When you start your own business, you commit to investing your time, talent and resources in the business to arrive succeed. You authorize a spending plan; you ask the bank, your charge card company, friends, family, employees, to endow the business to follow your business plan and implement your marketing plan. There’s more to it. You need to determine where you’ll be able to differentiate your company from the competition, so where should you invest the most resources? To garner the most flexibility, I suggest your investment priorities should be: Brand Capital, then Human Capital, followed by capital with Physical Capital at the bottom of the list.
Brand Capital: Invest the most in your market and marketing to them. Up front this could simply be centering on a small group of prospects. Do the economics to make them well satisfied customers. Such so, that they provide the testimonials or become the spokespersons for your future sales. Remember, the high value transfer of using relationships.
Human Capital: This is your team and their record adding up on board. Only hire stars, never mind what. Only employ experts in the key roles of your company. For other positions, search great talent you’ll be able to mold to your vision, and turn to meet the company’s needs.
Additionally, build a stellar Board of Advisors or directorate. A Board of Advisors usually will help you free of charge, whereas a Board of Directors is paid. The key is to engage thought leaders in your niche who become early adopters of your product or service and advocate for you to their significant networks.
Working Capital: Invest minimally here because there’s no added value to the company or the product. Tying up cash instead of using credit may actually slow your time to market. This could be a critical timing mistake if your competitor is racing you to market.
Physical Capital: Invest minimally here because bricks and mortar don’t sell product. Yes, you need a roof and windows that don’t leak (I’ve worked with many startups in the old mills where workstation layout was based on the leaks and drips.). You don’t need to be a miser. And you need the equipment, technologies and conveniences that will make everyone highly productive. Cost- effectiveness should be weighed here too.
Whenever you’re investing in your business, recognize that you cannot manage everything, but you’ll be able to manage the value equation of each investment. Make sure the value to your business is outstanding, so you’ll be able to win business with every sale.
Related Posts
Other Related Posts:
Invested Capital represents the total cash investment that shareholders and debtholders have made in a company. Invested capital = Operating Net Working Capital + Net PP&E .... (source)
Calculating invested capital is an important step in finding economic profit because a key idea underlying this metric is charging the company for its use of capital. .... (source)
Investment is the commitment of money or capital to purchase Investment in human capital includes costs of additional schooling or on-the-job training. .... (source)
(AP) President Barack Obama will call on Congress to pass new tax breaks that would allow businesses to write off 100 percent of their new capital investments .... (source)
London should be the clearinghouse as private investors provide at least half the funding needed to fight global warming in developing nations, U.K. Climate Change .... (source)
Two definitions of capital investment and how capital investment applies to small businesses..... (source)
Tags: Board of Advisors, Brand Capital, capital, Human Capital, Investment Capital, Physical Capital
Wonderful blog! I really love how it is easy on my eyes and the info is well written. I am wondering how I might be notified whenever a new post has been made. I have subscribed to your rss feed which should do the trick! Have a nice day!
Just read it and went gosh, I know why I was poor in the debate class. – It is impossible to experience one’s death objectively and still carry a tune. – Woody Allen Born 1935
Good blog! I really love how it’s simple on my eyes as well as the facts is well written. I am wondering how I could be notified whenever a new post has been made. I have subscribed to your rss feed which really should do the trick! Have a nice day!
Really informative blog post here my friend. I just wanted to comment & say keep up the quality work. I’ve bookmarked your blog just now and I’ll be back to read more in the future my friend! Also nice colors on the layout it goes well with the blog in my humble opinion
great article, i just finished bookmarking it for future reference. i’d like to check on new articles. how can i configure the rss reader again? thanks!
I saw this article bookmarked and very much liked what I read. I will certainly bookmark it too and also read the other posts tonight.