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Tag: Leadership

How To Get The Key Metrics You Need To Achieve Desired Results

Posted on by harborcapitalgroupinc

This article will cover an introduction to KPI (Key Performance Indicators) if OKR (Objective Key Results) is all about defining goals and tracking actual progress towards achievement at any given time. Key Performance Indicators (KPI)  measure the contributing factors through which achievements are attained. In other words, KPI includes the key; leading factors deemed necessary to achieve a specific goal. Although the scope of KPI is not as broad as OKR as far as measuring success is concerned, the KPI gives more detailed information about each specific factor measured.

For example, if the objective is to increase product output by 20% and one of the key results is an improvement of resource utilization (efficiency). Then KPI may include labor costs incurred in the manufacturing process, energy usage, production time quality, rejection rate, equipment downtime, maintenance cost, and all variables that relate to achieving the desired objective. KPI creates a rational basis to help the company shift focus strategically while avoiding operational disruption. The results of the analysis will be used in the decision-making process.

There are two types of KPIs:

Lagging Indicators: the inductors that measure results of any particular company activity, such as revenue growth and quarterly profit. They are called “lagging indicators” because they track results that have already occurred.

Leading Indicators: the indicators or variables to predict and influence future results. These are often more difficult to set up due to changes in external factors (that the company cannot control), such as consumer trends, investments, and competitors. However, unexpected changes do not always bring negative impacts; for example, additional investment in manufacturing equipment can increase output.

Although each industry has different KPIs to measure, the indicators or variables have the same purpose of providing practical guides to adapt and change under internal and exter\nal circumstances. Also, in most companies, proper business strategies are often based on creating the right balance between lagging and leading indicators.

Why use KPI?

Once the goals are defined, the company also needs to determine all variables that contribute to achievements. Without key performance indicators, it would be challenging for a company to evaluate performance in a meaningful way and make operational changes to address issues. KPI also helps employees stay focused on the most critical tasks leading to the competition of the objective.  

KPI gives a comprehensive understanding of the company’s performance at any moment and identifies possible changes in operations. Without knowing which parts of a strategy are not working, there is no way to design a good action plan to overcome the problem. By examining the analytical data of the KPI, managers can tell whether company performance is improving or declining. Then determine a practical approach to either to sustain improvements or deal with the decline in performance.

Benefits of using KPI

A company with well-thought-out KPIs has the advantage of performance visibility across business operations. The data-driven information acquired from analysis allows for a practical management approach to keep the company moving forward despite difficult challenges. More benefits of using KPIs are as follows:

Proactive business management: armed with fact-based information with KPIs, a company becomes more active in managing operations and discovering opportunities in the market.

Efficiency: KPI provides a tool for the company to identify any inefficiency within the business operation. Addressing the problem will eliminate the waste of resources.

Accountability: KPIs will show whether specific processes, individuals, or teams in charge of the operations are under or over performing. Allocating more resources or reinforcing the workforce may help improve the indicator and, therefore, overall performance.

Motivational values: even if the company is struggling, one positive metric shown in KPI can be a great motivation for everyone to keep improving and overcome difficulties.

In general, KPIs tell whether your company is moving forward, backward, or not moving toward progress at all. Proper implementation of KPIs is important in every decision-making process because they help identify issues and set the foundations to plan for sustainable growth in a more efficient way.

Different Ways To Raise Funds For Your Startup

Posted on by harborcapitalgroupinc

 The essential information you need to plan your investment raising challenge. Start early, takes lots of time — 3-12 months depending on the type of funding seeking. It will be a challenge, but the rewards can be significant.

You have to ask yourself if you are ready to raise funds

  1. What do you need the money for research, product development, employees, marketing, etc.?
  2. How much money will you need and how long will it last?
  3. Are you looking for loans or selling equity to raise funds?
  4. How long will I have to repay the loans or when will equity investors want to get their return?
  5. What does my credit situation look like (personal and business)?

Regardless of how you plan to raise capital, make a list of potential investors on day one, and keep adding to that list every day (angel investors, venture capital investors, or potential crowdfunding investors.

Here are some of the ways you can raise funds: We will primarily focus on Crowdfunding, Angel Investors, and Venture Capital Firms. Here are some of the ways you can raise funds:

Bootstrap your development. Are you able to use personal savings and loans?

Family and Friends. Are they able to help in the short-term or long-term?

Vendor Credit from suppliers. If you are working with suppliers, you may be able to get an extended payment option.

Business Credit Cards. A good source when you have to buy things, but it can get expensive if you are getting cash advances.

Invoice Financing. You receive money based on your invoices and business activity and repay the loans when your clients pay you. The rates can be very high.

Equipment Financing. If you are buying equipment, you could get a loan based on the value of the material often fro the equipment company itself.

Business Line of Credit. This gives you a way to pay for items as you need them and pay back the money when you want. This can be less expensive than Business Credit Card programs.

SBA (SmallBusiness Association) loans. They have small microloans available by matching you up with a bank. They also have more jumbo loans you can apply for but the time required to get final approval can be very long.

Incubator and Accelerator Programs usually conduct several programs a year. You apply to be a participant in one of their 12-week programs. They match you up with mentors to help you with the information you will need to develop your product and help you prepare for a presentation to investors. They often give the participants a small amount of money to work with during the program, and they generally get about 6% of the startup’s equity, but there are exceptions.

Crowdfunding. There are two types — one where you raise money by basically “pre-selling your product” to the crowd. These are platforms like Indiegogo and Kickstarter. People who are interested in the product or service can “buy” the products or services and get a promised delivery date. The buyer will also be one of the first people to get the product.

The second type of crowdfunding is when you raise money through debt or equity or a combination of both. Debt funding pays a dividend, or the debt can be convertible into stock based on a defined event. Equity funding is for shares of stock and ownership in the company. You do not have to be an accredited investor to this debt or equity. However, the SEC limits the amount you can buy based on your income.

Angel Investors are accredited investors (have a salary of $200,000 per year or 1 million dollars of assets not counting their home.) They are often corporate executives and often former founders themselves. They are generally interested in the product or industry, and often want to be involved in the company in some way, Investments typically range from $10,000 to $100,000 per investor. (and angel investment clubs which are formal groups with rules and syndicates which are often Special Purpose legal entities to invest in a specific investment )

Angels are all accredited investors (have a salary of $200,000 per year or 1 million dollars of assets not counting their home.) They are often corporate executives and often former founders themselves. They are generally interested in the product and industry, and ofter want to be involved in the company in some way, Investments typically range from $10,000 to $100,000 per investor.

Venture Capital Firms find and invest in high-growth companies through one of their investment funds. The money for the funds, in addition to the Venture Firms’ own funds, also includes funds from other accredited investors, funds, pension plans, and corporations. They are looking for investments that will pay them a return in 4-7 years. The amount they will invest can be very significant, and will generally be investors for additional capital raising rounds. Due diligence is very extensive, and the time required to receive the funds could take months or up to a year. They will also want a significant amount of stock (in various forms) and a seat on the Board of directors.

We will get into more depth on these fundraising methods in future articles.

Do you want to make the right decision or be right? 

Posted on by harborcapitalgroupinc

 

When you are working in a startup, decision making is difficult because there are so many unknowns. And you can’t get enough information to decide in a reasonable time frame.

Often, others will disagree wholly or partially with the founder’s “facts.” However, unless we are talking about physical objects, “facts” are simply one person or one group’s aggregated opinions. That implies there can be many different facts about the same fact,  

However, some founders believe that every decision they make must be right. But what is more important than being right, is making the right decision. You can only do that if you believe you are fallible. 

If your decision doesn’t work out, admit it. You can quickly change course and think about why you made that decision. Study your decision-making process. Learn from it. That’s how you gain the knowledge that will help you when it’s time to make the next decision.

 If you know someone who has to always be right, only send this to them anonymously. 

Jim Zitek/ https://https://harborcapitalgroupinc.com/wp-content/uploads/2024/07/Braintopview-1.jpg.com 

 

 

How Do We Know What To Believe

Posted on by harborcapitalgroupinc

In his book, All Marketers Tell Stories, Seth Godin talks about understanding why people buy the goods and services they do, He states that: We believe things that aren’t true …or many things that are true, are true because we believe them. 

In other words, we believe what we want to believe, and once we believe something, it becomes a self-fulling truth. For example, why do people buy bottled water when they can get it for free?

One reason is that we have moved beyond buying things we need and have moved to buy things based on our complexity of wants. If you believe that bottled water is better and you want better water, you happily buy it and also enjoy the statement the product makes to others.