, or public floats) in your business. As a result of this, the investor of your business partially owns your business and shares the profits you make. This method of financing may be more suitable for business owners who can accept sharing their profits and not having complete ownership and control over their business.

One advantage of equity financing is having freedom of debt as repayments do not have to be made on investments. As well as this, equity financing methods can potentially expose business owners to additional funding opportunities if investors decide to provide more support for the business as it develops. However, business owners considering equity funding should also keep in mind that these methods can often put a strain on personal relationships if the financing was sourced from family and friends, depending on if the business succeeds or fails.

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