Can Taking on Debt Help Your Business? It Depends When You Use it

There are few words and ideas that strike fear into entrepreneurs and small business owners, especially Millennial entrepreneurs, more than debt. Scarred by the financial crisis, and often juggling student loan and other debt burdens, debt is correctly viewed as something that can upend or even sink a business.

Interest payments by themselves, not to mention principal repayments, can eat up cash flow, prevent entrepreneurs and businesses from expanding, and limit opportunities for future growth.

Although the concept of debt most often has a negative connotation, it is important to recognize that debt is just another tool in the toolbox that entrepreneurs have access to. Obtaining financing is a necessary part of any business, especially for an enterprise seeking to bootstrap itself off the ground.

That said, getting over the apprehension of debt and debt issues, and the legitimate fear or making an incorrect decision with your business finances can be easier said than done.

As a CPA I can attest that there are certainly situations where taking a loan, obtaining a line of credit, or accessing other forms of debt can help you and your business grow. Before anything else, remember that you are in control of your finances — debt is a tool for you to use, and can help your business grow when used correctly.

Let’s take a look at some these specific situations and facts to keep in mind:

1. For developing a new product or service.

No matter how fantastic your newest innovation may be, and regardless what type of business you’re running, you need capital to bootstrap your ideas. While you may have confidence in your ideas, the reality is you may have to produce a proof of concept before investors will believe.

After a thorough analysis of the financial pros and cons, taking on debt to help your launch or finish your new ideas can be an excellent use of this tool.

2. When you want to keep control.

Every business, after cutting through all of the jargon and buzzwords, has two sources of capital available to them. You can raise capital in return for ownership interests in an organization, and this capital is yours to keep for as long as you desire.

Debt, although it has interest associated with it, doesn’t require you to give up ownership of your business. This benefit of raising debt is not often discussed, but is something that should be taken into consideration when you are thinking of obtaining external financing.

3. Taking advantage of the tax code.

This may be more or less relevant for your business, but the fact is that business interest payments are tax deductible, as opposed to payments made to equity investors. Put another way, the benefits of this tax deduction can be summarized as follows.

Assuming you and your competitor operate equivalently profitable businesses, the business that has financed itself with debt with generate higher profitability figures than the business that used equity investors.

4. When it’s cheaper than other sources of funding.

You and I can both read the agreements that are signed when you or your business borrow money — loan duration, interest rates, and any applicable fees are explicitly spelled out. This can reinforce the notion that borrowing money is always more expensive than attracting equity investors.

Drilling in deeper, however, it is apparent that equity investors require control, possibly a share of the profits, and maybe a return on their investment through an eventual sale of the business. Taking a step back to see the big picture can save you money in the long run.

Debt, both for individuals and for small businesses, is a critically important topic that can make the difference between success and failure for your business. Although this topic, and the implications of making a mistake with debt, can strike fear into the heart of entrepreneurs, remember that you are in control of your financial future. Taking a step back, objectively analyzing the situation, and using debt when necessary can help your business grow, expand, and continue providing value to the marketplace.

Tech

6 Rules You Must Know for Using SEO and SEM to Grow Your Business

If you’re managing a business, you know how important a web and mobile presence is. Whether you’re selling tacos, tiaras, or terabytes, customers need to be able to find you.

You’ve probably dipped your toe into the complex world of organic or “free” search, also known as Search Engine Optimization (SEO), and paid search, also known as Search Engine Marketing (SEM). But what do you really need to know about SEO and SEM?

I spoke with SEO/SEM expert Andrew Shelton, founder of the digital marketing agency Martec360, who gave me six rules that you need to pay attention to right now if you want to increase your sales through search:

1. Mobile is king

Need evidence of the importance of mobile? Some 96% of smartphone owners use their device to get things done. About 70% of smartphone owners use their phone to research a product before purchasing it in a store. Half of all web traffic comes from smartphones and tablets.

Furthermore, Google has begun to make its search index “mobile-first.” That means that Google will primarily index mobile content and use that to decide how to rank its results.

2. Paid search pays off on mobile

On mobile, paid search (SEM) is increasingly paying off. Shelton says he used to tell his clients to focus on free search (SEO) but with users putting mobile first, the continuum has changed.

“The greatest return on investment is email,” Shelton says, “because you have those customers in house. But paid search is next.” He estimates that paid search spending went up by factors of 25% to 50% in 2016.

3. Have a solid content strategy

The old adage is the new adage: “Content is king.” You need high-quality content for your website if it’s going to compete in the free search business. You can’t go about that blindly.

Consider what customer problem you’re solving. What customer questions can you be answering?

Do you have a mechanism for customers to ask questions? There could be a wealth of ideas for blog posts, FAQs, and buyers’ guides right there.

4. Social media is worth your return on investment

Social media can be vexing for many businesses. You definitely have to perform a cost-benefit analysis on it. Spending six hours a day sending out tweets that don’t lead to conversions is going to be a losing proposition.

Treat social media as “an engagement with an ongoing conversation with your customers,” Shelton recommends. “It’s not just for selling.”

In fact, if your social media channels are too hard-sell, they’ll be counter productive. You have to create value. Tools like Hootsuite, Falcon.IO, and Curalate can help.

5. Manage your online reputation

According to Shopper Approved, an app that helps its clients collect online ratings and reviews, 88% of all consumers read online reviews to determine whether a local business is a good business.

All of those reviews are part of the SEO equation. They can help you, or they can hurt you. But an app like Shopper Approved can help push more positive reviews where you need them.

6. Measure and monitor your progress

The only way you’re going see your business grow exponentially through SEO, SEM, and social media is to measure what you’re doing. You have to know where you’re starting, set some benchmarks, and monitor your progress.

Install Google Analytics. There is a plethora of other e-commerce tools you can use for analysis. Data is your friend. Get used to swimming in it.

And if you need help, find a consulting firm that understands your customer and your goals.

Just remember, effective search is process. You won’t get it right the first time. But you’ll get better at it with everything you learn.

About the author:

Kim Folsom is the Founder of LIFT Development Enterprises–a not-for-profit, community development organization with a mission to help underserved, underrepresented small-business owners – and Co-Founder and CEO of Founders First Capital Partners, LLC, a small business growth accelerator and revenue based venture fund. Learn more about Kim and her company’s mission to help grow and fund 1000 underserved and underrepresented small businesses by 2026 via their Founders Business Growth Bootcamp program at www.foundersfirstcapitalpartners.com.

 

Tech

China approves HP's $1.1 billion buy of Samsung's printer business with curbs

BEIJING (Reuters) – China said on Thursday it has approved HP Inc’s (HPQ.N) $ 1.1 billion purchase of Samsung Electronics’ (005930.KS) printer business with certain restrictions, citing concerns about the U.S. firm’s dominance of the domestic laser printer market.

HP announced the deal in September 2016, hoping to disrupt the $ 55 billion copier market by focusing on multifunction printers and more deeply embedding mobile and cloud printing technologies to its product solutions.

It hoped at the time to close the transaction within 12 months, pending regulatory review.

In a statement issued late on Thursday, the Ministry of Commerce said sale of A4 format laser printers by HP in China should be done on “fair and reasonable” terms and the firm must report every six months on their prices and related data to the ministry.

HP must not buy any stakes in other A4 printer manufacturers in China even if they are a minority equity investment, it said.

It must not adapt its printers to restrict compatibility with third-parties or claim in advertising that its printers are not compatible with other suppliers, the ministry said.

HP expects to close the acquisition in the fourth quarter which ends on Dec. 31, a spokeswoman said in an email. She declined to comment on the regulatory process.

Samsung was not immediately available for comment.

Under the deal, HP would add an intellectual property portfolio of more than 6,500 printing patents and nearly 1,300 researchers and engineers with expertise in laser printer technology, imaging electronics and printer supplies.

Reporting by Josephine Mason and Stella Qiu; Editing by Muralikumar Anantharaman

Our Standards:The Thomson Reuters Trust Principles.

Tech

Zoho’s latest pitch: Run your entire business for $1 a day per user

Zoho wants to be the operating system for your business. That’s how the company puts it, and what it means is that you can now get just about any application you need to run a business using Zoho One, which gathers all of Zoho’s applications for $ 30 a month per user.

Zoho One, announced and available Tuesday,  includes all 38 Zoho cloud-based applications, plus about a half dozen native apps as well more than 40 mobile apps. It offers centralized administrative control through an Admin Panel, which lets companies manage applications and define administrative groups as well as security and access privileges.

In the cloud era, the price of productivity applications in particular has come down. For example, Google offers G Suite applications for $ 5 per user a month. But Zoho’s applications span the spectrum of sales and marketing, including CRM; operations, including finance, recruiting and HR software; collaboration and productivity, including an office suite, email, and project management; and IT and help desk apps. Zoho also offers Creator, to build custom applications.

To read this article in full or to leave a comment, please click here

Computerworld Cloud Computing

IDG Contributor Network: Future-proof your business with cloud ERP

Today you face a choice. Be a disruptor or be disrupted. Beat or be beaten by the opposition. And while you’re weighing the options, every new digital development is making your margin for error smaller.

What you could have dealt with 10 years ago, before the availability of real-time data and digital channels, is now enough to be fatal. Company size, market share and market cap aren’t the only metrics that matter to a company. Digital value and innovation are increasingly important and with good reason. It’s about being able to create digital value and innovate – and that’s no longer just a nice-to-have.

If you’re like me, and billions of others, you expect customization and personalization. You’re unique. Your needs are unique. Why should your car or your Nikes be just like all the others?

To read this article in full or to leave a comment, please click here

CIO Cloud Computing

IDG Contributor Network: Future-proof your business with cloud ERP

Today you face a choice. Be a disruptor or be disrupted. Beat or be beaten by the opposition. And while you’re weighing the options, every new digital development is making your margin for error smaller.

What you could have dealt with 10 years ago, before the availability of real-time data and digital channels, is now enough to be fatal. Company size, market share and market cap aren’t the only metrics that matter to a company. Digital value and innovation are increasingly important and with good reason. It’s about being able to create digital value and innovate – and that’s no longer just a nice-to-have.

If you’re like me, and billions of others, you expect customization and personalization. You’re unique. Your needs are unique. Why should your car or your Nikes be just like all the others?

To read this article in full or to leave a comment, please click here

CIO Cloud Computing

IDG Contributor Network: Future-proof your business with cloud ERP

Today you face a choice. Be a disruptor or be disrupted. Beat or be beaten by the opposition. And while you’re weighing the options, every new digital development is making your margin for error smaller.

What you could have dealt with 10 years ago, before the availability of real-time data and digital channels, is now enough to be fatal. Company size, market share and market cap aren’t the only metrics that matter to a company. Digital value and innovation are increasingly important and with good reason. It’s about being able to create digital value and innovate – and that’s no longer just a nice-to-have.

If you’re like me, and billions of others, you expect customization and personalization. You’re unique. Your needs are unique. Why should your car or your Nikes be just like all the others?

To read this article in full or to leave a comment, please click here

CIO Cloud Computing

IDG Contributor Network: Future-proof your business with cloud ERP

Today you face a choice. Be a disruptor or be disrupted. Beat or be beaten by the opposition. And while you’re weighing the options, every new digital development is making your margin for error smaller.

What you could have dealt with 10 years ago, before the availability of real-time data and digital channels, is now enough to be fatal. Company size, market share and market cap aren’t the only metrics that matter to a company. Digital value and innovation are increasingly important and with good reason. It’s about being able to create digital value and innovate – and that’s no longer just a nice-to-have.

If you’re like me, and billions of others, you expect customization and personalization. You’re unique. Your needs are unique. Why should your car or your Nikes be just like all the others?

To read this article in full or to leave a comment, please click here

CIO Cloud Computing

‘Pick that cloud, lose our business’: What to do

Here’s a shocker: Wal-Mart is telling some technology companies that if they want Wal-Mart’s business, they can’t use Amazon Web Services. (Wal-Mart says it simply doesn’t want customers storing Wal-Mart’s sensitive info on AWS.) That’s a tall order for technology companies that may have invested millions in their tech running on AWS.

However, if you see it from Wal-Mart’s point of view, Amazon.com’s retail business is costing it billions a year in lost sales, so why not fight back by reducing Amazon’s AWS income from not just Wal-Mart but Wal-Mart’s customers? After all, Amazon.com refuses to sell products from Apple and Google that compete with its own streaming devices and services. 

To read this article in full or to leave a comment, please click here

InfoWorld Cloud Computing

IDG Contributor Network: Making a business case for Alexa

I have been fascinated with the idea of a personal voice assistant since the day Amazon made their Echo devices available. Once in awhile I come back to it, try to write another skill, see what is new. I published a couple of articles on the topic. I struggle to find a good use case for a business application. A lot of it has to do with technical limitations.

On February 23, 2017, Amazon published a blog post celebrating over 10,000 skills. The good news is that this is a three-fold increase since September of 2016. The bad news is that the majority of the skills are solutions in search of problems.

To read this article in full or to leave a comment, please click here

Computerworld Cloud Computing

3 key factors missing from your cloud business case

You want to justify some IT spending for cloud-based platforms. Your CEO or board has asked for a business case, and you’ve been scrambling to create one. Of course, you’ll include obvious items like capex versus opex. However, most business cases miss three important concepts:

1. The value of agility

Yes, again. The problem with agility in a business case is that it’s hard to define, as well as hard to assign a dollar figure. Agility rarely gets into cloud business cases.

But agility should always be considered in a cloud business case, even if in the abstract. If you can scale a server cluster in seconds without driving hardware and software buying cycles, what is that worth to the business? In most cases, I suspect it’s worth a lot.

To read this article in full or to leave a comment, please click here

InfoWorld Cloud Computing

Amazon’s cloud business continues its upward march

Amazon reported another surge in revenue for its cloud business last quarter, though the growth is slowing as the division gets bigger.

Amazon Web Services revenue for the second quarter was $ 2.87 billion, up 58 percent from the same period in 2015, Amazon announced Thursday. Operating profit was $ 863 million, up from $ 391 million a year earlier.

It’s another positive sign for AWS, which is still the leader in public cloud services, even as IBM, Microsoft and Google step up their efforts to complete.

The growth at AWS is slowing, however, which is typical for a company as its business gets bigger. The gain was 64 percent in the first quarter, and 69 percent the quarter before that.

To read this article in full or to leave a comment, please click here

Computerworld Cloud Computing