Category: startups

Trade Secret: Definition, Law and Frequently Asked Questions

Definition of Trade Secret

Trade Secret Basics

It’s common for many people to have secrets known only to them or very few people. These people are always a privileged few who have, one way or the other, earned the privilege of this information. The same applies to some, if not most, of the global conglomerates worldwide. It is called TRADE SECRET. 

A trade secret is a classified practice or development method in a company that is only accessible to a few people, mainly within the company’s core circle, and inaccessible to the general public. This classified information gives the company a marketing advantage over its competitors. 

A trade secret is often the result of several months or years of research, development, test-running, and improvement. Every brand knows that if it can stand out from other brands in a distinctive manner, it will have a better competitive advantage. 

Laws governing Trade Secrets 

The Economic Espionage Act of 1996, as described in Chapter 90, Title 18, Part I, of the United States Code, governs the definition and protection of trade secrets in the United States. Furthermore, due to a 1974 proceeding, trade secrets are subject to state jurisdiction, allowing each state to create its laws on trade secrets.

A trade secret is different from a patent in that it must be kept secret, and the company’s ability to keep it confidential is the key to protecting its competitive advantage. Unlike a patent, a trade secret is not something you can entirely stop another company from using if they can come up with that information through their personal research and development or market research. 

Patterns, formulae, designs, recipes, prototypes, procedures, software, and computer codes are all examples of forms that trade secrets might take. The public will be completely unaware of these because of their unique characteristics. But in whatever shape it takes, it has to;

  • Be Classified 
  • It must hold a financial for the developer
  • It must be in active protection

IP Protection Essentials for Startups: Safeguard Your Innovations and Stay Ahead of the Competition

What is Intellectual Property?

Intellectual property (IP) is the cornerstone of innovation, describing intangible assets (non-physical assets), creations of the human intellect owned and legally protected by an individual, a group, or a company. It’s the answer to any creator or inventor’s concern: ensuring that non-tangible assets can be treated with the same rights that apply to tangible assets. Today, most developed nations have structures and legal facilities catering to tangible and intangible assets, empowering startups and creative individuals to protect their unique ideas and stay ahead of the competition. 

The word intellect speaks about the faculty of reasoning, which is why intellectual property refers to inventions solely as a product of a person’s thinking ability. Intellectual property can take many forms; the most common are patents, copyrights, trademarks, and trade secrets

Although intangible, intellectual property may be far more valuable than a corporation’s concrete assets because it may give a competitive advantage. It is jealously guarded and maintained by the businesses that own it. Companies are vigilant in recognising and preserving intellectual property since it is valuable in today’s knowledge-driven economy. Furthermore, creating valuable intellectual property necessitates substantial investment in creativity and specialised work time.

IP Protection Essentials basics

The first thing you need to know as a creative individual looking to protect your intellectual property legally is that you do not just protect an idea because you think it is spectacular. A concept is not patentable, but the precise instructions for solving a technical difficulty are. 

How to Secure a Loan: 5 Key Factors Lenders Consider

Secure A LOAN

Introduction

In a world where competition is fierce for everything and anything, standing out is vital in any application you are making, especially regarding financial offers. This can be a big deal if you want to secure a loan.

When securing a loan from any lending institution like a bank, credit union or online lender, lenders consider vital keys before granting an interested borrower a loan. 

In this blog post, we will look at five keys that make a successful loan application. 

5 things lenders will think about before giving out a loan

  1. Credit Score and Record 

An applicant’s credit score is a three-digit score that shows a customer’s creditworthiness based on information such as the number of accounts, history of repayment, and debt level. 

An applicant’s credit score is the most essential factor that lending institutions consider when reviewing their ability to secure a loan. Various factors, such as loan repayment record, debt load, and credit history length, determine a person’s credit score, which ranges from 300 to 850.

A poor credit score, typically below 600, will be a massive turn-off for most lenders because it poses to them that you will be unable to pay back your loan. Lending is a business and not a charity work. The lending organisation will only stay in business if the borrower repays the loan. A good credit score is always about 700, and above, a score of 800+ is always regarded as excellent. 

Most institutions will not outrightly tell you their preference for a credit score; however, you want to ensure that you meet a great credit score as a borrower. 

5 Reasons to Start Your Career as an Independent Artist

Independent Artist - Title Image

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Who is an Independent Artist 

An unsigned artist or independent artist is a term that describes an artist, musical band, or group that has no contractual obligation to a record label. In the past, it was only common for independent artists to make an income from performing at live events because of the cost of producing and distributing their tracks to relevant publishers like radio and TV stations and selling vinyl or CDs.  The situation is very different now, as a growing number of people are using social media platforms, making it possible for virtually anyone to launch a career and achieve success in a relatively short amount of time. 

An unsigned artist is an artist, musical band, or group that does not have any contractual obligation to a record label. 

Landing a record deal with a record label has many benefits, especially for an artist looking to break through in the music industry. The availability of massive funding for artists signed by a label is a game changer and will surely make a huge difference, especially if such artists are diligent.

Working with a record label has also proven to be a huge regret for some artists; in fact, in the long run, an independent artist can amass great wealth compared to a signed artist. In that light, let’s take a look at a few important things to keep in mind as an independent artist. 

Making it big as an independent artist

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Facts about choosing a career as an independent artist:

  • Higher chances of making more money

The first thing to note as an independent artist is that, despite the fact that an independent artist might not sell as many albums as a label artist, the chances of making more money as a prominent independent artist are very high because no agency is trying to recover and make profit from the amount they have invested in the artist.

An independent artist would have access to the majority of the revenue from his or her music business. Most labels would only give the artist about 20% of the income until the label had fully recovered its investment. 

Independent now have the opportunity to distribute their music to music streaming platforms like Spotify, Apple Music, Deezer, Audiomack, and BoomPlay. All these streaming apps send regular royalties to the artist’s account through the music distributor they use. Some very reliable music distributors are Tunecore, Distrokid, CDbaby, and Ditto Music

  • Total right over personal music 

Another beautiful part of being an independent musician is having total control over your music. This means that you have the freedom to sell your song to any organisation, use it for filmmaking purposes, or use it as a jingle, and earn a lot without having to be bothered about sharing it with anyone. 

It also means that you can choose to make demands or negotiate for collaborations. Because you have the full right to your music, you get your performance royalty directly and will not need to send a share to any label. 

  • Ability to specialise in one’s strengths

Freedom is one of the characteristics of true success, and as an Independent (indie) artist, this is one of the benefits that come with the package. An indie artist has complete creative control over the genre of music they want to make. 

Most mainstream artists start out with a big bang, but their music gets old quickly because they focus on the moment rather than the lasting connection it should make. This is because most mainstream artists do not have creative control over their music. 

Indie artists, on the other hand, will get to niche into their creative strengths, and eventually, as time passes, their listeners will continue to listen because of the bond that has developed. This, in the long run, means more streaming royalty for an indie artist. 

  • You can create a personal brand that connects with fans

Social media has made it possible to reach thousands and millions of people, building a connection that goes beyond music. People want to connect with their celebrity star at a deeper level, and as an indie artist, this is very possible. The fun part of this is that fans can give their favourite artist luxury clothes, shoes, cars, and houses.

Independent Artist performing to Crowd

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  •  Ability to pick and choose collaborators

Being successful also means that you can choose the people, groups, or brands that correspond with your values. As an indie artist, you get to decide if it’s worth more than making millions of dollars. You can choose to reject offers from brands that do not represent your values and principles if you are the type who loves to build a legacy alongside a music career.  

Bottom Line

Building a music business, like every other kind of business, needs capital to become an established business that rakes in millions of dollars. Being an indie artist will not eliminate the need for capital. Hence, the hard work that is required to build a successful music business as an indie artist is no less than that of a signed artist. This means that as an indie artist, you will need the support of friends, family, and even an angel investor if you do not have a massive sum of money sitting in your bank account. 

How to Start Your Real Estate Business with What You Have

Title Image for REAL ESTATE BUSINESS BLOG

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Introduction to Starting Your Real Estate Business

Starting a real estate business can be very intimidating when you don’t have a lot of money to invest in it. In fact, the thought of starting a real estate business when you are broke can be so disheartening that you will dump your ambitions of becoming an entrepreneur or a business owner.

The real estate business sphere is an ever-booming sector that has made many rich and still does. It’s a very fruitful field with opportunities for many, ranging from buying properties to their full development, leasing, and selling. All these are viable streams in the sector, and the easiest way to be involved in this business is to have a huge amount of capital that you can invest in the sector. This, however, does not mean it’s the only way to invest in the real estate sector. 

Cash is not the only thing that you can bring to the table; your skill, time, and even professional expertise can help you acquire a portion of the wealth in this booming sector. Let’s look at a few ways to take advantage of this fruitful sector and earn an income without breaking the bank, even if all you have is your knowledge or a relevant certificate. 

How to secure a position in the Real Estate Business

  1. Discover your niche

In the real estate business, there are specific niches in the market you can choose to focus on, and the number you can carve out for yourself is endless. However, when choosing a niche for yourself, especially when you do not have huge capital or even anything to invest in the sector to begin with, your options might be limited. This does not mean that the remaining options are not still able to help you scale up until you can raise enough funds to enter the deeper part of the sector. Let’s look at a few niches in the sector:

  • Location-based real estate

This involves narrowing down on a particular neighbourhood, town, or county. This will help you provide deep knowledge of that area to customers who might be willing to purchase or lease a property there. 

  • Demographic Real Estate 

This involves rendering your real estate business service to a particular group of people, such as first-time buyers, celebrities, military personnel, etc. This is an excellent opportunity to get a referral from those who have patronised you since you started your business.

  • Property rental real estate niche

According to the National Multifamily Housing Council, at least 44 million households in the United States rent their houses. This means that landlords who have properties will contact you if you decide to work hard and be prominent in this niche. You will also constantly get offers because it’s easier and more affordable to rent than to buy a property. 

Other real estate niches are Agriculture, New construction, Ageing and Historic properties. 

  1. Write a business plan for your real estate business.

Do not forget that even though you are starting with what you have right now, which could even be nothing, it doesn’t mean that you will remain like that forever. This means that you have to ‘plan to get big‘ and not ‘get big to start planning‘. 

Having a concrete business plan will help you go from where you are to where you plan to be. A business plan also helps you be able to confidently pitch your business goals to anyone who might be willing to put some dollars into the success of your business. A proper business plan will definitely provide answers to the vision, core values, uniqueness, and business model of the company you are willing to run. 

Have a BUSINESS PLAN FOR YOUR REAL ESTATE BUSINESS

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  1. Find a Mentor 

Learn from a professional around you, send your dream realtor a gift, and ask for a time in his or her schedule to grab a Coffee. It is true that the more you learn, the more you will earn. A mentor walks you through the process and can save you a tonne of losses or problems that can arise from making the wrong deal. 

If you plan to get to the top, you will need to build strategic relationships with people who have gone before you and have a track record of profiting from the business. Some mentors have built a brand that cannot take business deals below a profit margin. They might just recommend you to such clients, and a referral from one industry figure can be a breakthrough for you. 

Have a Mentor for your REAL ESTATE BUSINESS

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  1. Get on social media even if you cannot maintain a website.

One way to increase your potential for securing new customers is to meet new people. A social media account that is not only built around your business but also around your person puts a face to your business, especially in its infancy, and allows customers to trust you better. Don’t be a 21st-century businessperson who isn’t tech-savvy. Be bold and energetic, talk about your business, and land more customers. 

  1. Get into Partnership

If you have a big idea, you will need a lot of money. However, with a great business plan, convincing experience, and a good proposal, you can secure a partnership with someone or a group of people who are willing to invest in a real estate business. This will mean that the angel investor(s) will fund the business while you manage and operate it. 

A big mistake is to enter into a partnership without discussing how you will share profits with your investors. This will ruin the company’s future, and if it doesn’t, it will cause a lot of contention as the company grows. So talk about it before starting off, and if you have already started the business, it’s not bad to do that now. 

A partnership could also mean that you will work with different professionals who are your friends or business partners to develop a property. Then, after selling the property, you will pay them for their service and give them a share of the profit as compensation. 

  1. Be an affiliate

An affiliate is more like a middleman or woman who helps sellers locate buyers or the other way around. The amazing thing about affiliate marketing is that you don’t get to do anything so expensive other than reach the realtor or seller directly and agree on a percentage commission on any invited customer who buys leases or rents. There are other online affiliate realtors like Realtor.com, All Things Real Estate, Avail.co, and Foreclosure.com that pay you for any customer who patronises using your designated affiliate link. 

  1. Sell properties for desperate sellers.

There are many reasons why people choose to sell their properties urgently, such as bankruptcy, divorce, relocation, or diversification of funds into a very promising business deal. This, however, can be complex because a desperate seller might be selling a huge problem to you. The way to avoid this is by doing a diligent search on the reason the seller wants to sell so desperately and having done that, you can reach out to people who will be willing to buy or borrow some funds to buy the property and refurbish it so that you can give them back the capital and an interest after selling it. 

  1. Build relationships with your customers.

Don’t forget that the most effective referral is one that comes from someone who has patronised your business. They are your strongest advocates in the business world for your next customer, especially in a business field like real estate, where a false deal can lead to a loss of millions of dollars.

Follow up on your customers, constantly send them emails, and even if they haven’t patronised you, you already treat them as though they have. This will give you a long-term thinking faculty. A good way to follow up with customers is to employ a CRM tool

Also, Read – Understanding Customer Relationship Management 

Final Note on Real Estate Business

Achieving success in real estate is not merely a matter of getting rich quickly; rather, it is a long-term endeavour. In order to achieve success, you need to be willing to put in the effort and continue to develop by continuously acquiring new knowledge.

8 Practical Tips to Build Your Startup Brand From Scratch

Have you ever wondered why there’s a growing fascination with building startups? Nowadays, almost everyone dreams of adding “Founder of a Startup” to their bio (sounds amusing, doesn’t it?). Well, as easy as it sounds, the excitement of building something from scratch, shaping your destiny, and having the freedom to bring your unique ideas to life. Yet, here’s the catch: none of those goals are attainable without a strong brand. 

A great startup brand sets your business apart, resonates with your audience, and gives you a competitive edge. In this blog post, we will discuss the essential tips for effectively establishing and growing your startup’s brand, transforming it into a formidable force to be reckoned with.

So, let’s start with a clear definition of a startup: 

A startup is a newly created business venture characterised by its innovative nature, often driven by a unique product, service, or business model. If you’d like to learn more about the definition, you can visit this link. 

In this blog post, we’ll equip you with the essential tips to establish and grow your startup’s brand effectively, transforming it into a formidable force to be reckoned with. 

1. Understand Your Target Audience:

Achieving brand success relies on a profound understanding of your target audience. In-depth market research helps you know your potential customers’ demographics, preferences, needs, and pain points. 

Create buyer personas to represent distinct segments of your target market, allowing you to tailor your brand messaging with surgical precision. For instance, in the case of a startup planning to offer lodging options through a website where people can rent out spaces to travellers, such a startup would need to understand its potential customers thoroughly. This includes segmenting them based on their preferences—some might prefer solo stays, while others might be couples or groups. 

2. Define Your Brand Identity:

Before delving into marketing and promotional endeavours, laying a solid foundation for your brand by defining its “identity” is imperative. A brand identity encompasses distinctive traits that dictate its perceived personality, appearance, and behaviour. Elements such as history, name, personality, and visual identity contribute to the brand’s essence. But even before you decide on the identity, you need to answer questions such as: 

  • Why did I start this business? (Startup Purpose). 
  • What differentiates your startup from others, and what do I want to be known for? (Startup Differentiation and Advantage)
  • Who is your target audience, and how do I want them to perceive your brand? (Startup Buyer Persona). Check number two for more insights. 
  • What are the goals I want to achieve in a year and beyond? (Startup Goals). 

By following these, you are ready to build a solid foundation for all your brand-building efforts. 

3. Develop a compelling brand story:

An impactful and compelling brand story nurtures an emotional connection between your startup and its audience. Veronica Miller, Director of Digital Marketing & Growth at VPNoverview, says, “By creating your startup, you are creating a narrative that people will always want to associate with. 

Customers are interested in following your journey as you face both accomplishments and setbacks, so they can see how the business is achieving long-term success and feel like they are a part of your “journey.” They can gain knowledge from the experiences of others and build trust over time, which then leads to “sales” and “referrals.“. 

Here’s how to make your own: 

  • Share your journey, the challenges you’ve overcome, and the vision that drives your business.
  • Make your story relatable, authentic, and inspiring. 

By sharing your startup’s story consistently across various platforms, you can engage and captivate your audience, fostering brand loyalty and trust. 

4. Develop a Consistent Visual Identity:

Your startup’s visual identity, comprising your logo, colour palette, typography, and design elements, is vital for brand recognition. To illustrate, consider the well-known individuals you follow on social media. When you come across their content, you can quickly and accurately link it to them by noticing the consistent use of colours, fonts, distinctive writing style, and familiar video style. 

Tip’s:

  • Design a visually pleasing and consistent brand identity that shows your beliefs and builds a connection with your audience. 
  • Ensure your visual identity is consistently applied across all your marketing materials, website, social media profiles, and other contact points. This helps reinforce brand recall and maintain a consistent brand image. 

Maintaining a consistent visual identity for your brand works similarly and dramatically improves customer retention.

5. Utilise social media and content marketing:

In today’s digital age, social media and content marketing must be considered when establishing and enhancing your brand’s presence. Let’s give more context to these terms for a better understanding:

In the context of brand building, social media refers to the use of various online platforms and networks, such as Facebook, Instagram, Twitter, LinkedIn, and more, to connect, engage, and interact with your target audience, while content marketing is the strategic creation and distribution of valuable, relevant, and informative content to attract, engage, inform, educate, entertain, sell, and retain a specific audience. 

To get started:

  • To effectively connect with your target audience, it’s crucial to research and write down the specific platforms they visit most frequently and understand the types of content they prefer, including the websites they browse and the videos they consume regularly. 

By gathering these insights, you can strategically tailor your content to match their interests and preferences, leading to a more effective and engaging online presence. To avoid getting overwhelmed, start by initially focusing on a critical platform and gradually expanding. Simultaneously, prioritise building an e-mail list alongside your social media efforts, ensuring a direct and reliable channel of communication.

  • Share valuable and engaging content related to your industry, providing your audience with insights, tips, and solutions.
  • To reach a broader audience, incorporate different content formats, such as writings, voiceovers, blog posts, videos, infographics, and podcasts. Mixing up your content types is wise to ensure you engage different segments of your audience effectively. Creating a content calendar is a valuable tool for achieving this balance. 
  • Engage with your followers, respond to comments, and actively participate in conversations to establish brand authority and foster a loyal community.

6. Build Relationships and Partnerships:

Collaborating with other brands, influencers, and industry experts can boost your startup’s brand visibility. 

  • Seek out partnerships and collaborations that align with your values and target audience. 
  • Co-create content, host joint events and webinars, or participate in guest blogging opportunities. 
  • Additionally, prioritise cultivating robust relationships with your customers. Provide exceptional customer service, attentively listen to feedback, and personalise interactions to create a loyal customer base that serves as brand advocates.

7) Keep Track of your Finances 

For self-owned businesses, it is crucial to stay on top of finances and maintain financial accountability. This includes tracking your startup’s finances, implementing effective accounting systems, and fulfilling your tax obligations.

Joe Troyer, CEO and growth advisor of ReviewGrower, emphasises the importance of accounting responsibilities: “From opening the right bank account to understanding your startup’s financial obligations, recording transactions, generating regular reports, and hiring accounting personnel, fulfilling your accounting obligations is crucial. Neglecting these responsibilities can result in wasted time, money, and even legal consequences.”

Maintaining accurate financial records and ensuring compliance helps you stay organised and prepare for future growth, funding opportunities, and potential partnerships. It also lets you make informed decisions and demonstrate credibility to investors and potential collaborators. 

8) Secure your Intellectual Property (IP) 

To avoid tears upon tears, it’s always advisable to safeguard your startup’s interests. This includes trademarks for your startup’s name and brand, patents for your unique product or service, and even securing your brand’s visual identities.

Trademarking your startup’s name and brand provides legal protection, preventing others from using it and potentially diluting your brand recognition. Applying for patents ensures that you have exclusive rights to your invention, safeguarding it from unauthorised use or replication. Additionally, securing your brand’s visual identities, such as logos and designs, helps maintain brand consistency and prevents misuse by others.

By protecting your IP, you establish ownership and preserve the uniqueness and value of your startup. It also provides a solid foundation for potential partnerships, collaborations, and future growth, as you can confidently assert your legal rights and protect your brand’s integrity. 

Bonus

Register your startup with the appropriate legal business registration process in your country or place of residence: 

This considerable step might seem hard due to the processes and requirements. Still, consulting with legal or business professionals familiar with your local regulations is recommended to ensure a smooth and compliant registration process for your startup. Having your registration number or legal documentation readily available empowers you to swiftly engage in business ventures/opportunities that demand such credentials. This preparation ensures you take advantage of valuable opportunities due to delays in obtaining the necessary paperwork.

Conclusion:

Building a startup’s brand from scratch requires careful planning and strategic decision-making. By following the six tips listed above, you can create a solid and memorable brand that resonates with your audience and sets your startup up for success.  

Also, you should check out Part Two of the Startup series, “Discussing Startup Funding.” By clicking this link, take advantage of our valuable insights and expert advice! Also,  join our e-mail list to receive notifications as soon as we publish them. Stay connected and stay informed!

FIVE FUNDING OPPORTUNITIES AVAILABLE FOR STARTUPS AND ONGOING BUSINESS

Types of Funding you can secure as a startup

There are now several means for businesses, especially startups, to access funds and scale up their operations, moving away from the traditional culture of getting capital. Business funding has become more abundant in recent years, but knowing where and how to access it is essential.

Usually, the money is for essential projects, business growth, buying equipment, renting space, or paying staff during slow times.

If you have been considering expanding your business, this article presents the perfect opportunity to learn about the options and make a significant turnaround for your company.

5 “common” types of funding available to businesses: 

You need to know that different businesses operate at varying levels and capacities, determining the accessibility and availability of funding opportunities. Understanding the advantages and disadvantages of each funding option is crucial to securing funding, especially as a startup. Let’s explore the five most prominent ones!

  1. Angel Investors
Angel investors are a great option for securing funds for your startup

Angel investors play a vital role when it comes to raising initial capital for startup businesses. They typically invest in exchange for a percentage of ownership in the company. This investment can be a one-time injection of funds to kickstart the business or an ongoing infusion of capital to support product development and market entry.

Angel investors are often more accessible to startups than grants and loans. They can be individuals running successful companies or professionals involved in various projects. They may also have a personal or familial connection with the entrepreneur.

Unlike traditional lenders, angel investors do not focus primarily on lending money. They invest in promising ideas and expect a return on their investment if and when the business becomes successful. Depending on their preferences, they may be hands-off or actively involved in the startup’s early stages.

Pros:

  • Funding is not a loan, so it does not require any repayment if the business fails. If the company succeeds, they will get a share, but if it falls flat, they will not require any repayment from you.
  • Startups backed by angel investors have a higher chance of long-term success and significant growth. A study conducted by Harvard Business School proves that startups supported by Angel Investors have a greater chance of longevity, maintain substantial increases, and experience a higher return.  1

Cons: 

  • Angel investors usually expect equity or a percentage of profits, reducing the founder’s control over the business.
  • If you have an investment from an angel investor, there is a high chance that you will not have full control over the business. 
  1. Grants

Grants are financial assistance provided by granting entities, which can be public organizations, charitable foundations, specialized institutions, or socially responsible businesses. These grants are given to individuals, non-profit organizations, businesses, or local government bodies.

Grants are a great option for businesses because the business owner does not have to worry about repayment, and some grants offer substantial amounts of money based on the company’s idea or investment objectives. 

Detailed information about grants, including conditions, deadlines, and application requirements, is freely accessible through official government sources and related websites.

Pros:

  • Grants provide businesses with a convenient source of funding that doesn’t require repayment. Moreover, certain grants offer substantial financial support, depending on the company’s concept or investment objectives.
  • Receiving a prestigious grant demonstrates recognition for your work, serves as a valuable promotion, and enhances credibility with organizations, investors, and potential clients.

Cons:

  • Numerous innovative businesses aspire to obtain grants for their promising ideas, leading to intense competition for one or another. Anticipate challenges and obstacles, but remain resolute in your pursuit.
  • When seeking a grant, it is crucial to precisely outline the intended allocation of funds. After being awarded the grant, adherence to the proposed plan is mandatory. Hence, there is really no room for creative diversification of grant funds.
  1. Bank Loans
Bank Loan - One way to secure funding for business.

Photo Credit: Upklyak on Freepik

Bank business loans are a stream of commercial financing available to qualified businesses. They include long-term loans, equipment loans, microloans, and lines of credit. These loans can help cover operating costs, purchase equipment, pay staff, or aid the business’s growth.

Lenders (banks) assess a borrower’s financial flow, credit score, and debt levels before deciding to offer a loan. Traditional banks charge interest rates based on the venture’s risk level. In recent years, online lenders have also started offering loans, which were once rare.

Conventional business loans differ from loans offered by the U.S. Small Business Administration (SBA). SBA loans can be gotten through banks or online lenders; they usually have longer reimbursement terms and lower interest rates. 

A loan, unlike a grant, must be paid back, even with an agreed-upon percentage interest rate.

Pros:

  • Attractive Interest rate: Banks usually give loans to businesses and would give larger amounts of money as loans than most online funding platforms. On average, small businesses pay 6 percent to 7 percent for loans from traditional banks, while the average borrower pays 13.5 percent interest for SBA loans.
  • Flexible Use: You can use the loan proceeds for any business-related expenditure in most instances. Even if your spending deviates slightly from what you indicated in the loan application, the lender won’t object if you make timely loan payments.

Cons:

  • Strict requirements, including good personal credit score and substantial business revenue, may limit approval.
  • Extensive documentation is typically required, and startups may face difficulty qualifying for loans. Banks do not readily offer loans to businesses or ventures that haven’t been operational for over two years and show a huge chance for profit.
  1. Venture Capital

According to Forbes Advisory, the definition of venture capital is this: 

Venture capital (VC) is a type of private equity that provides financial backing to startups and early-stage businesses with limited or no operating experience but substantial potential for success and expansion.

A venture capital firm is an investment body that takes care of venture capital funds and makes the funds available to startups. Venture capital organizations invest in a variety of sectors, although the majority of the investments made by venture capitalists are focused on the technology industry. Many of the most well-known venture capital organizations are headquartered in Silicon Valley, though they can be found across the United States of America. Prominent venture Capitals include companies like Andreeson Horowitz, Sequoia Capital, and Y-Combinator.

Stages of Venture Capital Investment:

Seed round funding

Seed round funding marks the initial stage of venture capital investment, where investors offer a modest amount of capital to support a newly established company in formulating its business plan and developing a minimum viable product (MVP). The purpose of this funding is to help the startup validate its concept and progress towards attracting further investment in the future.

Early-stage Funding

Early-stage funding, sometimes called series A, series B, and series C rounds, assists startups in their initial stages of growth. As startup owners scale their enterprises, the funding amounts are higher than in the seed phase.

Late-stage Funding

Series D, E, and F rounds are late-stage venture capital funding. Startup companies should be producing income and growing rapidly at this stage. While the company is not yet profitable, the future seems bright.

Pros:

  • Venture capital provides substantial funding for scalability and growth.
  • Venture capital firms offer expertise, mentorship, and guidance to startups.

Cons:

  • Venture capital investments often come with a loss of control as investors demand equity in the company.
  • Founders face high expectations and pressure to achieve specific targets quickly. This results in a situation where the founder cannot make a long-term plan for the business.
  1. Crowdfunding

Crowdfunding is collecting small investments from many people to launch a new business venture. It uses the enormous reach of social media and specialised crowdfunding platforms to link investors and entrepreneurs, thereby increasing entrepreneurship’s chances. Crowdfunding expands the financing possibilities for new businesses by reaching a wider range of potential investors beyond the conventional circle of owners, family members, and venture capitalists. 

With crowdfunding, entrepreneurs can secure significant funding, ranging from thousands to millions of dollars, from individuals willing to invest. It allows anyone with a compelling idea to present it to enthusiastic investors without needing a physical presence. 

The two prominent types of crowdfunding are reward-based, where backers receive non-financial incentives, and equity-based, where investors gain a share of the company.

Hundreds of individuals aspiring to develop or endorse the next groundbreaking innovation are drawn to crowdfunding platforms like Kickstarter, Indiegogo, and GoFundMe. Platforms like Patreon and Substack have expanded the scope of crowdfunding by providing a means for creators such as artists, writers, musicians, and podcasters to support their creative endeavours through consistent financial support.

GoFundMe was regarded to be the largest and most notable crowdfunding platform in the year 2023. 

‘Notable crowdfunding feats’

  • Palmer Luckey started a Kickstarter effort in 2012 to raise funds to produce virtual reality headsets made especially for video game developers. The campaign exceeded its initial objective and raised $2.4 million, ten times its $250,000 goal.
  • M3D, a company established by two friends specializing in the production of compact 3D printers, serves as yet another compelling illustration of a business that achieved remarkable success through Kickstarter campaigns. Back in 2014, David Jones and Michael Armani managed to secure an impressive $3.4 million in funding on Kickstarter for their revolutionary Micro 3D printer.

Below are the Pros and cons of raising a business fund through crowdfunding: 

Pros 

  • The main benefit of equity, reward, and donation-based crowdfunding is the potential exemption from repaying the funds. However, in exchange for crowdfunding contributions, you might be required to give up a portion of your company’s ownership. Some businesses prefer crowdfunding over loans to avoid concerns about loan default. Nevertheless, if you decide on debt-based crowdfunding, you must reimburse the backers.
  • Credit checks are usually not necessary. In most cases, crowdfunding platforms do not conduct credit checks, meaning your personal or business credit score will not be affected. However, if you opt for debt crowdfunding, which involves obtaining a loan from multiple investors, there is a higher chance that a credit check will be required.

Cons

  • Business loans can be expensive due to fees and interest. Crowdfunding can help you avoid interest payments, but fees are still involved. For example, Kickstarter charges a 5 percent fee on all donated funds, along with payment processing fees ranging from 3 to 5 percent. However, these fees are only applicable to successful campaigns. Alternatively, platforms like GoFundMe do not charge a fee for donations, but there is a payment processing fee of 2.9 percent.
  • Your business concept might be stolen. Establishing a crowdfunding platform also involves promoting your business during its initial phases. If your idea has not been copyrighted or patented, someone could steal it. If a competitor converts that idea to a product or service before you, your business could face negative consequences.

Conclusion

Businesses can make educated decisions about the most effective means of securing the necessary funds to support their growth and development if they first investigate and understand the five potential funding sources listed here.

A small business owner, running a tailoring business from home, holds fabric while examining designs on a sewing table. Text overlay reads 'Ensuring First-Year Business Success: Business Validation Guide

How to Master Business Idea Validation to Prevent First-Year Failures: The Only Guide You Need for Success

A small business owner, running a tailoring business from home, holds fabric while examining designs on a sewing table. Text overlay reads 'Ensuring First-Year Business Success: Business Validation Guide

Did you know that more than 90% of startups fail within their first few years of operation? Some of the reasons are that they failed to validate business ideas.

Despite having innovative ideas and putting in dedicated efforts, many entrepreneurs face the daunting challenge of navigating through a highly competitive market landscape. In the vast sea of businesses, standing out and succeeding requires more than just a good idea. It demands thorough business validation. In this comprehensive guide, we’ll explore 7 key steps to validate your business idea and prevent first-year failure.

What is business validation?

Business validation is when someone checks to make sure a business idea (product or service) is good enough to gain traction and scale up before they start it. The business owner wants to understand what he/she is getting into, foresee what the firsthand experience and market response will be like, and see if it will work and people will like it. This helps them make sure the business will be successful.

The Importance of Idea Validation

Validating your business idea is incredibly important. Imagine spending a lot of time, effort, and money on a business only to find out that nobody wants to buy your product or service. By validating your idea, you can gather proof that your concept has potential. This reduces risks and increases your chances of success. So, before diving into the details of your business idea, make sure to validate it first.

The simple six steps to validate business idea: 

1. Understand and identify the problem (need): 

To run a successful business, it’s essential to solve a problem that your customers have. For instance, have you ever used a product or app that seemed like it was made just for you, with features you never even knew you needed? That’s what happens when you do this step right. To create a strong business idea, follow these steps:

  • Start by defining the problem your business idea aims to solve. You might ask questions such as, “What do people genuinely need? Although customers don’t know what we need sometimes, as Steve Jobs stated, it’s your job to think deeper.
  • Think about the features and benefits of the business’s products and services.
  • Ask tangible questions, like: does the business idea exist, and do they have existing customers?
  • Look at the statistics, case studies, and look around you both online and offline to help highlight the problem’s significance. 

2. Market Research (Know Your Audience):

In-depth market research will help in understanding your target audience’s preferences, behaviours, and needs. Most importantly, it helps confirm whether there is a starving market for the business idea: “Will they be willing to afford the pay?” and “Is it worth the time, effort, and funding?

  • Gather valuable insights and use tools such as online surveys, focus groups, and competitor analysis. 
  • Google Trends can help you see if people are searching for a solution to your business problem. 
  • Google Keyword Planner can help you research and validate your ideas. 
  • You can also visit popular e-commerce websites like Amazon and Alibaba to see reviews and marketing. 
  • To gather information, type the product or service into Google Surveys. Survey questions can be open-ended, such as: Are you interested in finding a solution to your problem?. How does the problem affect you?How do you currently solve this problem?. How would you love to see your problem solved?. How often would you use love to solve a problem?. How much do you think you can afford the solution?.

Would you love discounted membership payments? Ensure your questions are well-detailed to prove whether your business idea is valid.

3. MVP (minimum viable product) testing: 

When it comes to validating ideas, the minimum viable product (MVP) is a game-changer. It involves testing a new product or service while it is still in development after conducting market research and analysing customer needs. This is not a new concept, as companies frequently use this approach. For example, Instagram recently offered beta testing features to selected countries, while skin care companies give out small samples for customers or influencers to try and review honestly.

To validate your business idea using MVP testing, 

  • Create a simpler version of your product or service and offer it to a select group of potential users. This will help you get faster feedback to see what works well and what needs improvement. Dropbox is an example of a company that started with an MVP and evolved based on user input, showing the effectiveness of this approach.
  • Connect with experts, mentors, and potential customers to gain insights and endorsements. A trusted endorsement from an expert can add credibility to your concept. Look for networking events, online forums, and social media groups related to your industry.
  • Use A/B testing to validate different aspects of your business. Create variations of your product or service and test them with your target audience to validate different aspects such as pricing, marketing messages, or product features. You can use platforms like Google Optimise or Optimizely to set up A/B tests effectively. Paid advertising like Google Ads can link individuals to product or service testing, and websites that accept test runs of products or services can be other options. 
  • Meet your customers in person. Offer your products in small sizes and ask your customers to help you test them in return for feedback.
  • Consult family and friends to help you test your product or service and give you genuine feedback. 

As long as customers can ask for your products or services and gain access, this is also known as an MVP.

4. Landing page or prototype testing: 

You can consider developing a landing page or prototype. Such a page or prototype can also serve as a virtual testing platform for your business concept.

  • Craft a straightforward landing page showcasing your product or service and its advantages.
  • Monitor metrics such as click-through rates and sign-up conversions to evaluate interest levels. 
  • Tools like Unbounce or Wix can assist in swiftly and effortlessly creating professional landing pages.

5. Feedback collection: 

Your feedback collection matters in validating whether your business idea is scalable because this helps you improve your business concept. So, create open channels for honest feedback while emphasising the importance of impartial opinions. You can gather insights through online surveys, feedback forms, or direct interviews, then use the feedback you receive to evolve and enhance your business.

6. Pre-sales and pre-orders: 

Before launching a new product or service, it’s a good idea to secure pre-sales or pre-orders. This can help you validate demand, generate early revenue, and gauge genuine interest among potential customers. It also helps you finance the production process, especially if you don’t have enough cash to start. 

To do this effectively, you’ll need a well-crafted marketing strategy and various channels, such as social media, marketing hubs, and offline channels. Make sure to organise to reach your target market.

7. Financial Feasibility: 

Before launching a business, it’s important to assess its financial viability, which will strongly hep you validate the business idea. To do so,

  • Start by evaluating your business’s cost structure, which should include production, marketing, and operational expenses. 
  • Next, create a clear pricing strategy that covers your costs while remaining competitive. 
  • Finally, explore potential revenue streams and projections to ensure that your business can sustain itself over time. 

By taking these steps, you’ll be better positioned to build a successful, sustainable business.

Let’s Go Practical: Let’s make things simple and easy to understand:

Business Idea: We can create a helpful guide called “SCALE-UP” to help you validate your business idea. Each letter in the acronym represents a step in the validation journey, and we’ll provide a practical example for each step.

S: Silly Test Scenario:

When testing an idea, start by putting it through a humorous and unlikely scenario. For example, imagine pitching a skincare product to a group of boys by telling them how it could help them save their relationships on special occasions like Valentine’s Day. If the audience laughs and approves of the idea, it shows that it has the potential to be entertaining and relatable.

C: Conversations with Colleagues:

You could discuss it with your colleagues and engage them in conversation. If someone expresses interest and says, “I would use that product or book the service, pre-order, or purchase it immediately when it’s out,” then you are tapping into great business success. 

A: Awkward Friend Approval:

When presenting your concept to a friend who always orders from your competitor, pay attention to their reaction. If they can’t find a reason to object, it might mean that your idea has better appeal than you’d expect, and you’re getting positive feedback from someone who knows a lot about apps. This can help you understand how your idea fits into the app landscape.

L: Leisure chat:

When you’re relaxing with friends, why not pitch your business idea? If your idea resonates with them, they’ll talk about it with excitement and genuine interest. When they start imagining how they would use your product or service, you’ll know you’ve struck a chord. So grab your chance to share your idea with your friends during your free time and see where it takes you.

E: Elderly Wisdom Evaluation:

If you’re thinking about starting a business, consider talking to your parents, grandparents, or elderly relatives. They might be able to give you valuable insights. If they seem happy and nostalgic when talking about a brand from the past, it could be a good sign that your idea will be successful in the long run.

U: Unrelated:

If people are discussing swapping staplers for ergonomic chairs, your idea might be useful in an unrelated field. This means that your concept is sparking creative thoughts.

P: Playful Delivery: 

To get feedback on your business idea, you can offer free product or service testing to some potential customers. If they can tell you about the features they like the most, it will help you understand if you’re on the right track.

In conclusion, validating your business idea is a continuous process that requires effort. Remember that the business landscape is always changing, so it’s important to stay in tune with market changes and customer preferences to continue growing. 

If you have any additional steps that you’ve found helpful or have any personal business experience to share, please feel free to leave them in the comments. We’d love to hear and learn from your insights!

You might want to check out these two blog posts:

6 Ways You Can Use Your Skills to Make Money

7 Smart Business Strategies That’ll Catalyze The Growth Of Your Startup

6 Effective Customer Retention Strategies to Retain Your Customers

6 Effective Customer Retention Strategies to Retain Your Customers

How to make customers become loyal to the brand

The sustained prosperity of a company relies on the ability to cultivate strong connections with customers over an extended period. Are you looking to enhance the performance of your business? Consider focusing on your customers and the way your organization interacts with them. 

Modern customers consistently assess their rapport with the brands they engage with, and even minor mistakes can lead to losing a customer’s interest. Implementing various approaches to establish solid connections with your customer base can significantly impact your overall business success.

What Is Customer Retention?

Customer retention refers to the strength of a business or organization to help it retain its existing customers over a specific period. It is an integral part of business performance. It is frequently assessed by the customer retention rate (CRR), which reflects the percentage of consumers that stay loyal to the organization or continue to make purchases repeatedly over a set period.

Customer retention is a good sign of customer happiness, brand loyalty, and the general well-being of the company. According to the Pareto Principle, 80% of a company’s future revenues come from 20% of its consumer base. The more committed customers are to a company, the more inclined they are to try new items or bring in prospective consumers. It will be great to learn how to obtain customer retention metrics in order to plan the business’s growth properly. 

How to account for customer retention and critical metrics

As a business owner, monitoring Customer Retention Rate Metrics to gauge customer loyalty is crucial. To begin calculating the Customer Retention Rate (CRR), determine the time frame (which can range from a month to beyond a year). Supplementary factors used to obtain the retention rate include the following: 

How to calculate customer retention rate

How can this be achieved?

To begin, understanding the importance of cultivating enduring relationships with customers is crucial, as is identifying the necessary adjustments required to facilitate this objective while it is left to the customer to choose whether to patronize or not. These keys will ensure that you can multiply the chance of securing a lifetime interest of a customer. Let’s look at a few effective strategies to increase customer retention.  

1. Exceed expectations with unparalleled customer service: 

In a world where mediocrity is common, strive to deliver extraordinary experiences that leave customers in awe. 

  1. Surprise them with prompt responses, personalized attention, and genuine care. 
  2. Anticipate their needs before they even realize them. 
  3. Exceed their expectations at every touchpoint, going above and beyond to ensure their satisfaction. 
  4. Treat each interaction as an opportunity to create a lasting impression.

By consistently surpassing customer service expectations, you’ll forge strong relationships, inspire loyalty, and become your industry’s benchmark for exceptional service. For instance, Emirates Group has set the standard for the airline logistics business because of its undiluted customer experience. Indeed, this has played a significant role in her ability to record a whopping sum of three billion US dollars at the close of her financial year in March 31st, 2023. 

“Customer service is an integral part of our success as a business. Whether you’re one of our helpful Dnata and Emirates check-in staff, Marhaba meet and greet agents, or Contact Centre representatives, we all work together to provide the best customer experience day in and day out.” – Emirates Group

Let’s take a look at the second strategy to enhance customer retention.

2. Take advantage of Emails to foster relationships: 

Securing a place in a new and existing customer’s heart is like “wooing a woman.” It requires consistent visits, texting, and calling. While you may not be able to visit your customers or call them all, emailing might be the perfect opportunity to establish that tête-à-tête relationship. For several reasons, sending emails can be an effective tool for fostering customer relationships. 

First, emails allow your business to maintain regular communication with customers, informing them about new products, services, or promotions. This consistent contact helps build trust and keep the brand in mind. 

Secondly, personalized emails tailored to individual customers can make them feel valued and appreciated. By segmenting the customer base and sending targeted messages based on their preferences or purchase history, your business can demonstrate that it understands customers’ needs and is actively committed to meeting them.

Furthermore, emails provide an opportunity for two-way communication. Customers can efficiently respond to emails, provide feedback, ask questions, or seek assistance. Prompt and personalized responses to these inquiries show a commitment to customer satisfaction and will surely enhance the customer experience.

Lastly, emails can serve as a platform for delivering valuable content, such as educational resources, helpful tips, or exclusive offers. By providing relevant and engaging content, your business can establish itself as a trusted advisor, further strengthening the customer relationship.

Let’s consider the third strategy to enhance customer retention rate. 

3. Use social media optimization: 

Social media optimization (SMO) refers to utilizing social media platforms to effectively manage and expand a brand’s online presence and reputation. Its primary objective is to actively and positively engage with customers through various social channels such as Facebook, Instagram, Twitter, Thread, YouTube, etc. 

SMO involves tracking the brand’s presence on these social media outlets as well as customer behaviour and interactions.

Social Media Network Logos

Photo Credit- Freepik, “Vectonauta”

Research shows that there are more than 4.55 billion active social media users globally.” By implementing SMO strategies, your business/brand can publicize new products and services and swiftly address customer inquiries or concerns. The ultimate goal is to foster a continuous connection between the brand and its customers. This proactive approach to social media management helps establish a favourable brand image, enhance customer satisfaction, and build a loyal customer base.

4. Take advantage of CRM tools.

CRM, an acronym for “Customer Relationship Management,” with the most crucial part of the acronym being the letter “R,” which stands for relationship, has become a modern strategy to optimize customer relationships.

Without customers, there is no single reason to be in business. How a company handles its customer database points to the potentiality of the business’s success. This is because the connection established between the business and the customer is a major part of the customers’ decision-making. With a CRM system in place, the business can enhance customer relationships because of the following:

  • Definite and better knowledge of your customers: Gathering the correct data and developing a comprehensive consumer image can be a challenging aspect of business when creating customer connections. CRM is known for providing a deeper knowledge of every customer. 

CRM is a dependable communication tool that stores every customer contact/information in a single location and provides quick access to essential information. Its ability to track more client interactions is one of the reasons why businesses are beginning to consider it as an important investment. A CRM system allows your team to gain access to a contact’s information easily:

  1. Name
  2. Email address
  3. Mobile Phone Number
  4. Website
  5. Social media handles
  6. Job description
  7. Mutual relationships across contact lists 
  8. Language
  9. Date of Birth (DOB)
  • Better customer retention: CRM is an effective tool for keeping your customers happy, and it can locate and nurture potential and new customers. A CRM system ensures several “customer retention” benefits, such as alerting you when you need to send follow-up emails and contacting clients who haven’t been contacted over a long period and are likely to feel abandoned.
  • Better protection of data privacy: Data protection has become a very integral part of business in the 21st century, especially with the implementation of the General Data Protection Regulation (GDPR), impacting organizations under the jurisdiction of the European Union and those who deal with data from people under their jurisdiction. 

5. Deliver High-quality Products and Services: 

Delivering high-quality services and products is essential for attracting and retaining customers. This is simply because it has the highest effect on customer satisfaction and loyalty. This will also lead to several benefits for a business. Some of these are:

  1. Customer satisfaction drives loyalty and causes repeat purchases.
  2. Happy customers spread positive experiences, fueling the effectiveness of word-of-mouth marketing.
  3. Superior products/services create a competitive edge and appeal to customers over rivals.
  4. High quality builds trust, credibility, and forgivable and believable brand promises.
  5. High quality leads to fewer defects, fewer complaints, cost savings, and a better experience.
  6. Customers may be willing to pay a premium for high-quality products and services. 
  7. Satisfied customers are more inclined to leave positive reviews and high ratings online. 

Final Note:

Delivering high-quality services and products directly impacts customer satisfaction, loyalty, and advocacy. Businesses that consistently prioritize quality are more likely to thrive in competitive markets, achieve sustainable growth, and establish themselves as reputable brands within their industries.

6 Productivity Hacks for Your Startup in the Era of Remote Work

remote work

Remote work is on the rise, and more people are working remotely now than at any point in history.

According to statistics compiled by Hubspot:

  • The number of people working remotely at least once a week has grown by 400 percent since 2010.
  • At least 4.7 million employees in the U.S. work from home at least half the week.
  • 18 percent of executives work remotely than they work on site.
  • 30 percent of people work for an organization that is fully remote.
  • 46 percent of C-suite members work remotely at least on a part-time basis.

The above statistics are even further amplified by the state of things in the world right now. At the time of writing this, thanks to the COVID-19 pandemic, most countries of the world are on lockdown and organizations are forced to carry out the majority of their activities offline.

If you’re a startup and most of your employees have to work from home, how do you ensure peak productivity? Below are six ideas for you:

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