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

Microsoft’s new tools help devs manage cloud deployments on the go

Microsoft is making it easier for developers to manage their cloud deployments on the go, using a new mobile app and browser-based command line.

On Wednesday, the company unveiled Azure Cloud Shell, which lets developers spin up a full-fledged terminal environment inside Microsoft’s cloud and comes with a set of preconfigured tools for managing deployments. Each user will have persistent file storage in their Cloud Shell, hosted in Microsoft Azure.

Cloud Shells are accessible through the Microsoft Azure web portal, as well as the Azure mobile app for iOS and Android, which was just released Wednesday. That app also provides users with the ability to monitor the workloads they have running in Microsoft’s public cloud and perform basic management like stopping and restarting virtual machines.

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CIO Cloud Computing

LinkedIn will help people in India train for semi-skilled jobs

Microsoft has launched Project Sangam, a cloud service integrated with LinkedIn that will help train and generate employment for middle and low-skilled workers.

The professional network that was acquired by Microsoft in December has been generally associated with educated urban professionals but the company is now planning to extend its reach to semi-skilled people in India.

Having connected white-collared professionals around the world with the right job opportunities and training through LinkedIn Learning, the platform is now developing a new set of products that extends this service to low- and semi-skilled workers, said Microsoft CEO Satya Nadella at an event on digital transformation in Mumbai on Wednesday.

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Network World Cloud Computing

ZoneSavvy taps big data to help SMBs find best sites for businesses

Location, location, location: As the old joke goes, those are the three keys to business success. Now, with big data analysis, corporations can be smarter than ever before about where to open up new offices or businesses.

But what if you run a mom-and-pop shop, or you’re dreaming of quitting your corporate job and opening a boutique? Even medium-size businesses do not have the money to spend on the sort of systems and analysis teams that corporate behemoths use to locate new businesses.

This is where ZoneSavvy, a new website created by software engineer Mike Wertheim, could help. The site is straightforward: You enter a business type, the ZIP code of the general area where you want to locate the business, and the distance from that ZIP code you are willing to consider. ZoneSavvy then gives you suggestions for which nearby neighborhoods would be the best locations for your business.

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Computerworld Cloud Computing

ZoneSavvy taps big data to help SMBs find best sites for businesses

Location, location, location: As the old joke goes, those are the three keys to business success. Now, with big data analysis, corporations can be smarter than ever before about where to open up new offices or businesses.

But what if you run a mom-and-pop shop, or you’re dreaming of quitting your corporate job and opening a boutique? Even medium-size businesses do not have the money to spend on the sort of systems and analysis teams that corporate behemoths use to locate new businesses.

This is where ZoneSavvy, a new website created by software engineer Mike Wertheim, could help. The site is straightforward: You enter a business type, the ZIP code of the general area where you want to locate the business, and the distance from that ZIP code you are willing to consider. ZoneSavvy then gives you suggestions for which nearby neighborhoods would be the best locations for your business.

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Network World Cloud Computing

Microsoft is working on tools to help people use cloud-based FPGAs

Earlier this year, Microsoft made a splash at its Ignite conference for IT professionals when it announced that it has been racking cards of programmable chips together with servers in its cloud data centers.

The chips, called field-programmable gate arrays (FPGAs), can be reconfigured after being deployed to optimize them for particular applications such as networking and machine learning.

Now, Microsoft is investing in tools that would allow customers to program the FPGAs, said Scott Guthrie, the executive vice president in charge of Microsoft’s cloud and enterprise division, during a talk at the Structure conference in San Francisco.

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InfoWorld Cloud Computing

Do you trust your cloud provider? Addressing these questions will help put you at ease

Although vendor-written, this contributed piece does not promote a product or service and has been edited and approved by Network World editors.

Finding a cloud provider you can trust has become a major responsibility.  Cloud providers come in all shapes and sizes—from global organizations delivering a range of services to small shops specializing in a limited number of capabilities. To normalize the differences you need to ask consistent questions about key issues.

Security should be at or near the very top of your list, with their answers providing the transparency which will help build trust.  An essential first step is to avoid making assumptions on what security is and isn’t with respect to a provider. Every provider is different, with different rules, service-level agreements (SLAs), and terms and conditions. Make sure you thoroughly understand what each service provider commits to you, the customer.

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Network World Cloud Computing

OneDrive’s smarter photo features help it catch up with Facebook and Google

Microsoft is upping its game for organizing your personal photos. The company recently announced some significant changes to OneDrive’s photo features that borrows a little from Facebook and Google, as well as a slightly improved Photos app in Windows 10.

Automatic Albums

When you upload photos to OneDrive, the cloud service will now detect which photos were taken in a short span of time within a particular location. It will then choose the “highest quality” photos from that set and create an album.

Previously, OneDrive would only organize your photos based on the date they were taken.

On this day…

onthisday

For a while now, Facebook has shown you memories that happened on the same day from previous years such as a popular photo or text post. Now, OneDrive is doing something similar by showing you photos taken on a specific day from previous years, as well as the current one.

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CIO Cloud Computing

Open-source really could help get you a job, study finds

Experience in the open-source world is a valuable asset for technology job-seekers, and it’s getting more so over time, according to the latest Open-Source Jobs Report, which was published today by Dice and the Linux Foundation.

The report, which surveyed tech hiring managers, found that nearly two-thirds were planning to increase open-source hiring more than other areas of their business in the near future, and that 59 percent had definite plans to add open-source workers.

The news was also good for open-source workers who are already employed. Four out of five hiring managers who responded to the survey said that they had increased incentives to retain open-source employees — 44 percent had hiked salaries to this end, while 43 percent had offered more flexible working conditions like telecommuting.

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InfoWorld Cloud Computing

Alphabet plans analytics platform to help cities solve traffic problems

Sidewalks Labs, a unit of Alphabet, is teaming up with the U.S. Department of Transportation to build a data and analytics platform that promises to help cities understand where people go and how they get there.

The goal is to help better design transportation infrastructure to suit a city’s needs.

The platform, called Flow, will rely on one of Alphabet’s core strengths: collecting, analyzing and visualizing vast amounts of data.

The system will help cities identify congestion and areas that are underserved by public transportation, enabling planners to come up with a better citywide plan that uses current and new forms of transportation, like ridesharing, Sidewalk says. That’s getting more important as commute times and distances grow longer.

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Network World Cloud Computing

Oracle asked to help low-income residents evicted for its new cloud campus

Earlier this week Oracle announced that it’s planning to build a brand-new cloud-computing campus in Austin, Texas, but since then a darker backstory has come to light.

Roughly 100 low-income families were hastily evicted this summer from an apartment complex on the land in order to make it available for the sale to Oracle, according to reports, and they’re now seeking restitution.

Though some of the former tenants of Lakeview Apartments had leases through the end of the year, they were reportedly forced by owner Cypress Real Estate Advisors to move out early. Some have said their security deposits were not returned, and they have had no assistance as they’ve struggled to find comparably priced housing.

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CIO Cloud Computing

Oracle asked to help low-income residents evicted for its new cloud campus

Earlier this week Oracle announced that it’s planning to build a brand-new cloud-computing campus in Austin, Texas, but since then a darker backstory has come to light.

Roughly 100 low-income families were hastily evicted this summer from an apartment complex on the land in order to make it available for the sale to Oracle, according to reports, and they’re now seeking restitution.

Though some of the former tenants of Lakeview Apartments had leases through the end of the year, they were reportedly forced by owner Cypress Real Estate Advisors to move out early. Some have said their security deposits were not returned, and they have had no assistance as they’ve struggled to find comparably priced housing.

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

Network World Cloud Computing

Oracle asked to help low-income residents evicted for its new cloud campus

Earlier this week Oracle announced that it’s planning to build a brand-new cloud-computing campus in Austin, Texas, but since then a darker backstory has come to light.

Roughly 100 low-income families were hastily evicted this summer from an apartment complex on the land in order to make it available for the sale to Oracle, according to reports, and they’re now seeking restitution.

Though some of the former tenants of Lakeview Apartments had leases through the end of the year, they were reportedly forced by owner Cypress Real Estate Advisors to move out early. Some have said their security deposits were not returned, and they have had no assistance as they’ve struggled to find comparably priced housing.

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

InfoWorld Cloud Computing

How VMware’s Diane Greene will help Google capitalize on a massive cloud opportunity

VMware co-founder Diane Greene, recently appointed as the head of Google’s cloud business, adds operating responsibility to her role on Alphabet’s board of directors. Greene’s new title will be SVP of Enterprise Businesses, reporting to Google CEO Sundar Pichai, who also announced in a blog post last night that Google would acquire bebop, a cloud computing software development company founded by Greene, for an undisclosed amount.

One reason for restructuring Google into Alphabet was to recruit top managers to run the company’s many different businesses. Likewise, Google under Pichai has a broad span of businesses and technologies, impossible for any single person to lead. Greene’s appointment and new cloud organization seem to be intended to bring focus to growing the cloud business under a proven leader, in the same way that Alphabet CEO Larry Page intended when he reorganized the company.

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Network World Cloud Computing