Bizzalley's Business Q&A

Q)Do I need to make my staff sign a Non-Disclosure Agreement before hiring them?

Bizzalley's Answer-While NDAs between employer and employees are a normal part of most businesses, creating one or your business depends on the type of business you want to run. Does your business have trade secrets or confidential information like client and customer information, products designs, prototypes that you’re trying to protect? If the answer is yes, then, by all means, create one for any potential employee to sign before you hire them. If the answer is no and your business is a regular one that doesn’t involve so much secrecy, then there’s no need for one. Making them sign one may signal distrust between you and them and could potentially ward of talented individuals that you need.

Q)Do I hire in-house staff or short-term contractors?

Bizzalley's Answer-There is various pros and cons associated with each and it all depends on the type/nature of your business and how much money you have to spend. Hiring in-house staff means you have complete control over their work during work hours and how to direct them to accomplish any task assigned to them. On the other hand, employees come with a ton of laws and regulations. These include payment of wages, hazard pay and overtime pay, taxes and union regulations. While for contractors, the opposite is the case; you can impose a deadline and work product on them but you can’t direct them on how to accomplish the task. For a small business, a contractor base of 30% is a suitable number to keep a budget for hiring contractors as needed.

Q)How easy is it to get venture capital financing for my business?

Bizzalley's Answer-Getting venture capital financing for your business is extremely difficult, especially for a start-up. Focus more on having a good product, gaining momentum, having a great team, and growing before you then consider getting venture capital financing. You can get financing from other sources like bank loans, family, friends or angel investors.

Q)At what point do I go public – IPO?

Bizzalley's Answer-Most start-ups and businesses after hitting substantial profits level make the mistake of launching an IPO at the wrong time and ruining themselves. There are key questions to consider before taking your business public:

• Healthy growth: Is your business profitable and does it have a healthy growth pattern in terms of sales? Is the growth sustainable before and after the IPO? If yes, then you’re on your way to making an IPO worthwhile.
• Vulnerability Assessments: Does your business have single points of failure like a dominant supplier or distributor, a massive competitor or is it beholden to a single technology? Public investors don’t like these type of risks, so before considering an IPO, make sure these single points of failure are eliminated.
• Do you have processes built into your business plan that can account for possible tumultuous changes while handling the IPO?

Q)Is it better to lease or buy equipment?

Bizzalley's Answer-Leasing equipment means your cash is not tied up or gone permanently but it also means the equipment has no resale value to you as you do not own it. Buying the equipment means you own it and you can sell it anytime for a profit or lease it out. The only disadvantage to this is that other costs associated with owning the equipment such as insurance costs and maintenance costs come into play. Weigh both options carefully and carry out a cost analysis and this will help you to make the best decision for your business.

Q)How do I set prices for my products?

Bizzalley's Answer-The price for a product is determined by three (3) production costs:

• Raw Materials
• Labor
•  Overhead (taxes, insurance and other operational costs of your business associated with the product).

After the above costs are determined, you also put into consideration the desired profit. For example, if the production costs are $50 and your desired profit is $25, then your product will cost $75 in total. Since the pricing of products is complicated and your product must be profitable and competitive, it is advised to seek expert help to assist you.

Q)How should I divide equity between me and my partners?

Bizzalley's Answer-Any divide in equity should take account of the following:

•  The amount of time to be committed to the business by the partners.
• The relative value of the contributions of the partners.
• Vesting dependent on continued participation in the business by the partners (you can’t give a substantial share to someone who will leave after a few months).
• Whether the partners contributed cash or are still contributing cash to capital and investment.

All these must be discussed and agreed upon at the start of the business to prevent issues from arising later on. If you’re the original founder and brain behind the business, you can make an argument of you deserving to own a majority.

Q)How do I increase traffic to my e-commerce site?

Bizzalley's Answer-A common problem associated with having an e-commerce site, especially start-ups is how to

generate traffic. Some of the ways to increase traffic are:

• Create an amazing social media campaign across the social media networks of your choice. This attracts visitors from these sites and drives them to your own site and these visitors can change from visitors to customers.
• Engage in pay-per-click advertising by bidding on keywords that are relevant to your ads and business site, so whenever those keywords are entered in a search query, your e-commerce site is one of the top search results. Google AdWords is a suitable program to achieve this.
• The most important thing is having a great site that is user and SEO friendly, optimized for all screens and has great content and products.

Q)How do I overcome supply shortfalls for my business?

Bizzalley's Answer-If you’re facing challenges in getting the supply of raw materials to make your products, then this is bad for your bottom line and business. If you have a dominant supplier, then you might need to change your approach and go out and find others so that you have multiple suppliers of those raw materials. You must ensure that the new ones supply materials of the same quality and standard as your dominant supplier.

Q)Do I need to register my business in directories?

Bizzalley's Answer-If you want your business to be easily found online, the best way to do that is by registering your business on online directories and connecting your business site to it. The gains of doing this are tremendous:

• Easy to set up.
• Little to no cost to implement.
• Your business gains immediate visibility and awareness.
•  Helps improve SEO rankings of your site by being listed on an established directory.
• Helps build credibility for your business.

You can list your business on Search Engine directories like Google My Business or Review- Centric directories like Yelp if your business is one that requires customer reviews to drive business.