When attempting to figure out how to double your cash, putting resources into the financial exchange is ideal for expanding your riches. The financial business can be unsafe, and you may lose some money. Be that as it may, you can likewise bring in cash, putting resources into the securities exchange. Imagine a scenario where you don’t have a great deal of money to contribute or know where to begin. You can even now put resources into the securities exchange and develop your cash. The key is to start contributing right away. The sooner you start contributing, the less money you need to spare due to self-multiplying dividends.
Numerous individuals accept the securities exchange is the best way to develop riches. Because of crowdfunding, the land is a suitable venture choice for additional individuals. You used to require noteworthy measures of cash to put resources into the ground. On the other hand, you are expected to deal with a property. Crowdfunding lets you discover land ventures with insignificant assets. It likewise permits you to abstain from dealing with the property yourself.
Bank accounts are an exemplary method of increasing cash. While multiplying your money with a bank account will take years, they are reliable methods of developing your money without exertion. Financing costs on investment accounts used to be fundamentally higher in past years. Before the Great Recession, they were approaching five percent. Presently, it’s elusive—anything over one percent.
Suppose you are investing in retiring one day, sending your children to college, or even buying a dream home for a long time. In that case, it is vital to ask relevant questions, such as how long it will take you to double your investment and how long it will last until you can liquidate the asset. There are some simple ways to invest and double your money in a reasonable time.
The Rule of 72
Before investing, you should calculate how much it will take to double it based on the interest rate you receive. All you must do is take 72 and divide by the interest rate you receive for your investment. It will tell you the number of years it will take you to achieve twice as much money. For example, 72 divided by an interest rate of 12 shows that it will take six years to double. If it takes you two periods to achieve the objective investment index, you know it will take 12 years to complete it.
Mutual Funds
There are trustworthy mutual funds such as “Legg Mason,” “Vanguard,” and “American Funds” that, with their diversified investments, have achieved interest of 10% to 12% over time. These investments have variations in risk levels and possible rewards that can be adjusted to your investment objectives. The funds may have different types of national and foreign bonds and stocks. Your investment does not have to be significant. Some funds allow a monthly contribution of $25. However, it makes little sense to invest in mutual funds if you keep them there for six years or more.
Hard Assets
Suppose the objective of your investment is a little more conservative. In that case, you have more extended periods to reach the goals or have a higher security level. Hard assets such as silver or gold may be ideal for you. These investments tend to fluctuate at 6 and 8 percent interest over time, so they tend to double their value every 12 years. However, you can feel safe knowing that silver and gold are always in high demand.
Real Estate
Suppose you have a significant sum of money to invest and don’t mind adding effort. In that case, real estate is the fastest way to double your investment. The concept is simple: you buy and rent the property, creating a passive income. Alternatively, you can buy a mortgage in a bearish economy, fix the stuff, and then sell it when it improves.
Credit Card Bills
First, you shouldn’t need to be a credit card owner if you earn the lowest income. People with average income will have to pay credit card bills on time without delaying and becoming debtors. If you ignore this fact, you won’t be eligible for a further loan in the future. It will be a strict restriction for at least 7 to 10 years per the credit card report’s rules. The related precautions can double your capital.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
When you plan on releasing a new app, it does not guarantee massive success as soon as it’s launched! There is no doubt how competitive today’s app market can be. To stand out in the crowd, you must develop an intriguing and creative app idea that comes with productive and compelling features and business-driven app advertising strategies.
There are always specific protocols to follow in every field. Launching your app may sound fun and easy, but that’s only limited to the way it seems. You have no idea about the competition ahead of you, marketing tips and tricks that people won’t tell you, and you won’t be able to understand unless you’re in the game!
Here is a list of a few vital things to anticipate before launching an app that would make the path to success smoother.
Know the Market Competition
Believe it or not, but knowing the market and competition has a huge impact!
You must know the market well before and when to launch the app and what the market demands! Furthermore, doing detailed market research on your competitors would be best. It would help if you researched what services your competitors are providing and how consumers react to those facilities.
Therefore, you must find the loopholes and develop an innovative solution that can professionally resolve consumers’ problems. Proper market research will help you set clear intentions for your business and develop an impactful tactic.
A Strategic Approach to Pricing
Determining the app pricing model can be decisive! So, if your goal is to launch an application on the App Store that would grasp a vast market base, the freemium pricing model can be the best choice for you. Otherwise, a subscription or paid rating model can work best if your object solves any issue for a forte audience.
However, depending on the purpose your app will serve, you must choose the unsurpassed option. Before setting a price, you must find answers to the following questions.
What is the cost of your competitive apps?
How much money would you need to have your application running?
What extra features should you provide if a user chooses in-app purchases?
Optimizing the Application for an App Store Search
Launching your application on the App Store is not the end of your tasks. You need to optimize the use appropriately so that the standing is not affected. According to experts, the below-mentioned are significant aspects that greatly influence the ranking of an app.
The use of the keywords in the app description or name
Branding and visuals used in your app
Total number of positive reviews generated by the app
Total number of app downloads
You can make your business a success in many ways, but there are always a few specific points or rules to follow to get to that point. For example, a student must go through a whole process to enroll at an institution. Then, he must perform well and follow the rules and regulations; every subject requires a whole new concept and tactics. Then there are many students; everyone graduates, but some graduate with higher numbers and rankings while others struggle. Similarly, everyone and anyone can starta business, but those who study and follow the protocols and fulfill the requirements can only succeed and make their way to the top.
According to research on app ranking tactics, the correct placement or order of the keywords in the app title can automatically boost your ranking by almost 10.3% on the app store.
Apart from all the mentioned aspects, you need to expect other points, such as planning and designing branded screenshots and fascinating visuals to serve the marketing goals. Furthermore, you must pay special attention to getting reliable and honest recommendations. This will help people understand the value of using your app.
Keep trying, follow the steps, and never give up! Good luck!
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Discover Your Business Valuation: Understand Its True Worth
Business valuation is the process of determining the economic value of your business using standardized methods and market-driven comparisons, helping you uncover what your company is truly worth for investment, sale, or strategic decisions. This systematic approach combines financial analysis, operational assessment, and market benchmarking to arrive at a defendable figure that represents your business’s fair market value in today’s economy.
As a founder who’s navigated multiple acquisitions and helped hundreds of clients prepare for exits and funding rounds through Complete Controller, I’ve witnessed firsthand how proper valuation transforms business outcomes. Consider this: business owners who attempt self-valuation miss their company’s true worth by as much as 60%, either dramatically overvaluing or undervaluing their enterprise. Over my 20 years leading Complete Controller, I’ve seen clients across manufacturing, healthcare, professional services, and technology sectors discover hidden value in their operations—often millions in intangible assets they never knew existed. This guide will equip you with the three core valuation approaches professionals use, reveal common pitfalls that cost owners millions, and provide actionable steps to maximize your company’s worth before any major transaction.
What is business valuation and how do you uncover its true worth?
Business valuation determines your company’s economic worth through financial analysis, operational metrics, and market comparisons using formal appraisal methods
The market-based approach compares your business to similar companies that recently sold
The income-based approach calculates value based on projected future earnings and cash flow
The asset-based approach tallies up what you own minus what you owe
Professional valuations combine multiple methods for accuracy and credibility with buyers, investors, and lenders
Understanding Business Valuation: Core Concepts Every Owner Should Know
Business valuation goes beyond simple arithmetic—it’s a comprehensive economic assessment that captures your company’s potential, not just its past performance. The process analyzes your financial statements, operational efficiency, market position, competitive advantages, and growth trajectory to establish what a reasonable buyer would pay in an open market transaction.
Valuations become critical at specific business milestones. Sales transactions and mergers require defensible valuations for negotiations. Tax planning, estate settlements, and succession planning demand IRS-compliant valuations. Partnership disputes, divorce proceedings, and shareholder buyouts need neutral third-party assessments. Strategic planning benefits from regular valuations to track progress and identify value drivers.
Business valuation meaning and importance
The economic worth of your business encompasses tangible assets like equipment and inventory, plus intangible assets including customer relationships, brand reputation, and proprietary processes. Recent data shows global intangible assets reached $79.4 trillion in 2024, yet 79% of this value goes unrecorded on balance sheets—meaning most owners dramatically underestimate their true worth.
Real-world triggers for business valuation
America’s 36.2 million small businesses face unprecedented challenges: 40% of owners are Baby Boomers approaching retirement, yet less than one-third have exit plans. Only 52% have updated valuations within three years, despite 80% worrying about interest rates and recession risks. Regular valuations help owners capitalize on favorable market conditions—timing matters when a single percentage point in interest rates can slash valuations by millions.
The Three Major Business Valuation Methods Explained
Professional appraisers rely on three universally accepted approaches, each revealing value from different angles. Smart owners and their advisors typically combine multiple methods to triangulate a defensible valuation range that holds up under scrutiny from buyers, lenders, and tax authorities.
Market-based approach to valuation
The market approach analyzes what similar businesses actually sold for, providing real-world benchmarks. Appraisers examine recent transactions in your industry, adjusting for size, location, and financial performance differences. Public company comparables offer additional data points, though private company transactions carry more weight for small and mid-market valuations.
This method works best in active industries with robust transaction data—business services, healthcare practices, and franchises typically have strong comparable sales. Manufacturing, distribution, and specialty retail also benefit from established industry multiples. The challenge comes with unique or niche businesses where true comparables prove scarce.
Income-based approach to valuation
Income methods focus on your business’s earning power and future cash generation potential. The discounted cash flow (DCF) method projects future earnings, then discounts them to present value using risk-adjusted rates. Capitalization of earnings takes normalized historical profits and applies a capitalization rate based on risk and growth expectations.
These approaches suit profitable companies with predictable revenue streams—professional services, recurring revenue businesses, and established B2B companies. Growth companies benefit when projections show expanding margins and market share. The income approach struggles with turnarounds, startups, or businesses facing major industry disruption.
Asset-based approach to valuation
Asset methods calculate value by tallying what you own minus what you owe, adjusted to fair market value rather than book value. The going concern approach values assets at replacement cost for an operating business. Liquidation value assumes selling assets piecemeal, typically yielding lower values suitable only for distressed situations.
Asset-heavy businesses like manufacturing, real estate holdings, and equipment rental companies align well with this approach. The method also applies when earnings remain minimal relative to asset base, or when considering net worth for lending purposes. Service businesses with few tangible assets rarely rely solely on asset approaches.
Key Business Valuation Formulas and Tools You Can Use
Understanding valuation mathematics empowers better business decisions, even if you ultimately hire professionals for formal appraisals. These formulas provide quick estimates and help you speak confidently with advisors, buyers, and investors about your company’s worth.
Using multiples (EBITDA, Revenue) in valuation
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) multiples dominate mid-market valuations. Most businesses trade between 3x to 8x EBITDA, with industry, size, and growth rate driving variations. Calculate your multiple by dividing enterprise value by EBITDA: a $10 million sale price with $2 million EBITDA equals a 5x multiple.
Revenue multiples apply when EBITDA remains inconsistent or when industry norms favor top-line metrics—SaaS companies often trade on revenue multiples ranging from 2x to 10x depending on growth rates and retention metrics. Always research current multiples for your specific industry and size range, as these shift with market conditions.
Discounted cash flow: The intrinsic value formula
DCF analysis projects your next 5-10 years of cash flows, then calculates their present value using a discount rate reflecting risk and opportunity cost. Start with realistic revenue projections, subtract operating expenses and taxes, add back depreciation, and adjust for working capital needs. The resulting free cash flows get discounted using rates typically between 15-30% for small businesses.
Terminal value captures cash flows beyond the projection period, often representing 50-80% of total valuation. This highlights why growth assumptions and discount rates dramatically impact results—small changes create million-dollar swings in calculated value.
Asset valuation: Calculating net worth by the books
Basic bookkeeping provides your starting point: total assets minus total liabilities equals book value. However, market value adjustments transform this academic exercise into real-world valuation. Equipment appraised at current market rates, inventory marked to net realizable value, and real estate assessed at fair market value often reveal significant hidden equity.
Don’t overlook intangible assets—customer lists, patents, trademarks, and proprietary technology carry substantial value despite not appearing on standard balance sheets. Professional valuations capture these assets that owners frequently miss.
Real Case Study: How Interest Rates Devastated Healthcare Valuations
The healthcare staffing sector provides a stark lesson in valuation timing. Two virtually identical healthcare recruitment firms, each generating $1.4 million in EBITDA, sold at drastically different valuations based solely on market timing:
Q3 2022: First company sold for $12 million (8.4x EBITDA multiple)
Q2 2025: Second company sold for $5.625 million (4.0x EBITDA multiple)
The culprit? Rising interest rates increased buyer financing costs, compressing multiples across all industries. The same profitable business lost over 50% of its value in under three years—not from operational issues, but from macroeconomic shifts beyond owner control. This case underscores why regular valuations and strategic timing can mean millions in additional proceeds for sellers who monitor market conditions closely.
Beyond the Math: Common Mistakes and What Most Owners Overlook
Two decades of client work reveals consistent blind spots that cost business owners millions during transitions. These oversights stem from emotional attachment, outdated thinking, and focusing on obvious assets while missing hidden value drivers that sophisticated buyers seek.
Overlooking intangibles and non-financial value
Your customer relationships, brand reputation, operational systems, and employee expertise often exceed tangible asset values—yet standard financial statements ignore them entirely. Proprietary processes you’ve developed, market position you’ve earned, and recurring revenue streams you’ve built represent genuine economic value that buyers pay premiums to acquire.
Professional valuations quantify these intangibles using established methodologies. Customer concentration analysis, brand valuation techniques, and intellectual property assessments reveal millions in hidden value. One manufacturing client discovered their custom software and documented processes added 40% to their valuation—value invisible on their balance sheet.
Not updating or revisiting business valuation regularly
Markets shift, industries evolve, and your business changes—yet most owners cling to outdated valuations. Annual updates track progress, identify emerging value drivers, and spot concerning trends before they impact sale price. Milestone valuations after major contracts, expansions, or market shifts capture value creation in real time.
Regular valuations also improve operations by highlighting what drives value in your industry. Owners who track valuation metrics monthly make better decisions about hiring, expansion, and investment. They negotiate from strength because they know their worth—not what they hope or guess it might be.
Who Should Conduct Your Business Valuation? DIY, Tools, or Credentialed Experts
Valuation needs vary with purpose and stakes involved. Online calculators provide directional estimates for planning. Professional advisors deliver defensible valuations for transactions. Understanding when each option fits prevents costly mistakes and ensures credibility when it matters most.
Online business valuation calculators: Benefits and limits
Free calculators offer quick estimates using simple multiples and basic inputs—useful for initial planning and regular tracking. These tools help owners understand valuation basics and monitor directional changes over time. Small businesses considering their first valuation often start here to establish baseline expectations.
Limitations become apparent quickly: generic multiples miss industry nuances, standard formulas ignore company-specific factors, and oversimplified inputs produce wide valuation ranges. Most importantly, no buyer, lender, or court accepts calculator results as credible valuations. Consider these tools as educational starting points, not transaction-ready assessments.
Working with advisors for a trusted valuation
Credentialed appraisers—CPAs with ABV certification, ASA members, CVA holders, or CFA charterholders—bring technical expertise and market knowledge that transforms rough estimates into defensible valuations. They access proprietary databases, understand complex methodologies, and produce reports that withstand scrutiny.
Professional valuations typically cost $5,000 to $30,000+ depending on complexity, purpose, and detail required. The investment pays dividends: sellers negotiate higher prices with documented valuations, buyers secure better financing with professional assessments, and all parties avoid post-transaction disputes. Choose advisors carefully—industry experience, credentials, and report quality vary significantly.
Final Thoughts: Your Business, Your Worth—A Founder’s Perspective
After two decades helping entrepreneurs navigate valuations, I’ve learned one truth: knowing your worth transforms how you run your business. Owners who understand their valuation make confident decisions, pursue strategic opportunities, and ultimately exit on their terms rather than accepting whatever the market offers.
Your business represents years of sacrifice, innovation, and growth—don’t leave its value to guesswork or outdated assumptions. Regular professional valuations provide the clarity and confidence to maximize what you’ve built. Whether you’re planning an exit in six months or six years, understanding your valuation today shapes every decision between now and then.
Ready to discover what your business is truly worth? The valuation experts at Complete Controller combine decades of experience with cutting-edge methodologies to reveal your company’s full potential. Visit Complete Controller to schedule your complimentary consultation and take the first step toward understanding—and maximizing—your business value.
Frequently Asked Questions About Business Valuation
What is business valuation, and why is it important?
Business valuation determines your company’s economic worth using financial analysis, market comparisons, and standardized methodologies. It’s essential for major decisions including selling your business, raising capital, tax planning, partnership changes, and succession planning—providing an objective baseline for negotiations and strategic planning.
How do you calculate the value of a business?
Professionals calculate business value using three main approaches: market-based (comparing to similar business sales), income-based (projecting future earnings), and asset-based (tallying assets minus liabilities). Most valuations combine multiple methods, with EBITDA multiples and discounted cash flow analysis being the most common for profitable small to mid-market companies.
Which is the best method for business valuation?
No single method works best for all businesses—the optimal approach depends on your industry, profitability, assets, and purpose for valuation. Service businesses often use income methods, asset-heavy companies may favor asset approaches, and businesses in active M&A markets benefit from comparable transaction analysis. Professional appraisers typically blend methods for accuracy.
How much does a business valuation cost?
Business valuation costs range from free online calculators for rough estimates to $5,000-$30,000+ for certified appraisals. Factors affecting cost include business complexity, valuation purpose, report detail required, and appraiser credentials. Transaction-related valuations requiring detailed reports and defensible methodologies typically cost $10,000-$20,000 for most small to mid-market companies.
Do I need a professional to value my business?
While online tools provide directional estimates, professional valuations become essential for transactions, tax compliance, legal matters, and credible negotiations. Studies show self-valuations miss true value by up to 60%. Certified appraisers bring objectivity, technical expertise, market data access, and report credibility that DIY methods cannot match.
Sources
“Key Business Valuation Methods and Formulas.” M&A Community, mnacommunity.com
“Company Valuation Methods—Complete List and Guide.” Valutico, valutico.com
“How to Value a Business: Seven Valuation Methods.” SoFi, sofi.com
“Comprehensive Guide to Business Valuations.” Keiter CPA, keitercpa.com
“9 Business Valuation Methods: What’s Your Company’s Value?” Dealroom, dealroom.net
“How to Value a Company: 3 Key Methods.” Capstone Partners, capstonepartners.com
“How to Value a Company: 6 Methods and Examples.” Harvard Business School Online, online.hbs.edu
“What Is Business Valuation? (And Methods You Can Use).” Indeed, indeed.com
“Valuing a Company: Business Valuation Defined with 6 Methods.” Satty.com, satty.com
[Forbes, “How a Proper Valuation Helped One Company Sell for 20% More,” January 2023.]
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
Beyond just a striking logo, decent branding surges a corporation’s value, provides employees with a path and inspiration, and makes obtaining new clients easier. A brand signifies the sum of an individual’s insight into a company’s customer service, standing, promotion, and logo. Let’s discuss some branding tips and tricks for your business.
Be Transparent
Even if you do not wish people to know who you are today, they will find out if you become successful. Hence, seek to shape a brand that signifies your actual values that you would be proud to characterize. That way, when things are exposed to you, it is not a shock to anybody because they already know, like, and believe you.
Market to the Audience of One
Do not forget that you know who you want to be in your spectators, and you will shape all your advertising materials to demand only that audience of one. It means you place blinders on and are not concerned about turning a few people off who may not buy your merchandise but seek to appeal to a precisely targeted spectator within the niche instead.
Send Information Regularly to the List of Members
One way to guarantee that you stay in touch with your viewers is to send emails to list followers consistently. Another way to do that is to go with the “newsletter” impression, sending a pleasant update every week on what you have shared on social systems and your articles in one spot.
Pay for Ads (Facebook, Instagram, and YouTube)
The days of free advertising are almost over. You can market free content, but that would take a lot longer. If you wish to move things faster, spend money on marketing—at least in these stages. Market your waged and free content to your audience to ensure the most eyes get on the content.
Post-Long-Form Content on Your Blog
Longer content on your blog is more significant than ever. When you post extended content, you are a professional because you can discuss aspects that are not in your audience’s interest. It also signals to search engines that you may be an authority website.
Have a Mobile-Friendly Website
It would help if you had a mobile-first policy, more than a “mobile-friendly” website. Your site needs to work on cell phones and off mobile, but if you design first for the mobile, it will also work fine and look decent off cell phone platforms.
Use the Social Media that Your Audience Likes Most
When you want to be everywhere, use the podium your spectators use more than the others. You may be required to test it out to find out where you increase the most traction, but make sure that your crucial stand as soon as you know where they are.
Attend Live Events
It is best to connect the live event, such as a live webinar, a YouTube live event, or an in-person occasion like a workshop or seminar. In other words, you are leading the crowd, making you the pack leader. Bring the best out of your role!
Be Authentic
Your brand must consider your company’s personality and values. When growing a brand, remember to be genuine about what your brand is like and who your consumers are. Consumers can be disheartened if their experiences with a business are dissimilar from what the branding promised to deliver.
Tell the Story of Your Business
You can start growing your brand in the view of the story of your business — how it all started, what you are hoping to achieve, and who you wish to appeal to the most. Your story must be an essential element of your brand.
Seek Professional Advice
While it might be appealing to design your very own logo to save cash, unless you have the required experience and skills, you will benefit from seeking professional consulting. A professional branding designer or consultant can work with you and develop a brand based on the imagination of your business.
Please Keep it Simple
Keep your branding relevant and straightforward to the people you are trying to lure. Adding too many components, such as images, fonts, and colors, can make your brand challenging to use and recognize.
Be Consistent
Always ensure you are constantly aware of how you use your branding. A great way of managing a brand is to start a manual or style guide. It will contain all the components of your brand, from colors and fonts to conveying style. A great many examples of branding technique guides are obtainable on the internet.
These are effective and helpful ways to brand your business and see yourself flourish in no time.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
When businesses consider their customers and acquire new ones, brands must be involved with them. Branding has changed a lot since it was first introduced. The idea of branding is simple – Learn more about what people think about you.
Branding combines many elements, such as your logo, content, and how you make people feel when they connect with your brand.
Effective branding is all about creating a purposeful and active community and building your brand in the best way possible. To do that, you can always use social media, which is an effective platform for interacting with people worldwide. Remember, not all brand efforts are the same; it depends on your goal. Here is how branding can help you and your brand.
Making Your Brand Accessible
Branding has the power to bring your brand and its customers closer together. Customers feel special when they think that a brand is accessible to them. They will always feel like the brand is looking after them and has all the right products and services based on their needs.
Emotional Connection
Branding always targets the emotional aspect of the customer. When people talk to you, they judge you based on how well you communicate with them. When new customers connect with you emotionally, they are more likely to return and be loyal. Targeting emotions helps in getting more sales from promotions.
Brand Loyalty
Branding is all about creating brand loyalty. With the right amount of branding, the relationship between the customer and the brand develops over time, resulting in untainted brand loyalty. Brand loyalty has several benefits, such as people preferring to recommend you to others; they keep buying from you and being a part of your community for a long time.
Focuses on Long-Term Approach
The most significant difference between marketing and branding is that marketing is usually a short-term solution. In contrast, branding is a continuous and constant effort to maintain an image in the business world. For instance, when customers see your logo, they should recognize you quickly. Your products must carry the same promises you made in your commercials. Your communication with the people is always excellent so that people know what you are offering.
How to Build an Online Community?
If you think about how often a brand shouts its messages at its audience. No context, no engagement, and no conversation make the brand look self-centered, spammy, and not trustworthy. Brands, as such, must learn more about their audience’s needs, interests, and behaviors. They should work on solving their customer’s issues and problems. As a result, customers care about the brands and what they have to say in return. It is how you win a customer who later becomes loyal to the brand. Take a quick survey for yourself and notice how the brands function; watch and learn.
Like many things, a community is not going to grow bigger overnight. The most successful communities usually start with small email lists, forum threads, friendly dinners, and more.
They later become something significant as you learn more of its values and become independent ambassadors. To start as small takes a lot of patience, and doing a thing that does not scale, the efforts will pay off in the long run.
Bottom Line
Branding significantly contributes to business success. Regardless of what business you are running, if you want to maintain your market position, you need to focus on getting the right message across, which requires branding. By appearing online and in communities, you can make your business robust, accessible, and well-known to the public.
Branding helps you get closer to the audience you are trying to reach out to and develop a deep connection. Brand loyalty is one of the most significant KPIs of any business, which, in return, delivers exceptional profits.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
The more our world advances into new domains, the better the technology taps into it and opens opportunities for its development. Social media happens to be one such domain that has unleashed new horizons for the business world and how it has worked for them. Calling social media platforms as the most crucial to grow and promote a business wouldn’t be an exaggerated statement because that is how it has worked for them. From helping a company increase brand awareness to increasing its sales, how does social media help you? With everything, perhaps?
The idea is our target audience uses social media platforms just as they spent their time watching movies and playing games earlier. These platforms – by the way, entertain them and ensure that your audience is engaged with them. And the fact that COVID-19 has come right at us without any warnings, keeping us locked and chained in our houses – these platforms have become even more mandatory. If you are not convinced yet, use the guide below and benefit from social media platforms in new ways.
Define Your Goals
The benefits you want to uncover from different social media platforms can only work for you once you clearly define your goals. The more precise you determine your goals, the more benefits these platforms provide. Concise, clear goals – following the SMART goals concept, i.e., specific, measurable, achievable, realistic, and timely goals, help you achieve your end goal promptly. So, while defining your goals when utilizing social media platforms, ensure that you define them following the right strategy – in particular, use the acronym ‘SMART,’ and you’ll find social media working wonders for your brand.
Research Beforehand
Your target audience will likely not use every social media platform. While some find Facebook their go-to social media platform, others can spend most of their time on Instagram, Snapchat, Twitter, or whatnot! In such a setting, where options are innumerable, you should choose exactly the one that would work for you according to your research and analytics. However, to narrow your options and cut down on the cost, your analysis would ease the process for you. So, ensure you research the platforms and use them to your advantage.
Choose the Right Platform
Now that you are done with your research and have narrowed down your goals, choosing the right platform is of utmost significance. Your objectives are clear, your goals are set, and you know the same platform your target audience uses. Here comes the time to choose and use the right platform to utilize social media marketing efficiently. On the other hand, if you’re too keen, you can use a bunch of different platforms so that you get to capture a mass audience.
Devise an Action Plan
When you finish selecting the right platform—the one you’ll be using for almost all your social media marketing strategies—ensure you devise an action plan. Create content that gives insight into your brand through texts or infographics. In this way, you’ll find your brand making larger-than-life returns
.
Keep Your Audience and Goals on the Same Page
One of the mistakes you make when using different strategies to promote your brand and its offerings is not keeping your audience and organizational goals on the same page. While this confuses your audience, the conflict in your strategies can have unimaginable consequences. For example, your target audience can drift away from your brand, substituting it with others in the market to get the exact product you offer.
The idea is that with several brands existing in the market, you must be sure of the impact your strategies can make on your brand. Otherwise, your brand will lose its impact on your audience, and they’ll find other brands working for them more than yours. All in all, from your goals to your strategies, you should align your goals in a way that brings you incredible results. Ensure your customers and all your promotional strategies are working at the same pace so there are no conflicts.
Bottom Line
Here are some of the most effective social media marketing methods. Use them to your brand’s advantage and enjoy the results.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Why should businesses have a strategy to prevent errors and losses? When companies struggle to sustain their productivity and growth, it can directly and indirectly affect employee morale.
Human business errors have become too familiar nowadays, particularly when management has not invested in new technology. Research indicates that human errors may be the third leading cause of new businesses shutting down in the United States. Over the years, progress has been made to mitigate these errors, but it doesn’t seem enough.
Here are strategies that leaders in the business sector can implement to reduce all sorts of errors.
Leverage your employees
Motivating your employees is one of the best and most effective ways to prevent business losses. In general, when employees don’t see the bigger picture and how their contribution makes a difference in the company, they don’t care about its growth.
Remember, no matter how much money you have, your employees will always be your biggest asset. Therefore, your employees must invest in the business’s success, allowing them to pay more attention to their work. Here are ways to increase employee morale in your company:
Career mentoring
Frequent appreciation events for the employees
Raises and promotions frequently based on promotions
Effective communication
One of the most significant contributors to business errors is miscommunication among employees. Leaders in professional settings, like executives and managers, should come up with initiatives to improve communication. Effective communication between teams can prevent severe financial losses and operational failures from taking place effectively.
Your employees should know that loss prevention is not something the organization takes for granted. As a CEO or director, take regular feedback from your team managers on how everyone is performing. Keep an eye on the factors that are common among all teams. More importantly, communicate regularly and remind them how vital loss prevention is.
Clear policies
Your employees need to know what you expect of them to prevent losses. It cannot be done only with a pep talk once a month but should be mentioned clearly in the company policy. A well-documented approach ensures your employees know how you expect things to be done from the very first day and what benefits they can reap if they do.
In addition, your policies should state employees’ responsibilities and how to respond in case of losses. But what if you have suffered losses in the past? In that case, you can make the necessary changes to company policy by conducting an in-depth review of the hiring procedure. Carry out additional background and reference checks, as they might help you find the best talent in the market, increasing your business performance.
Update accounting
Okay, let’s take a turn for the obvious. The majority of the errors are caused by business owners’ concerns with finances. There is no denying that businesses run on capital and investment and eventually get returns on those investments. Therefore, don’t forget to check the accounting sheets for transactions, i.e., how much went in and came out. It can take a lot of work, and you might need to hire a neutral party, like a financial auditor, to identify abnormalities in the account.
Avoiding diagnostic error
Diagnostic errors don’t just include the wrong diagnosis but also overdiagnosis, delayed diagnosis, and partial diagnosis. It is recommended that leaders involve the entire team while diagnosing business problems, emerging from entry-level employees to high-level executives. Businesses need to introduce an environment of co-creativity, where every single individual uses their expertise effectively. Proper execution of a multi-disciplinary approach can reduce the chances of error dramatically.
Root cause analysis
Root cause analysis (RCA) is a systematic approach that requires leaders to ask three questions for information collection.
What is the problem?
How did it take place?
How can it be prevented in the future?
Leaders should generally follow a prespecified protocol to start with data collection and reconstruct the whole event, analyzing the sequence of events leading to that error.
Bottom Line
Successful businesses focus on improving, whether it’s their operations or employee performance. Every member of your organization must understand the importance of error reduction and loss prevention. We hope this article helped us better understand how to reduce errors.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Everything You Need to Know About Equity Financing
Equity financing raises business capital by selling ownership shares to investors who become part-owners and share in your company’s risks and rewards. This method of fundraising gives you access to capital without taking on debt, but requires trading partial ownership and control of your business.
After 20 years as CEO of Complete Controller, I’ve witnessed countless businesses transform through strategic equity financing—and I’ve also seen founders lose their companies by misunderstanding the process. From tech startups raising their first angel round to established companies preparing for IPOs, the principles remain consistent: equity financing can accelerate growth dramatically, but only when you understand both the immediate benefits and long-term implications. In this comprehensive guide, I’ll share the real numbers behind dilution, reveal the hidden costs most founders overlook, and provide concrete strategies for maintaining control while scaling your vision.
What is equity financing, and how does it actually work?
Equity financing involves selling company shares to investors in exchange for funds to grow your business, rather than taking on debt
Investors become co-owners and share in profits, but you give up partial ownership and some decision-making control
Key types include angel investors, venture capital, private equity, crowdfunding, and IPOs
You benefit from expertise and risk-sharing, but dilute your stake and face complex negotiations
Equity financing is ideal for businesses seeking high growth or unable to access enough debt financing
Equity Financing Explained: What It Is, When to Use It, and Who It’s For
Equity financing fundamentally changes your business structure by introducing new owners who provide capital in exchange for shares. Unlike debt financing where you maintain full ownership while repaying a loan with interest, equity financing creates a partnership where investors share both the upside potential and downside risk of your business.
The mechanics work through share distribution: you determine your company’s valuation, then sell a percentage of ownership at that price. For example, if your business is valued at $5 million and you raise $1 million, you’re selling 20% of your company. These new shareholders gain voting rights, profit participation, and influence over major decisions—the extent depends on your negotiation and share class structure.
When does equity financing make sense?
Early-stage startups with high growth ambitions represent the classic equity financing candidate. These businesses often lack the revenue history or assets required for traditional loans, yet possess tremendous scaling potential that attracts risk-tolerant investors.
Businesses unable to secure loans or requiring substantial capital beyond debt capacity also turn to equity financing. According to the Federal Reserve’s 2024 Small Business Credit Survey, nearly 40% of small businesses carry over $100,000 in debt, with satisfaction in traditional lenders dropping 12-13 points year-over-year. This debt burden and lending frustration drives many entrepreneurs toward equity alternatives.
Who typically uses equity financing?
Technology startups dominate the equity financing landscape, particularly software companies with low marginal costs and global scaling potential. Innovative ventures in biotech, clean energy, and consumer products also frequently use equity financing to fund research, development, and market penetration before generating substantial revenue.
Scaling businesses across all industries tap equity markets when expansion capital needs exceed their borrowing capacity or when they want strategic partners beyond just capital providers.
Types of Equity Financing and Common Sources
Understanding your funding options helps you target the right investors for your stage and needs. Each source brings different expectations, involvement levels, and growth requirements.
Primary funding sources
Angel investors typically invest $25,000 to $500,000 of personal funds in early-stage companies. They often provide mentorship alongside capital and make decisions quickly compared to institutional investors.
Venture capital firms manage pooled funds from institutions and wealthy individuals, investing $1 million to $100+ million across multiple rounds. VCs expect explosive growth and typically seek 10x returns within 5-7 years.
Private equity firms invest in more mature companies, often taking controlling stakes to restructure operations before exit. They bring operational expertise and extensive resources but demand significant influence.
Crowdfunding platforms democratize investment by allowing numerous small investors to participate. Regulation Crowdfunding permits raising up to $5 million from non-accredited investors, while Regulation A+ allows up to $75 million.
Initial Public Offerings (IPOs) represent the ultimate equity financing, selling shares to public markets. The 2025 IPO market shows increased selectivity, with only 18 U.S. companies going public by mid-year, though one-quarter achieved profitability compared to just 12% in 2021.
How each source works
Angel investors often invest within weeks of initial contact, providing not just capital but industry connections and operational guidance. They typically take 10-25% equity stakes and remain actively involved in strategic decisions.
Institutional investors like VCs and PE firms conduct extensive due diligence over 3-6 months, examining every aspect of your business. They’ll negotiate complex term sheets governing everything from board composition to liquidation preferences, fundamentally reshaping your corporate governance.
The Real Pros and Cons of Equity Financing
Every funding decision involves trade-offs. Understanding both benefits and drawbacks prevents costly surprises.
Key advantages
No loan repayments or interest burden represents the primary advantage—you receive capital without monthly obligations that strain cash flow. This flexibility proves invaluable during market downturns or unexpected pivots.
Access to mentorship, expertise, and broad networks often exceeds the value of capital itself. Smart investors open doors to customers, partners, and talent that would take years to access independently.
Shared risk means investors have “skin in the game” and work actively to increase company value. Unlike lenders who want repayment regardless of performance, equity investors only profit when you succeed.
Strategic investors bring industry knowledge, operational experience, and credibility that accelerates growth beyond what money alone provides.
Key disadvantages
Ownership dilution and loss of control represent the fundamental trade-off. As revealed by Quickers Venture’s analysis of 45,000 startups, founders retain only 56.2% after seed rounds, dropping to 36.1% after Series A and just 23% after Series B.
Less privacy and potential for internal conflicts arise when outside investors gain information rights and board seats. Major decisions require approval, and divergent visions can create tension.
Complex and lengthy processes consume significant time and money. The average equity round takes 6 weeks to close after term sheet signing, with full fundraising cycles spanning 5-9 months. Legal fees alone typically cost $50,000 to $150,000.
Future fundraising becomes more complicated as you add investors with different preferences and rights.
Equity Financing Step-By-Step: How the Process Really Works
Successful equity financing requires meticulous preparation and realistic expectations about timelines and requirements.
Preparing for equity financing
Business valuation forms the foundation of negotiations. You’ll need audited financials, growth projections, and comparable company analyses to justify your valuation. Professional valuation services cost $10,000-50,000 but prove essential for credibility.
Pitch materials including executive summaries, detailed business plans, and investor presentations must tell a compelling growth story backed by solid data. Budget 2-3 months for preparation before approaching investors.
Legal and financial due diligence preparation involves organizing corporate documents, contracts, intellectual property records, and compliance materials. Investors will examine everything—disorganization delays funding and reduces valuation.
Negotiating terms and closing the deal
Term sheets outline all economic and control provisions, from valuation and investment amount to board composition and protective provisions. Negotiation typically takes 2-4 weeks with experienced counsel essential for protecting founder interests.
Shareholder agreements formalize all parties’ rights and obligations, covering everything from information rights to tag-along provisions. These complex documents govern your relationship for years—never sign without thorough legal review.
Post-deal obligations include regular financial reporting, board meetings, and investor updates. Budget 10-20% of executive time for investor relations going forward.
What to expect after raising equity
New reporting and accountability standards transform your operations. Monthly financials, quarterly board meetings, and annual audits become mandatory. You’ll need robust business bookkeeping essentials systems to meet investor expectations.
Ongoing investor relations require consistent communication about progress, challenges, and strategic changes. Successful founders treat investors as partners, leveraging their expertise while maintaining vision alignment.
Real-World Case Study: How Equity Financing Fueled Instagram’s Meteoric Rise
Instagram’s journey from startup to billion-dollar acquisition in just two years illustrates equity financing’s transformative potential. Founded in October 2010 by Kevin Systrom and Mike Krieger, the photo-sharing app strategically used three funding rounds to achieve explosive growth.
Their seed round of $500,000 from Baseline Ventures and Andreessen Horowitz provided runway for initial development. By February 2011, with user growth accelerating, they raised $7 million in Series A funding. The pivotal moment came in April 2012 when they closed a $50 million Series B at a $500 million valuation from Sequoia Capital, Thrive Capital, Greylock Partners, and Benchmark Capital.
Days after this funding, Facebook acquired Instagram for $1 billion. The strategic timing wasn’t coincidental—fresh funding demonstrated momentum and gave founders negotiating leverage. Despite dilution across three rounds, the massive exit validated their equity financing strategy. The expertise and credibility from top-tier investors like Sequoia accelerated growth beyond what bootstrapping could achieve.
Despite the Hype: When Equity Financing May Not Be the Right Choice
Hidden costs extend beyond the obvious dilution. Legal fees, compliance requirements, and management time devoted to investor relations can consume 20-30% of raised capital and executive bandwidth.
Long-term ownership dilution often exceeds loan repayment costs for profitable businesses. Borrowing money might preserve more value than selling equity if you can service debt from cash flow.
Tax implications favor debt over equity—interest payments are tax-deductible while dividend payments aren’t. This difference significantly impacts your effective cost of capital.
Preserving founder vision becomes challenging when investors push for strategies misaligned with your values. The pressure for rapid returns can force premature scaling or market strategies that compromise long-term sustainability.
The Human Side: Lessons Learned from the Founder’s Journey
The thrill of closing your first investor meeting with a term sheet fades quickly when negotiating control provisions. I’ve counseled founders who celebrated raising capital only to realize they’d effectively become employees in their own companies. Clear communication about decision rights, board composition, and exit timelines prevents devastating surprises.
Protecting your “why” requires deliberate effort as new voices join leadership. Document your core values and vision before fundraising, then reference these touchstones when investor pressure mounts. The most successful founders I’ve worked with treat investors as advisors while maintaining final decision authority on culture and values.
Conclusion
Equity financing unlocks transformative growth when approached strategically, but success requires understanding both immediate capital benefits and long-term ownership implications. The data tells a clear story: founders who raise multiple rounds typically own less than 25% of their companies, legal costs consume substantial capital, and the process takes far longer than expected. Yet for businesses with explosive growth potential and capital needs exceeding debt capacity, equity financing remains the optimal path. The key lies in timing, preparation, and partnering with investors who share your vision beyond just financial returns.
I’ve guided hundreds of businesses through these decisions at Complete Controller, and the difference between success and regret often comes down to preparation and realistic expectations. Visit Complete Controller for expert guidance on preparing your financials, evaluating funding options, and maintaining the startup accounting systems investors expect.
Frequently Asked Questions About Equity Financing
What is the main difference between debt financing and equity financing?
Debt financing involves borrowing money that must be repaid with interest while maintaining full ownership, whereas equity financing means selling ownership stakes without repayment obligations but giving up partial control and future profits to investors.
Who are typical investors in equity financing?
Common equity investors include angel investors (wealthy individuals), venture capital firms, private equity firms, friends and family, crowdfunding participants, and public stock market investors through IPOs.
What do investors gain from equity financing?
Investors receive ownership shares, voting rights on major decisions, a portion of future profits through dividends or exit proceeds, and potential capital appreciation if the company value increases.
Is equity financing right for small businesses?
Equity financing suits small businesses with high growth potential, limited collateral for loans, or those willing to trade control for expertise and funding. It works best for scalable business models rather than lifestyle businesses.
What are the main risks of equity financing?
Primary risks include diluted ownership (often to less than 25% after multiple rounds), loss of decision-making autonomy, complex and expensive deal processes costing $50,000-$150,000 in legal fees, and potential conflicts with investors over strategy and timing.
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“Demystifying Equity Financing – Chapter.” UVM.
“Debt vs. Equity Financing: Which to Choose?” Preferred CFO.
“Equity Financing – Definition, How it Works, Pros, Cons.” Corporate Finance Institute.
Feuer, William. “Warby Parker: From Startup to IPO.” CNBC, Sept. 29, 2021.
“The Ultimate Guide to Startup Funding Stages.” Visible.vc. 2024.
“Series A valuations in 2025: what founders need to know.” Zeni AI. 2025.
“Founder Ownership in VC-Backed Companies – How Much Do Founders Retain?” Quickers Venture. 2025.
“The Hidden Timeline For Closing A Startup Financing Round.” Alejandro Cremades. 2023.
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“2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey.” Federal Reserve. 2025.
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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
Before making any decisions, you must first determine your investment profile, considering your risk tolerance. You can be characterized as cautious, moderate, or daring depending on your willingness to accept chances while investing.
It is feasible to design a portfolio that is matched with your profile by recognizing the risks associated with each form of investment.
Understand what your personal needs are
It would be best to consider other individual factors besides the investor profile. As a result, it’s critical to evaluate your needs and expectations in terms of return and investing motivations.
For example, if you wish to replenish your emergency reserve, you’ll need to contribute the equivalent of six months’ worth of monthly spending, leaving the money available at any moment. As a result, you’ll want assets that are both safe and liquid.
If you want to enhance your wealth, seeking assets that provide higher financial returns may make sense. To align your selections, you must understand where you aim to go with the financial market’s outcomes.
Know your investment horizon
The evaluation of financial objectives is not limited to the amount you wish to earn. It would help if you also considered how much time you have available and how long you want to devote to it.
Consider the topic of retirement. It is usually a long-term investment, lasting more than five years. As a result, having a deadline in your objectives might help you determine if you can pick solutions with higher or lower risk.
It is also an excellent technique for estimating the amount of work required to meet short-, medium-, and long-term goals.
Understand your available capital
Another crucial step is to assess how much money you have access to invest in the first place. It is significant because some investments must be accessible with specific minimum values.
Furthermore, it is a problem that obstructs the capacity to diversify the portfolio — the ability to pick numerous assets when beginning an investment. It is worthwhile to create a financial strategy to address this issue.
Using a budget-balancing plan, you may save money and boost your investment capacity.
Know the market opportunities
Following this examination, knowing the available options is crucial for understanding how to invest wisely. The financial market is separated into fixed income and variable income.
The first category includes financial assets with pre-established profit margins of which the investor is aware. The second is made up of investments where the financial return is unclear how (or if) it will materialize.
There are various investment options within each class. As a result, it’s critical to understand the features of each one’s safety, liquidity, and profitability – the so-called investing trinity.
You can choose the most appealing chances for your portfolio based on your unique characteristics.
Assess the economic scenario
It is worth evaluating the economic and financial scenario, its characteristics, and how the investments work. For example, before purchasing stock on the stock exchange, it is vital to understand its status and the industry in which it operates.
Analyzing macroeconomic prospects might also assist you in determining the market’s features. As a result, you’ll be able to take advantage of excellent chances while also lowering your portfolio’s risk.
On the other hand, economic scenario analysis should have a limited influence on some decisions. For example, a sector’s poor performance over a semester may not influence the total result in the long run.
As a result, it’s also essential to put up a solid, long-term study. That way, you’ll be able to see what the future holds for that time span.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Financial literacy is what separates a wealthy person from a poor person. Statistics say that if a financially literate person does not have money, he will soon have it. And vice versa, if an economically illiterate person has money, he will surely lose it soon! Read on to why this is happening and how to improve your financial literacy.
Modern research shows that financially literate people are more efficient and successful in life, regardless of which country, position, and area they work. Therefore, wealth, together with knowledge, has been passed down for centuries from generation to generation. During the Soviet Union, there was also no need to teach ordinary people financial literacy. Salaries and pensions were set and guaranteed by the state, there were no risks of losing income, and you could count the number of financial instruments legally available to the people on the one hand. However, along with the arrival of a market economy in Russia, it became necessary to understand economic processes by every market participant, every person.
Read unique books on the basics and principles of financial literacy
Read some books, especially on the basics of the economic study of stock markets. It is essential to have basic information, or anyone can play with your money without your knowledge
Read feature articles
Many financial advisors, including yours, indeed, maintain their blogs, in which they share “secret knowledge” about personal finance with a wide range of readers. Here, you can familiarize yourself with published articles in my blog and subscribe to receive new pieces by e-mail. Increasing financial literacy is good because it does not take your time. Finding 5-10 minutes during the day to study one article will not be difficult, even for the busiest people.
Play financial literacy games
Among investment simulators, the service www.chartgame.com allows you to hone your investing and speculation skills on accurate historical charts of American stocks and compare your trading results with a passive buy-and-hold investment strategy.
Games allow you to test various assumptions and strategies in practice. At the same time, you can observe the result of your actions almost immediately, and mistakes and failures do not affect your financial well-being. Therefore, developing financial literacy through games is a relatively effective and enjoyable way of teaching financial literacy that is suitable for adults and children.
Attend financial literacy workshops, webinars, and courses
In this case, you are required to pay attention to which institution or company is conducting financial literacy courses. For example, seminars with a similar name from some brokerage companies and banks have the real purpose of attracting you as a client and selling you their specific products, so they should be treated with some caution. However, financial literacy courses organized by universities and independent financial advisors can be beneficial, especially if you don’t just listen to them but start applying tips and advice in your daily life.
Develop the proper financial habits
Developing just four good financial habits may be enough for many people to improve their financial situation. These four good habits are:
Avoid debt and loans – live within your means
Start keeping track of income and expenses. Plan your costs a month in advance.
Always save and invest at least 10% of the earned immediately after earning income. And from the remaining money, pay for your usual expenses, starting with the most important ones.
Be sure to ask your financial advisor before investing in any project or investment vehicle.
What Skills Does a Financially Literate Person Have?
Maintains a balance between consumption and investment
Living well today and saving and investing enough money to ensure a liveable future is not an easy task. If you do not save anything for the future, then a miserable beggarly pension from the state awaits you. If you save and invest to the maximum and now live from hand to mouth, there is a risk of not living to see that “bright future.” Therefore, it is essential to maintain a “golden mean” that will allow you to live comfortably now and not worse in the future.
Manages personal finances effectively, planning income and expenses in advance
It is essential to plan expenses for the next month and analyze and compare the plan with the facts for the past period. Thirty minutes a month devoted to planning and analyzing your budget allows you to find holes in the budget, determine where exactly money is flowing, and make the right decisions to increase the amount of money in your wallet.
Sets clear financial goals and successfully achieves them
We do not like to dream about an expensive sports car, a house on the seashore, a yacht, or financial independence. The goal differs from the dream because it has specific deadlines for implementation, cost, priority, and many other parameters.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
