Managing finance is one of the crucial factors for survival in business. A strong financial structure is required to stay credible and be profitable. Scarcity of funds or mismanagement of finance remains one of the major contributors to business failure and can have your dream come to an end. Here are 6 tips to help you manage your company’s finances. (more…)
Businesses fail due to diverse reasons. However, scarcity of funds remains as one of the major contributors to business failure. In today’s highly competitive world, businesses perish when they fail to grow. With growth being primarily fueled by continuous investments, a dearth of adequate funding may actually hinder growth, which, in turn, may shorten the lifeline of your business. The inflow of external finance can promote a drastic growth of your business only if you know how to capitalize on it. Additionally, you should have certain key things in place in order to be able to attract the right type of finance.
What do you need finance for?
Why do you need finance to grow? You may need finance to grow in a number of different ways:
- Expand into new markets
- Acquire human capital and get the right talent in place
- Develop new products or services
- Expand the reach through marketing.
So finance is required to support major functions, and it can really help accelerate the growth of a good company.
Getting Funded through Private Equity
So how can we attract finance especially by means of private equity? When you opt to raise funds through private equity, a group of financiers lends you money and, in return, they take a shareholding in your company, so they’re invested in that particular way. According to the latest weekly DNA Money update, PE-backed companies outperform various companies that are listed on the SENSEX. Additionally, it shows that the revenue growth of PE-backed companies over a five-year period is 40% as opposed to just 18% for the NIFTY Midcap or just 15% for non-PE-backed listed companies.
Interestingly, the asset growth is also 46% higher compared to just 16% with non-PE-backed listed companies, and 18% for SENSEX-listed companies.
We will reveal 4 key steps, which will improve your readiness to acquire PE finance:
Everyone loves good stories. Telling stories is a critical, but often overlooked, a skill every business owner should have.
Telling stories is a key income producing activity
Stories will help communicate your vision. If you want to grow your business much faster if you want to lead winning teams if you want to leave a lasting impression upon your customers and prospects. If you want to get finance for your business, then you will need to master this particular skill. Even if you want to improve your relationships, whether it be personal relationships or professional relationships, then you need to learn this particular skill. (more…)
Another year has ended and the businesses are all geared up for 2018. Thinking about the future can help entrepreneurs come up with better planning, strategies and stay in the competition. There are certain key trends that are swirling and will be significant in shaping the business models next year. (more…)
For many starting a new business not only a means of making a living but also a dream, do all succeed at this? It can be both scary and exciting. Very few of them are able to turn their dream into reality and able to see it grow. I must admit that when I first started my business it was a disaster, however over a period of time I was able to master the business growth strategy and I built a multi-million dollar business across India. Last year I started a new business in a new field. Here are 4 steps to consider before starting a new business.
Let’s think about the few of the overlooked challenges before running your own business: (more…)
Does your business have some strong risk management policies and frameworks in place? Doing business is a risky affair and you can’t avoid risk. So it’s really important to have a risk mitigation framework in place. There are certain key parameters that you need to focus on while trying to deploy an appropriate risk mitigation framework. In this article, we discuss particular aspects that you cannot possibly ignore as this may otherwise derail your growth. In fact, all the things that you’re working so hard for can be derailed.
Strong Governance Forms The Foundation Of An Effective Risk Management Strategy
Start off by setting up a strong corporate governance mechanism. If you’re going to get external lending and funding, then it’s important to have strong governance in place. Here, you’ve got to look at not only statutory compliance but you should also make sure that everything is done and reported in a transparent way. (more…)
Technological changes have always reshaped business models. However, what is strikingly different now is the pace at which technology is changing and in turn disrupting all areas of doing business. But, are business models keeping pace with technological changes?
Technology Drives Business Growth In Competitive Markets
Companies that utilize technology to power their business model see a 3x higher growth rate than companies that don’t. Companies that use data for decision making compared to companies that do not have 20% higher employee productivity.
An EY report indicates that, since 2000, digital disruption has affected around 52% of Fortune 500 companies and businesses are failing to use ~80% of their customer data. Notably, by 2018, the top 20 firms in most sectors are most likely to face disruptions that may be caused by sector-specific data platforms.
The survey reveals that although most entrepreneurs acknowledge the impact of technological changes on their business, they either are not ready or have not made it a priority to take necessary steps to transform their business model to stay relevant. First generation entrepreneurs who have prior corporate experience are more open to adopting technology than the older generation entrepreneurs.
Technology Is Changing Business Models
Companies like Uber and Airbnb are disrupting industries with their business models. What are some of the things that you can do? Re-look at your business model. What are the key trends in your industry? What are the key disruptions? How can you leverage new technologies? There’s cloud computing, there’s mobile computing, there are the apps. Can you utilize any of these technologies to actually help you scale up your business that much better? Here are 4 specific strategies to help you use technology to grow your business:
An often neglected but very important area that impacts the growth of emerging businesses is risk management. Risk management remains a non-priority until disaster strikes or a big opportunity is missed. Sustainability of a business depends heavily on how well possible risks are managed.
Entrepreneurs who have realized the importance of enterprise-wide risk management have set up a strong corporate governance (CG) structure and used technology heavily to mitigate risks. As a result, they have been able to increase their readiness to manage risks and improved their credibility in the eyes of investors/lenders. 50% of companies that have set up a strong corporate governance structure have managed to attract external investors vis-à-vis ~10% of the companies that have not.
Technology can help mitigate risks
All the companies that are confident of their readiness to mitigate risks have heavily invested in technology to manage risks and focus more on teamwork according to a recent EY report.
In this video we look at:
1. How to set up a strong corporate governance framework.
2. How to identify risks to your business.
3. How technology can mitigate risk
What business risk are you going to address?
Like, Share & Comment below
#Risk #Manangement #Technology #BusinessGrowth
Here are the links to all the 7 Business Growth Drivers:
Business Growth Driver #6: Risk Management
As businesses grow, funding needs evolve. Funding a business through the various stages of growth is a complex process as it involves choosing the most appropriate source or a combination of sources (equity, debt, friends, and family, angel, PE, VC etc.).
Benefits of Investors
Involving external investors helps businesses in many ways:
- It brings in domain knowledge and technical expertise
- Opens up networking opportunities
- Provides strategic direction to boost growth
- Improves financial decision-making
- Instills professionalism
- Helps build credibility and reputation.
Companies require a well-structured leadership team to handle the corporate finance function. Strong financial controls and governance is the key. Further, companies that have external investors have seen significantly higher growth. They are better equipped to take more efficient financial decisions.
According to a recent DNA Money article, Private Equity (PE) backed companies have a 40% higher revenue growth over a five year period vis-a-vis listed companies without PE funding.
Like, comment below & share. What do you require funding for?
The 7 Growth Drivers to Scale Up Your Business
Here are links to the various Business Growth Drivers:
- Be customer centric.
- Develop a 2nd line of leadership that is independent & accountable. This is one of the biggest challenges faced by small business owners. Learn the 7 steps to successful delegation here.
- Use a total rewards mechanism to engage & retain talent.
- Segregate core & non-core business activities.
- Finance – This video
- Risk management.
- Technology – use it to strategically drive growth.
Are you ready to grow your business even faster? Then you need to have these seven pillars of business growth in place.
In this particular blog, I’m going to give you an overview of the seven pillars and then in subsequent blogs, I’m going to go into each pillar in more detail and give you some very practical tips that you can deploy right away in your business to start scaling up.
Having worked with over 10,000 small business owners across 21+ cities in India, I noticed that there were some very specific things that the most successful of them did to get consistent business growth. I have identified 7 specific business growth pillars.
We have put together the Ultimate Cheat Sheet For Massive Business Growth (download) – Read below to get it.
So let’s look at the 7 pillars of business growth: (more…)