Running
a business usually requires a significant amount of capital. Capital takes various
forms, from economic capital to human and labour capital.

The
term ‘financial capital’ is usually associated with money. Financial capital is
often represented by cash, assets and securities.

Cash
in the bank can make all the difference to the future of any venture, enabling it
to grow and expand. In its absence, companies are often left behind.

Companies
use two different forms of capital funding: equity and debt. Effective
corporate finance strategies determine the most cost-effective mix.

Equity
Capital

Equity
capital is generated by selling shares in company stock. Shares fall into two
distinct categories: common and preferred.

Individuals
who own common shares have voting rights, though in terms of ownership, they are
at the bottom of the ladder. If the company liquidates, other shareholders and
creditors are paid first.

Preferred
shareholders are guaranteed payment of a specified dividend, taking precedence
over payments on common shares. In exchange for financial security, preferred
shareholders have limited ownership rights and forego voting rights.

The
primary benefit of equity capital is that companies are not obliged to repay
shareholder investments. Instead, shareholders receive a return on their investment
according to the company’s performance. These returns take the form of stock
valuations and dividend payments.

Equity
capital does have some disadvantages. Firstly, ownership of the company becomes
diluted, since each shareholder effectively owns a small stake in the company.
Business owners are beholden to shareholders. They have a responsibility to
ensure the company maintains profitability, elevates stock value, and maximises
dividend payments.

Debt
Capital

Debt capital is also known as debt refinancing. For
a company to utilise debt capital, it will usually borrow money from an
investor, agreeing to repay it at a later date. Common forms of debt capital
used by companies are bonds and loans. Companies use these forms of borrowing
to finance new projects or expand the company.

Credit cards are a form of debt capital that are
often used by smaller businesses or early start-ups.

Companies seeking to raise funding through debt may apply
to a bank for a loan. Here the company is the debtor and the bank is the lender.
The company compensates the bank for providing funding by paying interest on
top of the original amount borrowed.

Another form of debt capital is corporate bonds.
They are sold to investors and mature after a set date. Up until the maturity
date, the company has a responsibility to issue investors with regular interest
payments. Because bonds attract a comparatively high element of risk, with
increased chances of default, they tend to pay a higher yield.

Debt capital has several disadvantages. While it is
an effective method of raising capital, it attracts a significant expense in
the form of interest. Interest payments must be made to lenders irrespective of
company performance. In a poor economy or low season, debt payments may exceed
the revenue of a highly leveraged company.

Important Considerations in Raising
Capital

Entrepreneurs need funding to establish and grow
their business. At some point, all businesses need to raise capital. In days
gone by, this usually came in the form of a bank loan, or perhaps investment
from a wealthy family member. However, in today’s internet age, corporate
funding takes a wide variety of different forms, from crowdfunding and venture
capital to microfinance.

Business owners need to be clear about what company
rights they are prepared to surrender, and which they are determined to keep.
The good news is, with such a wide variety of different funding options to
choose from, finding the right investment option for a new venture is easier
than ever before.Kevin Neal serves as Distribution Director for Bluefin
Capital (Luxembourg), overseeing wealth management and distribution across the
company’s Luxembourg, Dubai, and Far East operations. As a former Independent
Financial Advisor, Mr Neal has extensive experience of various
aspects of the money markets, including corporate finance. Mr Neal is a large
shareholder in La Sala Group (Spain), an organisation that specialises in hospitality
and entertainment.

Hot desking is a hot trend in
business today. Yet few understand what it involves much less why it is
becoming popular beyond the fact that it has become routine at Silicon Valley
companies. Let’s learn what hot desking is before listing the advantages and
disadvantages. We’ll also share a few observations about how to make hot
desking work for your team.

An Introduction to Hot Desking

Hot desking means people choose the desk they want on a daily basis instead of
having an assigned desk or cubicle. Because different people may use the same
desk over the course of a week or even the same day, this is why hot desking is
sometimes called desk sharing. Hot desking started around the same time as the
open office plan, but hot desking may or may not occur in an open office.

The Advantages of Hot Desking

Hot desking has a number of advantages. It may reduce the number of desks you
need to have available, if you have a number of people who work at home or
travel periodically. Desk sharing dramatically reduces overhead costs if you
have people on different shifts sharing desks instead of having their own,
dedicated workstations.

For creative types, the ability to
choose where they work and who they sit with can be a plus. For example, they
might be able to take a workstation with advanced computers for a design
project one day and a basic day the next. And they may appreciate the autonomy,
too.

Hot desking may result in more
organic interactions with a variety of people, since your team members aren’t
always sitting next to the same people. However, not everyone wants to have to
worry about where they’re going to
sit or set everything up at the start of the day. And hot desking isn’t
practical in all cases. You may want your IT staff sitting near the server
room, not a couch in the break room.

Hot desking often results in
cleaner workspaces. Since staff cannot leave personal items in the cubicle,
they aren’t able to pile it up with junk. This also makes it easier for
custodial staff to clean it at the end of each day.

The Disadvantages of Hot Desking

Your permanent office staff may not like hot desking, since it interferes in
their productivity. They shouldn’t have to find and fight for workspace. You
also risk breaking up teams, since people aren’t always able to sit together.
Give those assigned to an office a permanent desk, especially if they have a
lot of tools and equipment in their office. Set aside hot-desks for
freelancers, contractors, road-warriors and work-at-home staff that only come
into the office once in a while.

Observations about Hot Desking

Not every person or job function is highly mobile. Recognize when your company can and should have dedicated offices for personnel. Serviced office providers like Halkin can provide a mixture of dedicated offices and workspaces perfect for hotdesking professionals.

If someone’s job means they can
work anywhere, anytime, consider letting them work from home more often.
However, you may want to talk to staff comfortable with hot desking about IT
security concerns. For example, your business is at greater risk of malware
infection and hacking if they’re routinely accessing the corporate network from
coffee shops or personal computers.

You may need to implement a
workspace booking solution to maximize the use of in-demand workstations,
whether they have the best views or most advanced computers.

Hot desking can be combined with
managed office space rentals. For example, you might work from home the vast
majority of the time but pay to use an office when meeting with clients.

To be a
successful business owner, you need a good idea, a market with a demand, and
know how to execute. You also need to have a set of basic skills if you want to
be able to succeed. This is especially true if you have a few employees working
with you.

However, many business owners have a vague idea of what it means to run a business, and find out that they’re limited much later on, especially when it comes to technology. But with the right set of practical skills, you’ll not only be able to run a tighter ship, but also have a much more hands on approach without having to constantly depend on outside workers. Here are some essential tech skills all small business owners should have.

Basic Computer Literacy

The very
first thing that you will need is basic computer literacy. You might be old
fashioned, but without this, you’ll be lost. No matter what field you’re in,
you will need to have at least a basic understanding of how computers work.

Not only
will you be able to protect your business better, but you’ll also be able to
use the power of the internet to advertise your business more efficiently, and
for less money. You won’t need to spend thousands of dollars working with a
digital marketing agency or IT consultants. Not to mention that you’ll have
little understanding of what they’re doing if you don’t have a formation and
could get taken advantage of.

This is
why you should consider at least completing an ECDL course before you get
started. If you’re already running a business, know that you can get your ECDL course online through services like findcourses.co.uk.
They will connect you with a variety of training providers close to you. If you
prefer to take the class in a traditional setting, they can also help you find
those too.

The ECDL
will give you a formation in things such as spreadsheets, word processing and
online marketing among other things. These are all skills that will allow you
to run a better business, and could give you a serious return on investment
when considering the help you won’t have to hire.

Basic HTML Skills

This is another very important tech skill that all business owners should master. HTML is the language used to build websites, but it has various other applications too. While it can be intimidating at first glance, HTML becomes much simpler once you learn the basics (or learn how to use WYSIWYG Editor like TinyMCE).

When you know
HTML, you’ll be able to modify aspects of your website, like images,
navigation, and design. You could also learn how to build your website
yourself. It’s easy to start with a CMS like WordPress, for instance, and learn
how to modify themes yourself. Knowing this skill alone could save you
thousands of dollars on a website. And if you decide to have your website built
by a professional, you’ll be able to do some maintenance and troubleshooting
without having to keep them on a retainer.

Google Analytics

If you’re
going to learn HTML and build websites, you also have to be able to monitor
their performance and activity. This is why it’s essential that you understand
Google Analytics and always work on improving your material.

Google
Analytics is very straightforward and allows you to monitor things such as the
number of unique visits, enter and exit pages, and how long visitors are
staying on your website. But one of the most valuable things you’ll learn is
something called the bounce rate.

The
bounce rate is the percentage of visitors that come in and come out of your
website without visiting any other pages. Bounce rates could give you a clear
idea that there’s something wrong with your website. But furthermore, sites
with high bounce rates are viewed unfavourably by search engines, which will
hurt your visibility on them.

Search Engine Optimisation

Speaking
of search engines, search engine optimisation, or SEO for short, is one of the
most valuable skills that you could learn. SEO is the science of increasing
your visibility on search engines. But it’s also about knowing how to avoid
mistakes that could end up hurting your website.

SEO is
not about “tricking” search engines. It’s more about how to apply best
practices in order to organically move up the search results for specific
terms. SEO can be a great way to build tons of organic traffic, and when you
know SEO, you don’t have to constantly pump money into it. And even if you
don’t intend to do your SEO campaigns yourself, it will allow you to better
understand what SEO agencies are doing when you hire them.

Email Marketing

Email marketing is one of the most efficient
and powerful marketing tools that you can use. It’s laser targeted,
cost-effective, scalable, and quantifiable. You could use it to build a loyalty
program and inform clients about special deals. You can also use it to gain a
following online, and inform people about product launches. And, if you have
basic skills, email marketing is pretty simple. This is one of the best skills
that you can have if you don’t want to overspend on advertising and want to get
the most bang for your buck.

Social Media

Social
media is another tool you’ll need to master if you want to be able to build
your brand. It plays a central role in a lot of people’s lives, and is much
more powerful than traditional media in many cases.

When you
understand how social media works, you’ll be able to build a connection between
your brand and large audience. You can also learn how to use viral marketing
techniques and how to use hashtags. Social media is one of the most cost
effective marketing methods that you can find so it’s well worth investing in.

Payment Processing

This is
one of the most important things that you can learn if you want to not only be
able to process online payments, but offline payments as well. There are tons
of apps that allow you to accept mobile payments nowadays without the need for
an expensive merchant account.

Understanding
how payment processing works is also important if you’re trying to add things
like a shopping cart to your website. But more importantly, understanding it
will also allow you to guard yourself against attacks, and make sure that your
clients’ payment information remains secure at all times.

IT Security

This is
another crucial skill that all business owners should have. You can always hire
a consultant, or use a managed solution, but without a basic knowledge of how
IT security works, you’ll always be vulnerable.

With an
in depth knowledge of IT, you’ll be able to identify attacks quickly, find
leaks in your organisation, and be able to implement the right solutions to
prevent malicious attacks from inside or out. Not only that, but you’ll be able
to set up a clear IT security policy in your organisation, and make sure that
everyone follows through.

Conclusion

These are
only some of the tech skills that will help you as a business owner. However,
these could make a big difference on how dependent you’ll be on subcontractors,
and will allow you to have a clearer understanding of the tech aspects of your
business.