8 Simple Pieces Of Advice For First Time Buyers

When you’re looking to get on the property ladder, you’ll likely be feeling both excited and perhaps a little stressed. The process can take a little time, and arrive with both great successes and (sometimes) a few setbacks! The key is to get good and organized with a solid action plan. For some simple steps for your to-do-list, these eight should set you straight. 

1 . Determine your budget

A solid budget is crucial before you start shopping around as you need to determine exactly what you can afford and what is your ideal price range. Going in without a strict budget makes it difficult to assess whether you will be taking on a comfortable financial situation with your purchase. 

Apart from your monthly mortgage payments, there are others costs to be considered. You’ll also want to draw up a budget for all other expenses associated with buying your home. For example, think about your building's insurance and the costs of any furnishings you might need to begin with. There will also be the costs of the solicitor and the survey. Besides this, you’ll likely need to pay a removal company to move your belongings from a to b. 

2 . Seek mortgage advice

As a first time buyer, it’s a good idea to speak to a mortgage adviser who can help you to determine how much you will be able to borrow. A mortgage advisor will seek to gain a clear picture of any outstanding debts plus your income and your deposit. To get started on your own, try a free mortgage calculator to gauge an approximate figure to work with. 

3. Prep your documents

Before you take on the mortgage application process, you need to gather all of the appropriate documents that you’ll need. You’ll need detailed proof of your income, bills, outgoings, and your debts too. While you're at it, it’s a good idea to get your check your credit report to see that everything is in order and correct. Bad credit does not necessarily mean you’ll fail to get yourself a mortgage, but it’s a good idea to know where you stand anyway.

4. Research the neighborhood 

Perhaps it’s the case that you are considering a few different neighbourhoods? If so, it’s vital to spend enough time in each and every one. Check out the schools, if appropriate, and spend time in the areas experiencing the amenities and the atmosphere. Read about the neighborhood online—find out if it’s up and coming or slightly in decline. Look at the average prices so that you’ll know what to expect. Remember, you’re not just buying a home; your buying into the whole neighborhood as a community and a lifestyle. If it’s not a place that you like and feel at home, you won’t be able to fully appreciate the property. When finding a dream home is your new year’s resolution, you won’t want to choose the wrong neighborhood.

5. Start saving early

When you’re looking to buy, it’s a good idea to start saving as early as possible. You may not think you’re ready to buy yet, but time-flies and it’s preferable to put down a larger deposit. If you’re someone who finds it hard to save, try making use of a budgeting app to help you out. Mint is an excellent financial app that can track all of your accounts, spending, investments, and debts all in one place. Once you’ve provided Mint with all of your financial information, the app provides you with a workable budget for each category. 

When you can see a detailed picture of your spending, it’s easier to make adjustments and therefore-savings. The app also offers you a free look at your credit score (always handy for those looking to buy)! Ideally, you’ll want to save a down payment of at least 20%; however, lower down payments can still land you a favorable mortgage. 

6. Find the right realtor 

Finding the right realtor is crucial for first-time buyers. You’ll want to prioritize those with a wealth of experience and an excellent reputation. Don’t be tempted to go for the first or most convenient option you're presented with. Take your time, and shop around until you find the perfect match. It can be useful to look to friends and family in your local area for advice. Often, recent buyers may be able to offer advice on the best realtor options around. Failing this, see if you can find any reviews online about the realtors who you are considering. When you meet with each one, be sure to ask about their successes and experience—to get a clear idea. 

7. List your must-haves

Before you start looking for homes, you’ll need to list your must-haves; the non negotiable things that you require in a home. Perhaps the number of bedrooms is particularly important?

Is it essential that you have a garden? It could be that you want an energy-efficient home or a property within walking distance of a train station? Whatever your requirements are, it’s vital to make a detailed list of what you need and what you are looking for before you start the process. Going in with a clear idea of what you want makes the procedure much less stressful!

8. Remain patient

Lastly, patience is really important when it comes to buying a property. It can take a little time to get through each stage of the procedure. What’s more, it’s normal to get beaten on offers or find places that just aren’t what you are looking for. Try to enjoy the process and see the wait as a positive in finding a property that’s just right.

First-time buyers looking for further advice would be well advised to look to sites like Altrua Financial. Here you’ll find some excellent info and services for first-time buyer mortgages. It’s important to find the right kind of company who can talk you through the fine print and who are committed to offering you the lowest rate that they can.

Grow Your Business with These Four Steps

There is little doubt that your top priority as a businessperson should be to help your company achieve sustained and long-term growth. With growth being a sure sign of financial health and strategic success, there’s so much value in finding new and exciting ways to grow your business, from your knowledge of the market and your tapping into new customers, to the investment of your resources in a whole new branch of work. Here, you’ll find four steps to grow your business, from the planning through to the execution.

Investment Funding

These investments—in marketing, auditing, accounting, and providing for higher volumes of sales – require funding. Often, that means either approaching a funding body for an investment in your business or needing to open a line of credit with a reputable business loan provider, like biz2credit.com. With the capital you need to make your investments in growth a success, you’ll be able to strategize and invest freely, without budget constraints imposed by the relative size of your business as it attempts to establish itself in the market.

Map Out Your Space

It’s important to be aware of the business space in which you operate. This means taking account of your competitors, taking account of your customers, and taking account of the business and consumer trends that you see around you, whether they exist in your own particular market or not. Without this important base work, you won’t have an informed foundation from which to plan your growth strategy. So, try to answer the following questions:

·       Who is my target customer?

·       Why are they my target customers?

·       Where can I find this target customer?

·       How can I target this customer?

Now, it’s time to look at how you’ll put the answers to these questions to use.

Marketing and Sales

So, you’ve decided that you have an ideal customer—one that you think is most likely to trade with you—and you’ve strategized some ways in which to access them with sales and marketing techniques. Now, it’s time to direct your marketing and sales energy to find these customers and target them with advertising and marketing materials that’ll lead them gently back onto your website, from where they’ll make purchases and boost your profits. Engage with external, outsourced marketing companies for help in getting your message across to your target consumers.

 Consolidation

If you grow, you really do not want to shrink back. That can be disastrous for your business, as when you scale too quickly and then fail to maintain the extra business you were anticipating, your whole business, set up for higher volumes of sales, will start to lumber towards debt and high costs with low profits. As such, every time you grow your business, you need to work on a period of consolidation in order to keep the boat steady and ensure that the extra market share you’ve captured is there to stay for your long-term financial future.

These four steps will guide you through the planning and execution of your strategies for your business’ growth in 2020 and beyond.

Most Virgin Entrepreneurs Need Help In These Areas

It can be a daunting experience setting up your very first business. It is also likely to be one of the most exciting times of your life. There is so much that you will be focused on and trying to get right, and however you approach it, you are bound to need a little help here and there. There is nothing wrong with that. After all, it is true for everyone, and so there’s no shame in it. But let’s look now at some of the areas that most first-time entrepreneurs need help in, to give you some idea of where you are.

Pic Credit - CCO License

IT

It is often the case that you will need help where you are weak. Most people, for instance, are not well-versed in all things technological, and so this is one area where they generally need a little help to get things going. If you think you might need help, you will want to think about going to the right people to make sure you get it right. Using a decent managed services team like www.thinktechnologiesgroup.com is often the best way to go - that way, you can just leave it all in their hands.

Marketing

The world of marketing is one that changes profoundly with each passing season, let alone with years. It is a full-time occupation just keeping up with the changes in the cultural winds, so it’s hardly surprising that most business owners don’t have the time to look into this stuff themselves. See www.mplans.com/articles/ for advice on marketing to get you started.

If you are going to try and run your business as successful as possible, then you need to make sure that you are getting some help with your marketing. With that kind of help onboard, you will be able to lead your business to the kind of success that you really want for it

Pic Credit - CCO License

Sales

Some people seem to be born natural salespeople. If you happen to be someone who can sell anything to anyone, then you will be able to use those skills in your new business - although even then you might want to find someone to help you. But most people are not such individuals, and they will need to find true salespeople to help them get their sales off the ground and their products shifted. It’s definitely wise to look out for such people early on so that you can have a much better chance of selling as many products as possible as soon as possible.

Office Design

If you have ever helped to design an office before, you will know that there are so many things involved that you need to consider. In truth, this too is something that is best left to the professionals, as they are much more likely to be able to do your team justice. You need a working space that your team can enjoy, and that means having a keen sense of what works and what doesn’t. With this kind of help, your business is going to be much better off indeed.

Simple Strategies To Boost Your Chances Of Business Success

No one goes into business intending to be unsuccessful. However, many people do experience times when profit is so lean that they almost go under. Of course, any successful business person will aim to avoid such failures and maximize their chance for success. A topic you can get some advice on in the post below.

Hire the right people 

One way to maximize your chances for business success is to make sure that you hire the right people for the job. Now, this is something that can be considerably more complicated than most people first think. 

In fact, you have to satisfy the legal requirements such as permits to work. You will also need to make sure that the people you choose to interview have the right skills and attitude. 

Additionally, knowing about their personality and how they can work can be very useful too. The reason being that this can help you assign tasks and put them in the right teams. It can even help you to manage them in the way that most effectively promotes your business and will make it a success. 

Have a robust plan 

Directionless businesses rarely succeed. In fact, if you want to maximize your opportunity for success, you will need a clear and robust business plan. 

With that in mind, be sure that you have contingency plans in place in case any part of your original aims do not work out. Then you can be sure to progress your business, even if things don't always go your way. A situation that is more than common in the business world, and which you will need to adapt to if you are to succeed. 

Invest in yourself as a leader 

For your business to be as successful as you would like, you absolutely need to be an effective leader. Happily, this is a skill that you can develop just like any other. In fact, many leaders build up their capabilities by starting in mid-management positions and gaining experience there. 

Additionally, some choose to do things like this online MBA degree program while working. This being an opportunity that allows them to work on their business skills in a community of peers. Something that can help them become a very effective leader indeed. 

Diversify your income streams

You may have heard the phrase 'putting all your eggs in one basket' before. Of course, it relates to banking your chances of success on one single thing. Something that in business can be a terrible idea indeed. 

In fact, if you want to boost the chances of your business succeeding, you need to diversify your income streams. That is you need to have additional ways of creating revenue than just your primary purpose.

The advantage of this being that even if the market does fail, or you encounter unexpected issues, you will still have other streams of income flowing in. Something that can help to continue to make your business viable and boost its opportunity for success in the long term. 

Qualities And Characteristics You Need For Success - And How To Acquire Them

Photo credit: https://unsplash.com/photos/_6HzPU9Hyfg

Success is a wonderful word that we all want to be associated with in one way or another. When you hear the word, you immediately visualize good things. It can put you in a better mood instantly, just by the power of imagination. 

But who’s to say what success actually is? How is it measured? Sure, a lot of people picture a successful person as someone with too much money and all of the thriving business in the world. If that’s how you solely picture success, then good for you – you have high standards, and you’ll probably push yourself to reach them. Not everyone will reach the pinnacle, however, because it’s a place that’s reserved only for a select few. 

Success is defined as the accomplishment of an aim or purpose, and that’s how most of us view it, too. Whether it’s perceived as something small or big, it’s that feeling of achievement. In order for anyone to find success in anything, they need to have something about them. Nothing ever falls comfortably on our laps (well, perhaps they do for some people). 

Whether you’re tackling something that nobody has ever managed to tackle before, whether you’re trying to reach a personal milestone, or whether you’re trying to overcome a personal hurdle, you’ll need to have certain qualities. You don’t have to be Mr or Mrs Perfect and be flawless at every task you face, but it helps to have the skills to accompany your mission.

If you’re interested, let’s go through a bunch of different skills, traits and characteristics that are possessed by successful people.      

Organization 

In order to reach a good level in terms of your work or your overall standard of doing things, you need to have a degree of organization about you. Nobody ever got very far by stumbling along and hoping for the best. Being organized means having everything together – and that means everything. From your general plans and schedule to the bits and pieces that are assembled on your desk. People that manage to get lots done often have a working plan ahead of them. Hopping from task to task on a whim might sound like an easier idea, but it’ll only get you so far.  

Perpetual Motivation 

Motivation is something we all need just to function on a daily basis. Without it, we’d all just be sat around wondering what the point is. If you want to reach your goal and reap the rewards, you’ll need to be mentally switched on at all times. The way we get up in the morning is all based on how motivated we are to get the jobs done. 

When you’re struggling for motivation, it can be quite hard to pull it out of seemingly nowhere. You can, however, train your mind and get the motivation you need. You can watch videos, listen to podcasts and read up on the stories behind successful people. The law of attraction is also a popular method of getting what you want and being driven to do so.   

Bravery

We’re not talking about immense levels of fearlessness in terms of risking your life, instead, having the courage to commit to something. When you first set out to do something, you’re free to drop out at any time and continue on with whatever tame plans you had before. Heading in a new direction or pushing yourself to do something higher-octane takes some boldness. This doesn’t always have to be regarding something that could be detrimental or that stresses you out massively, though. There’s a fine line between bravery and stupidity!

A Sociable Personality

When you’re a person that people can bounce off of comfortable, you’re going to be in with a bigger chance of getting what you want in life. That’s just a fact. Popular and well-liked figures often get more out of life than reclusive types. As a more bubbly and sociable person, you’ll get to know more and more people. Thus, more opportunities can be found, and more networking can be done. Furthermore, when you’re good with people, you’ll develop a good reputation amongst them, and they’ll be more inclined to include you in things. 

Constant communication will mean you are subconsciously practicing. You won’t notice it as it’s happening, but your brain will constantly be taking in words, phrases, behaviours and mannerisms. These learned aspects of communication could turn you into an impeccable leader someday as leadership is more than just being the face of a group. Being a leader requires many skills, and being able to talk with everyone properly is a big one.  

A Constant Willingness To Learn

It’s very easy to slow down your pursuit of knowledge when you feel like you’ve reached certain levels. It’s understandable because you’ve gotten to the position you’ve needed. The learning was a necessary piece of the puzzle on this particular journey. If you want to constantly improve and build on any success you’ve already found, then you should always remain a keen student. It doesn’t matter whether you’re an expert in a particular field; you’ll never know it all. You could spearhead a big firm, like Mark Zuckerberg, Cynthia Telles, Jeff Bezos, and many others – it doesn’t give you the right to stop studying. Approach everything and everyone with the attitude of an amateur – you’ll be benefited hugely.  

Honesty 

This is split into two ideas: being honest with yourself and being honest with others. If you can’t look at yourself and honestly evaluate where you are, then you might not make progress that you want. Often, when people either lie to themselves or continue wishing the truth was something else, they operate around something that doesn’t exist and any issues they had become exacerbated.

Being open and honest with others is the second point here. Say you’re a boss and you have people working under you. When you need to have a chat with them, do you want to get the best results for both yourself and them? Sure, you do. The way you do that is by being completely sincere and frank. When you lie to people, regardless of the situation, it always comes back to bite you in the backside. Even if the truth is sore, you have to speak it. 

Self-Belief 

While it’s not totally necessary to have it in droves, it’s quite important that you believe in your own ability to do things. Some are born with loads of it, so they don’t need to worry about backing themselves. For those who are a little short of confidence, however, it can be worked on. Constantly studying, getting qualifications, experience – these will all boost your self-belief in a lot of subjects. 

Patience

Good things come to those who wait is how the old adage goes. And when you want something good, it’s going to take a while to reach you. Sure, some lucky souls hit the bigtime overnight, but those are one in a million instances. You need to have patience because, without it, you could give up way too soon.

You may feel as though you’re wasting your time when you’re just around the corner from something special. Patience is also a wonderful trait possessed by leaders in terms of teaching, passing down advice and working together with contacts. 

A Positive Mental Attitude

Finally, and this is often smirked at by many, but people at the height of success view life with a glass half full kind of attitude. There’s always a brighter side to any outcome. There’s always an opportunity to capitalize on. If you’re moping around with a negative mindset all of the time, you’re going to get nowhere fast.

Please note, this article contains affiliate links.

So You Want To Scale Your Blog Biz: What You Need To Know

By Kayleigh Alexander

Despite having been around since the very first days of the internet, blogging still remains very much a staple of the digital world.

Modern content monetization methods were all brought into existence by bloggers. And though the level of competition today is overwhelmingly tougher to contend with than it was a decade ago (or even earlier), the big improvements in technology accessibility have ensured that turning blogging into a source of income is still completely viable. 

But there’s a big difference between picking up some small amounts of affiliate commission, and making enough money from your blog that it can conceivably become your primary revenue source.

Regardless of your current level, scaling a business is a real challenge. It’s essential that you do your research first — so before you try to scale your blog, here’s what you need to know.

Automation tools are essential

Blogs almost always start out as solo operations, and there’s a decent chance that you’re in that boat right now.

Handling a business solo has its pros and cons: having complete control over everything that happens is a big positive, but it makes you the bottleneck. Only through your work can anything happen — the moment you can’t keep up with demand, your business will be left in limbo. This is why you need to free up your schedule as much as possible.

If you’re serious about scaling, you’re going to have to embrace automation. Luckily, there are many automation options available for bloggers, and it’s usually easy, free and fun.

Think about all the tasks you do for your blog on a frequent (or even daily) basis. Which parts need your creative input, and which are repetitive processes that require little thought? The latter are going to cause you trouble the larger your business gets, so it’s best to find ways around them right away.

For example, take social media and email marketing. If you want to scale your blog biz, you will also need to scale your promotion.

This is where automation will be invaluable. There’s no shortage of great email automation tools, and plenty of advanced social media tools for communicating across multiple platforms.

Think carefully about everything that goes into your average day, and hunt down tools for saving time and making your life easier.

Take shortcuts with your visuals

Your visual content on your blog is as important as your written content — it’s what’s going to grab people and reel them in, illustrate your points, and inject some vibrancy to your posts. Every blog post needs at least one image to accompany it.

And although it would be great to use original images taken with an expensive camera and edited on PhotoShop until they’re perfect, this isn’t always (or usually) possible. Time and money get in the way — especially if you’re trying to scale your blog biz.  

Thankfully, there are ways to get around this. The creation of free stock image sites — which offer millions of high-resolution, royalty-free images — is the blogger’s savior when it comes to scaling a business. It’s an easy way to scale up, offering you countless images to add to blog posts and social media promotion without the effort or money previously needed.  

Plus, if you want to further reduce the time you spend hunting down stock images, you can try a stock image plugin (if your blog runs on WordPress) to choose an appropriate image without even needing to leave the post window.

You may need help with content production

No matter how prolific a blogger you may be, and how relentlessly you can type at pace, it’s super unlikely that you’ll be able to hugely scale your content production process without suffering from burnout. Whether this is creative (writer’s block is the worst) or physical (RSI is a real concern for bloggers), or both, you definitely want to avoid this.  

That’s why you’ll need some kind of human assistance at some point. 

You may not like the idea of farming out your content to other writers (especially if your blog is your baby), but you don’t actually need to do exactly that to speed up your production. There are other elements you can hand out — like research, graphic design, networking, or even editing (you can write the rough draft, then pass it to someone else to be cleaned up, or vice versa).

How you go about it is totally up to you. You can hire a full-time employee, get a part-time employee, or hire a freelancer using a freelance website like Fiverr or Upwork (there are many different freelance sites that you can choose from).

The point is that you have options. And, if you feel that you’re biting off more than you can chew when it comes to scaling, you can find ways to pick up the pace without completely sacrificing your creative integrity.

Reworkable material is invaluable

Getting the most value you possibly can from each piece of content becomes more important the more you scale.

This is because quality demands get much higher, requiring you to invest more time, effort and resources into everything you do. Uploading a blog post that ultimately gets a couple of thousand views might be solid for an amateur operation, but not for a business.

One of the best ways to increase the value you receive from a piece of content is to make it reworkable.

What we mean by this is that you can create a substantial piece of content that can then be adapted for various distinct platforms. For instance, writing a post that can easily become a script for a tutorial video, or be turned into a podcast, or cut down to an infographic. There are lots of ways that you can repurpose a blog post. 

It’ll take longer to create a comprehensive piece of source content, but that investment will pay off in the long run, allowing you to create 4-5 unique pieces of content that will attract different (and bigger) audiences. This will also allow you to showcase your expertise in specific areas, which makes you look great if you’re trying to establish yourself as a thought leader in your niche.

A mix of evergreen and seasonal content is ideal

Broadly speaking, there are two types of digital content: evergreen, and seasonal.

Evergreen content covers topics that are always relevant. For example, this piece is (in principle) evergreen, because people seek to grow their blog businesses all throughout the year.

 Then there’s seasonal content, which covers topics that are only relevant either temporarily or at certain times of the year — topics like recent news stories, or public holidays, or (as the name suggests) the changing seasons. 

Each type of content has its advantages. Evergreen content is great for building up search rankings over time, because it’s always valuable to someone. Seasonal content is perfect for attracting maximum attention when deployed at the right time.

That’s why it’s good to aim for a decent split between the two for your scaled-up content — that way, you’ll cover your bases.

You should monetize everything you can

Unless you happen to be super-rich and you’re scaling up your blog business just to have something to do, making money is going to be a primary concern — perhaps the primary concern — of your blog.  

To make as much money as possible, you’ll want to monetize as much as you can without damaging your content and turning your blog into a walking, talking advert for someone else’s business.  

Here are four tips for achieving this:

• Sign up to all relevant affiliate schemes. There are plenty of affiliate programs out there, with lots aimed squarely at bloggers. When you link to particular products (many of which you might link to anyway), you can get a commission for each person who clicks that link and places an order.

• Clearly state your willingness to do business. Many bloggers are interested in finding ways to monetize what they do, but not all of them are. If someone arrives on your site and decides that they’d like to work with you, you’ll need some copy in an obvious place to explain that you do work with brands and you’re willing to listen to ideas and form partnerships.

• Run ads on your blog. We maybe wouldn’t advise using something like Google’s AdSense, because even a small number of automatically-loaded ads can really dissuade someone from following your website, but you can easily run manual ads. Let people know that you’ll consider ads, then figure things out as you go.

• Start selling branded products. It’s great to have a large audience and build sponsorship deals with big companies, but making your brand marketable will really expand your range of options. Think about branding merchandise: print-on-demand shirt services are very convenient and easy to use.

• Reach out to prospective partners. It’s always good to be proactive instead of waiting for potential income sources to find you. If you think you have an audience that would be valuable for a particular brand, send them an email. Realistically, the worst outcome is that they turn you down, and you try again with someone else.

Lastly, and maybe most importantly for your sanity, you need to know that it’s going to take time to get where you want to go.

Blogging is a slow and labored business, with audiences typically building up over years. While you can definitely get some fast results, there isn’t really any way to take a shortcut to lasting long-term success.

So be patient with your scaling, stick to your long-term plan, and don’t make any snap decisions. Good luck!

7 Easy Business Concepts Every Founder Needs To Know

By Kayleigh Alexander

Over 500,000 new businesses are set up every month, but only half manage to get to the five year mark, a statistic that can be a little alarming if you’re thinking of founding one of your own. 

The infancy period of any start-up is volatile, and it can be especially difficult for entrepreneurs who don’t have any previous business experience.

Having a grip on some basic business concepts will give you some of the tools you need to successfully establish your brand and then keep it growing. Don’t blindly fight against established business norms — learn them, boss them, and then choose to subvert them if you want.

Here are seven easy business concepts that you need to know to help you realize your wildest creative business dreams.

Competitive advantage 

One of the main challenges for young businesses is finding a way to achieve and maintain a competitive advantage over other brands in a given market.

Put simply, a competitive advantage is an advantage you have over your competitors.  This is achieved by giving your customers greater value — either by offering lower prices or justifying higher prices by providing a better product or service.  

In his 1985 book ‘Competitive Advantage’, Harvard Business School professor Michael Porter outlined three core ways that businesses can achieve a sustainable competitive advantage:

●      Cost leadership means providing reasonable value at a lower price, which can be done by improving operational efficiency. Basically doing more with less — gig economy businesses are great for this

●      Differentiation means delivering greater benefits to the customer than your competitors can. This can typically be achieved through having an innovative product, a very high-quality product, or delivering a similar product as your competitors, but offering exceptional customer service. Differentiation is often how creative businesses like yours stand out

●      Focus means that the company’s founders understand and serve their target market better than its competitors. The key to focusing is to choose one specific target market, often a niche that bigger companies don’t serve, and then concentrating hard on nailing it.

Supply and Demand 

The concept of supply and demand is directly relevant to any company competing in the marketplace, regardless of its size. Supply and demand mean that a market will respond to changes in demand and supply to overcome surplus and shortages and therefore maintain an ‘equilibrium price’. For example, a shortage of gold leads to a higher price, because, as demand for gold increases, the upward pressure on prices would naturally prevent a shortage.

Source: The Dasinger Daily

Understanding the specific supply and demand issues affecting both the sales and the purchases that your business makes will enable you to make more informed decisions.

Return on Investment

Return on Investment (ROI) is the financial benefit that is received from an investment, or, put more simply, a measure of what you get back compared to what you put in. For example, say you spent $1000 per month on Google Adwords, and your business made $2000 as a direct result of the ads, your ROI would be the difference. ROI is usually measured as a ratio, which in this case would be 2:1, because for every $1 you spend, you get $2 back.

Calculating ROI will help you to track what’s working and what isn’t working for your business. If your ads aren’t generating a profit, you will know that you need to make changes to them, or drop them altogether in favor of another form of marketing. 

Fixed and Variable Costs

When you start a business, your costs come in two forms: fixed and variable. Fixed costs don’t change when your sales volume changes, but variable costs do. Examples of fixed costs include the rent you pay for the space that your company uses, such as an office or storage facility, insurance, marketing and management salaries. Examples of variable costs are material and labor, the costs of which go up and down depending on sales. 

Source: PrepLounge

Understanding which costs are fixed and which are variable will enable you to budget and plan accordingly, and help you to identify what is a profitable price level for your products or services. If you suddenly lost your biggest customer account and therefore 25% of your sales, you’d still need to cover your fixed costs to keep your company running; figuring out these costs could be crucial to keeping your company alive.

Customer Lifetime Value

Customer Lifetime Value (CLV) is the total worth of a customer to a business over the entirety of their relationship. It’s important to your business because it costs less to keep existing customers than it does to acquire new ones. According to the book Marketing Metrics, “businesses have a 60-70% chance of selling to an existing customer, whilst the probability of selling to a new customer is only 5% to 20%”. Increasing the value of your existing customers will really help to drive growth. 

However, measuring CLV isn’t easy, with only 42% of companies feeling able to do it, and citing poor systems, lack of coherent marketing and lack of integration as the reasons why.

If big, established businesses struggle to measure CLV, then new and small businesses are likely to find it hard to make accurate measurements, but you can make a start with this simple formula: customer revenue minus the cost to acquire and serve the customer. If you are prepared to really drill down into the concept, there are more complex calculations that will help you get a more accurate result.

Customer Acquisition Cost 

Customer Acquisition Cost (CAC) means the price that your business pays to acquire a new customer. It can be worked out by dividing the total costs associated with acquisition by total new customers, within a specific time period. For example, if you spend $500 on marketing in one month and acquire 500 customers, then your CAC is $1. Web-based companies can roll out highly targeted campaigns and track customers from leads to conversions, making their CAC highly accurate. 

If you’ve just started a business, acquiring customers is crucial to making sure it is a success, but if you spend too much money on acquiring customers, then you won’t be able to pay your other costs and keep your business afloat. CAC is directly relevant to CLV, and combining the two will allow you to calculate what is the true value of a customer to your business.

Minimum Viable Product 

Minimum Viable Product (MVP) is a development technique where a new product is introduced to the market with basic features, which will capture the attention of early adopters. Companies such as Uber, Dropbox, and Airbnb all started as MVPs and achieved very rapid growth. An MVP is a bare-bones version of a product that includes a minimum of features and directly addresses the core problem it is trying to solve. Once the initial product is successful, more features can be added.

Source: Cheesecake Labs

An MVP allows you to release your product to market in the shortest possible time, reduce start-up costs and test demand before spending money adding all the bells and whistles.

An easy creative product-based MVP would be a print-on-demand business with low overheads. Simply set up shop, hook up with an app like Printful, and go out looking for ways to make your first sale. Using print-on-demand methods means you can keep costs of production down while you test your designs and brand out with your target market. 

On the service side, you might be looking to start a consultancy coaching business for creative entrepreneurs. Before going all-out, test the waters with a series of blogs, a webinar, or a training course (Thinkific is good for this) to gauge whether you have a viable market and compelling message. You may find that you need to adapt your messaging.

You can work directly with users to analyze behaviors and get feedback, allowing you to develop your product in ways that you know customers will like. Developing your business in this way can also avoid large capital losses, therefore attracting potential investors because it is a low-risk venture.

There’s a lot to learn when setting up a new business and there is no guarantee of success, but educating yourself about some of the basic principles will stack the odds in your favor. A firm grounding in everything from basic economic theory such as supply and demand to sophisticated development techniques like MVP will help you found a business that is both profitable and sustainable.

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Kayleigh Alexandra is a content writer for Micro Startups — a site dedicated to giving through growth hacking and shining a light on innovative startups. Visit the blog for your latest dose of startup, entrepreneur, and charity insights from top experts around the world. Follow us on Twitter @getmicrostarted.