How Business Carries the Economy

How Business Carries the Economy

From Industrial Revolution to the Technology Revolution:

Prior to the Industrial Revolution from 1760 through 1840, the picture of business was largely based on small proprietorship’s comprised of skilled craftsmen and farmers. As equipment inventions grew, the ability to mass produce goods and services increased.

It is easy to see the effect on the economy. With an abundance of goods, supply and demand produced a steady, relatively stable economy. However, global trade had yet to reach today’s epic proportions, which would bring with it a host of additional issues and affect economies of trade partners.

The more handicrafts and agricultural economies changed, the domination of large scale manufacturing evolved to today’s high tech revolution changing the face of businesses, domestic and global trade and the economy.

How Businesses Carry the Economy:

The basics of how businesses carry the economy depends on several factors. These include:
. Cost
. Efficiency
. Scarcity
. Supply and demand
. Elasticity
. Utility
. Competition
. Monopoly
. Oligopoly

The Importance of Small Business vs. Big Business:

Where once big business conglomerates dominated the U.S. landscape, the effect of venture capitalism on a grand scale has affected the economy.

The structure of the economy relies on innovation and invention to drive business progress to economic stability. Venture capital works hand in hand with investments in businesses. This presupposes investors understand risks with regard to venture capital investments.

Today, small businesses carry the economy by consistently regenerating invention and innovation. In addition, small businesses are the lifeblood of the economy because they provide jobs.

Big business often outsources or contracts offshore for employees which impacts the economy negatively. While the end result of this is profitable for big business, the overall economy lacks sufficient jobs to provide purchase power to consumers.

When consumers are jobless, they become thrifty and spend less. The ripple effect of this is a reduction in the need for products and services and local and reduction in federal tax revenues that drive economic stability.

These factors are solid reasons to support and promote small business. Another factor is the survival rate of small business as compared to big business. According to the Small Business Administration, small businesses survive five years or more, unlike big business.

Cost, Efficiency, Supply and Demand:

Small business startups survive longer mainly because the cost and investments are less prohibitive than those of big business. A smaller business can also be more efficient due to its size factor. This shows how these businesses carry the economy forward.

Many small businesses are based on goods and services consumers need or use most. These include:
. Beauty salons
. Coffee shops
. Jewelry stores
. Repair shops
. Dry cleaners and laundromats
. Diners and restaurants

Many small businesses branch out to become franchises. Note that franchises tend toward inexperienced business owners. The basic business operations in franchises may not be as efficient or cost-effective due to owner inexperience. Still, there are a sufficient number of franchises that do succeed and become profitable enough to carry the economy.

The Business Engine that Drives the Economy:

Since investments in business are the engines that drive the economy, this is proof that a successful business landscape bears the burden of impact on the economic stability.

Yorkville Advisors, LLC is a privately owned and operated hedge fund sponsor that was founded in 2001.

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Different Types of Business Loans to Apply for

Different Types of Business Loans to Apply for

Owning and managing a business is a dream for many people. For small business owners, a lot of very important decisions need to be made on a regular basis. One important decision to make is whether or not they should apply for business loans. Business loans can help a small business a number of different ways. These loans can help a business to manage cash flow, buy equipment, and even purchase real estate. There are several types of business loans that you should consider applying for and taking out.

Working Capital Line of Credit:

One of the most important types of loans that you will need to have when you are a small business owner is a working capital line of credit. Businesses of all sizes will need to have access to working capital at some point. Even if you are very successful and profitable, you will have working capital needs as your customers often will not provide payment for a period of time after you perform your service or sell your product. This period of time, which can range of to 90 days, could result in a serious cash flow crunch. When you have a line of credit, you will be able to borrower against your outstanding A/R.

Inventory Loan:

Another type of loan that will be helpful for business of all sizes is an inventory loan. If you produce a product you will likely need to buy a lot of inventory before it can be produced. In many cases this will require you to spend cash up front before months before you collect on the sales of the final product. An inventory loan can provide you with financing you need to purchase inventory. This is ideal for new businesses, those that are growing, or businesses that are in a seasonal industry.

Capital Asset Loan:

If you need to own your own capital equipment to operate your business, taking out a loan could be a good idea. Machines, technology, software, and other equipment can help to grow and manage your business, but are also very expensive to invest in. For many people, a much better option would be to take out a loan to finance these assets. You can often receive a low interest loan with a favorable repayment term to finance these assets.

Real Estate Loan:

If your business operates out of a warehouse, retail space, or other type of real estate, it may be a good idea to purchase the underlying real estate. This will provide your business with the ability to build long-term equity and can be more affordable than renting. Purchasing a commercial building is very similar to purchase residential real estate. While you will have to put forth a down payment to purchase the building, you will also be able to get a great interest rate and an amortization schedule of 25 years or more.

 

Yorkville Advisors, LLC is a privately owned and operated hedge fund sponsor.

Is PPC or SEO Better For Your Business?

Is PPC or SEO Better For Your Business?

If you’re trying to improve your business’s visibility and to turn potential leads into customers, you’ve got two primary options these days: Pay-Per-Click marketing or Search Engine Optimization. There are similarities between these methods, but they vary wildly in terms of cost and immediate efficacy.

PPC vs. SEO: The Facts You Need to Know:

First, let’s take a quick look at the basics of PPC and SEO marketing strategies.

Pay-Per Click Marketing:

The pay-per-click model of online marketing is based around a simple concept: advertisers pay a small fee each time a potential customer clicks on one of their ads. You probably see many of these ads each day–they feature a small box in the right-hand corner displaying the word “ad.”

This obviously sounds like an optimal model to draw visitors to your site, but it can quickly become expensive, especially if you’re not converting these leads into sales. There are also many companies that prefer to generate their leads in a more organic fashion.

Despite Google’s relatively new advertising format, which displays ads in conjunction with less expensive (even free) organic results, people have gotten wise. They are much more likely to click on the regular search engine results, which is where SEO comes in.

Search Engine Optimization:

Search Engine Optimization (SEO) is the name for a group of strategies used to increase your business’s rank in Google results (as well as other search engines). Let’s say you operate a pizza place in New York; one of the most common SEO techniques is to research keywords to use on your website that will place you optimally within the results for, say, “best pizzeria in Brooklyn” or “inexpensive Brooklyn pizza”.

While PPC can yield results fairly quickly, SEO is more of a long-term strategy to build (and maintain) a web presence. It takes time and experimentation to find the right keywords to highlight your business, as well as to build a database of high-quality content that will keep customers browsing, leading them ultimately to a purchase.

Important Points to Remember:

Depending on your business strategy, Pay-Per-Click Marketing might be advantageous. This is especially true if you’re trying to generate leads quickly. PPC, while effective, is best used by companies who have larger marketing budgets. It behooves any company to have a great website that encourages maximum lead conversion–after all, you’re paying to get people there!

If your budget is more modest, SEO is a better long-term strategy. As a matter of fact, SEO is a good idea even if you’re engaging in PPC marketing. Keep in mind that SEO is a slower-moving process.

In the end, the best strategy is to find the mix of PPC (for lead generation) and SEO (to improve your website and search results) that works for you. It’s a matter of budget, time preference, and how urgently you need to drive leads and potential customers to your site.

Yorkville Advisors, LLC is a privately owned and operated hedge fund sponsor.

How to Choose the Perfect Business Partner

How to Choose the Perfect Business Partner

The right business partner is instrumental to a successful business venture. Where would Google be today if Larry Page didn’t meet Sergey Brin? What would Apple be if not for the partnership between Steve Jobs and Steve Wozniak? Yet while some partnerships click instantly, not all entrepreneurs are lucky enough to find the perfect business partner from day one. Below are four tips to help you find and vet your potential co-founder candidates.

Figure out What Type You’re Looking For:

Are you looking for someone who can throw facts and figures or someone who can come up with new creative angles and ideas? Do you need someone to help you figure out the bigger picture? Perhaps someone who can handle the business side while you focus on the technical aspects of your product or service? Knowing what type of business partner to look for beforehand makes it easier and more straightforward to filter through potential candidates. Business partners come in all packages, with some being skillful talkers who can negotiate their way into advantageous positions while others are more of a visionary who can come up with revolutionary and out-of-the-box ideas.

Tap Into Your Circle of Coworkers:

One of your past or present coworkers could be the business partner you’re looking for. Not only is this convenient, but tapping into your circle of coworkers can also give you a tremendous advantage compared to choosing a co-founder you only met yesterday. You already know or at least have a basic idea of how a past or present coworker operates. You know if they are hardworking or lazy, if they are honest or dishonest, and if they have the drive and passion or not. Send prospective co-founders a text or email or meet up with them to discuss your business idea. Only confide with people who you completely trust otherwise they might steal your idea for themselves.

Consider Partnering With a Family Member:

You always hear cautionary tales of business owners and entrepreneurs who partnered with a family member and failed. Nonetheless, there are many advantages to partnering with a close family member, one of which is that it helps you precisely identify value alignment. Sharing values is arguably one of the most essential factors that drive entrepreneurs to achieve incredible feats, take great risks, and make difficult sacrifices. That being said, working with a family member is a delicate process. While you are connected by blood, make it clear from the beginning that it’s all business.

Try it out:

You can try out your newfound partnership for a few weeks or months and see how it goes. An even more short-term solution is to start a small side project with your prospective co-founder. It takes only a few discussions with him/her to get a strong sense of whether or not the partnership has a foundation and future.

Final Thoughts:

Choosing the perfect business partner takes time and some trial and error in many cases. Nonetheless, it is a major decision that will have a tremendous impact towards your business’ long-term success.

 

Yorkville Advisors, LLC is a privately owned and operated hedge fund sponsor that was founded in 2001.

10 Books That Aspiring Entrepreneurs Should Make Time to Read

10 Books That Aspiring Entrepreneurs Should Make Time to Read

If you are an aspiring entrepreneur, you’ll need guidance as you start your career. You’ll need to learn about the ins and outs of becoming an entrepreneur. Many aspiring entrepreneurs seek to attend different classes and sessions in order to learn more information about entrepreneurship. However, an affordable alternative is simply reading a few books. Regardless of what career you are pursuing, there are books available to assist you. Here is a look at several books that you should consider reading before starting your career.

The Founder’s Dilemmas (Noam Wasserman):

University of Southern California professor Noam Wasserman takes an in depth look at some common reasons why entrepreneurs succeed and fail. Wasserman explains how complex entrepreneurship can be. By the end of the Founder’s Dilemmas, Wasserman explains when it is time for entrepreneurs to seek help from others.

The Art Of The Start (Guy Kawasaki):

Entrepreneur Guy Kawasaki explains to his readers the power of the internet. Kawasaki informs entrepreneurs about different topics such as marketing, crowdfunding, and cloud computing. Kawasaki advises entrepreneurs to avoid thinking of entrepreneurship as a job.

Jab, Jab, Jab, Right Hook (Gary Vaynerchuk):

New York Times best selling author Gary Vaynerchuk advises entrepreneurs to figure out what appeals to their customers and find a way to meet that need. Vaynerchuk explains the importance of social media. Vaynerchuk believes that entrepreneurs have to be willing to combine their message and platform.

Simple Numbers, Straight Talk (Greg Crabtree):

Crabtree uses real world examples and step by step instructions to answer important questions concerning human resources, taxes, and other important issues. Crabtree advises entrepreneurs to always look at the big picture.

Will It Fly (Thomas K. McKnight):

Thomas McKnight lays out different questions that aspiring entrepreneurs must ask themselves in order to determine if their business will be successful. By the end of the assessment, you should have a clear idea on some of the responsibilities that go into running a business.

Become Your Own Boss (Melinda F. Emerson):

The Chief Executive Officer of Quintessence Multimedia, Melinda F. Emerson explains how you can launch a successful business within a year. Emerson gives readers advice on how to raise capital and how to develop a great marketing strategy.

The Lean Startup (Eric Ries):

Ries lists some innovative ways to help aspiring entrepreneurs run their businesses with maximum efficiency. Ries relies on The Lean Startup Methodology.

Entrepreneurial You (Dorie Clark):

Marketing expert Dorie Clark gives readers advice on how to create a successful business plan. Clark advises entrepreneurs to dream big.

Setting The Table (Danny Meyer):

Restaurateur Danny Meyer explains important lessons about hospitality, and how entrepreneurs can use hospitality to improve their management skills. Meyer emphasizes the importance of customer service.

The One Page Business Plan (Jim Horan):

Horan lists some exercises to help entrepreneurs refine their business approach by simplifying their business plans to only one page. Horan believes that writing out a smaller business plan allows entrepreneurs to avoid making things more complex than they should be.

 

Yorkville Advisors, LLC is a privately owned hedge fund sponsor.

5 Planning Tips When Selling a Business

5 Planning Tips When Selling a Business

While some create businesses that are meant to stay in the family for generations, others start business ventures with the plan to sell eventually. If you’re of the mindset that selling your business is the best outcome, take a look at some of these planning tips you should put in place before you sell.

Create A Business Someone Will Want to Buy:

Profitable businesses, turnkey enterprises, companies with proprietary products–these are all companies that will look more attractive to potential buyers. Think of ways that you can make your business the kind of company people want to buy and build up to that vision so when you’re ready to sell, your company looks attractive to buyers in the market.

Have a Plan For the Sale Proceeds:

Selling a business can set you up with a large windfall, and if you don’t already have a plan for those proceeds, they could quickly be spent wastefully. Consider whether you want to use the proceeds to support yourself while you build another business, to invest in another company, to set aside in savings, and so on.

Remember Taxes:

It’s unlikely that you’ll be able to walk away with the sale proceeds free and clear. Talk to a tax advisor about the potential tax implications of the sale and make sure you incorporate tax payments into the plan for the proceeds.

Maintain Liability Insurance:

No matter what kind of business you run, you are exposed to potential liabilities. If you are sued–even if the complainant doesn’t win–you can drain your business defending yourself in court. And if the complainant does win, you may have to close your business as a result of the judgment. To avoid these possibilities and make sure you have an operating business to sell later, invest in liability insurance.

Keep Control Over Your Personal Spending:

Selling your business because you want to, not because you need the money, is a good place to be. It takes the urgency away and allows you to wait for the best offer. It also means that you can do more with the sale proceeds since you won’t be using it for urgent needs but instead will have the luxury of using the money where it will have the most impact. All of this can be accomplished by keeping your personal spending under control. When you effectively manage your lifestyle expenses, your debt, and your savings, you keep yourself on secure financial footing and allow yourself more restraint and patience when selling your business.

Selling a business takes quite a bit of foresight and planning. But it’s a move that can change your life and help assure your future.

 

Yorkville Advisors, LLC is a privately owned hedge fund sponsor.

5 Tips to Prevent Hackers from Stealing Your Business’s Data

5 Tips to Prevent Hackers from Stealing Your Business's Data

Are you doing enough to prevent hackers from stealing your business’s data? According to study conducted by¬†Kaspersky, 46 percent of businesses have lost sensitive data from a cyber threat. Unfortunately, many of these businesses don’t recover from major data breaches, and those that do suffer from a negative public image. There are ways to prevent hackers from stealing your business’s data, though, including the five tips listed here.

#1) Identify Vulnerabilities:

You should first identify cyber vulnerabilities in your business’s information technology (IT) infrastructure. These are the weaknesses that leave your business vulnerable to cyber attacks. Examples of cyber vulnerabilities include outdated software, weak passwords and the lack of a cyber security policy.

#2) Train Employees:

Training employees on the signs of cyber vulnerabilities and how to mitigate the risk of a data breach is another important tip to protect your data from theft. Phishing breaches, for instance, often stem from an employee unknowingly downloading a malicious file attached to an email. Once the employee downloads the file, the malware is deployed on his or her computer, after which it spreads to other computers across the network. To protect your business from this and other types of cyber attacks, train employees on the warning signs of cyber vulnerabilities and how to deal with them.

#3) Privacy by Design:

In the wake of the Facebook-Cambridge Analytica scandal, privacy has become an increasingly common concern among businesses. You can protect the privacy of your business and its clients or customers, however, by implementing privacy by design. Pioneered by former Information and Privacy Commissioner of Ontario Ann Cavoukian, privacy by design is an engineering framework in which privacy is taken into account through every stage of the design process. Rather than waiting until the end of the design process to create feature or safeguards for privacy protection, for example, you should add them at the beginning and optimize them thereafter.

#4) Partner With the Right Cyber security Professionals:

You aren’t alone in your battle against hackers and data theft. There are cyber security firms that specialize in this line of work. By partnering with the right cyber security team, you’ll create a stronger and more secure IT environment, thus lowering the risk of stolen data.

#5) Information Governance System:

Finally, consider using an information governance system in your business. This enterprise-level framework consists of legal and regulatory guidelines regarding the use, storage and transmission of data. It’s a comprehensive guide outlining how your business should handle data.

Even with these tips, there’s no way to completely protect your business’s data from theft. Hackers continue to develop new techniques and tools to infiltrate the most secure systems. The good news is that you can significantly lower your risk of sustaining a data breach by following these strategies.

 

Yorkville Advisors are a global investment partner.