Small Business Advice – Pick of the Week Nov 26th, 2022
This week’s top stories include small business advice covering the following four topics:
- Business Contract: What it is and How to Write It
- Nearly Every Swedish Economist Says This Is the Financial Concept You Most Need to Understand
- The Creator Economy is the future of the economy
- When Should Startup Founders Start Handing Out Equity and Titles?
Each week we scour all the top business-related magazines and newspapers for articles with the best advice for the small business owner, so you do not have to.
Readwrite
By: Alice Zdraj
Image Credit: Canva Being a long-term business owner is closely related to sealing various deals with your workers, customers, and/or vendors. That, in its turn, requires working with business contract templates regularly. In this piece, we’ll dwell upon contract management especially claiming business contracts, their meaning, their types, and how to write them.
Related Post: Why And How to Prepare a Simple Letter of Agreement
Nearly Every Swedish Economist Says This Is the Financial Concept You Most Need to Understand Inc
By: Jeff Haden
Getty Images A guy at the gym said he was getting a great deal on a new car. “My payment will only be $500 a month!” he said. Then he asked for my opinion.
“What are you paying for the car?” I said.
“Doesn’t matter,” he said. “$500 works for my budget!”
I tried to (gently) explain that a low monthly payment in no way indicates a good deal. He should negotiate the price first, then negotiate loan terms.
I’ve had similar conversations a number of times in the past; if asked what’s the most common financial mistake made by consumers — as well as by entrepreneurs who need financing to start a business, buy equipment, etc. — I would have said, “payment shopping.”
Turns out, I was wrong.
A team of researchers asked nearly every Swedish economist which financial concept would be the most beneficial for the average person to understand.
The clear “winner,” according to the 2020 paper published in Studies in Higher Education, wasn’t interest. (Although interest was number two, so I wasn’t far off.) Nor was it inflation nor supply and demand.
The most important concept? Opportunity cost.
Related Post: Why You Need to Always Assess Opportunity Cost
The Creator Economy is the future of the economy Fast Company
By: Richard Florida
Getty Images Nearly 60 million Americans—as much as 40% to 50% of the workforce in some cities—are members of the Creative Class, meaning they are directly employed to work with their intelligence and creativity in fields spanning the arts and culture, science and innovation, and the knowledge-based professions. This is up from just 10% to 15% of the U.S. workforce in 1980.
The more recent rise of online creators and the Creator Economy is the digital manifestation of the rise of creativity as a key element in our economy, society, and everyday lives. Although creators are often thought of as merely digital influencers, they’re better understood as anyone who makes and publishes unique content online, whether that’s videos, films, art, music, designs, text, games, or any other media that audiences can access and respond to. Therefore, the Creator Economy is the economic, social, and professional ecosystem that creators work in, including such digital platforms as Facebook, YouTube, Instagram, TikTok, Twitter, LinkedIn, Substack, and Patreon; the digital tools and apps that they use; the startup companies that are constantly advancing their technologies; and the people and companies that support creators’ work and help them monetize it, from videographers and makeup artists to business managers, accountants, and branding consultants.
The scale and scope of the Creative Economy is large—and it is growing. More than 85 million Americans and more than 300 million people across nine large nations were estimated to post their creative content online in 2022. Roughly 17 million creators were found to actually earn revenue on nine major digital platforms as of 2017. The overall size of the Creator Economy was pegged to be more than $100 billion; and almost $15 billion in venture capital has been invested in some 300 Creator Economy startups since 2021.
But what’s less appreciated is how key elements of the Creator Economy are geographically clustered.
Related Post: 10 Ways to Drive Sales With a TikTok Marketing Strategy
When Should Startup Founders Start Handing Out Equity and Titles? Inc
By: Joe Procopio
Getty Images When you’re a first-time startup founder, it can be tempting to start thinking about the organizational structure of your company and team a little too early. If you’re a serial entrepreneur like me, you probably go the other way, and delay conversations about roles, equity, and titles until they can no longer be ignored.
There’s a happy medium in there somewhere. And after 20 years of founding startups myself, or sliding into a startup’s org structure at various stages of growth, or even just participating at arm’s length as a startup advisor, consultant, or board member, I’ve discovered that the timing of when you dole out equity and titles is often as important as how much and to whom. If you get it wrong, you either won’t get the early talent you need to succeed, or you’ll wind up with underperforming team members who own way too much of the company to smoothly remove them.
So before you create your cap table or offer your first option grant, check these boxes.
Related Post: How to Allocate Equity in a Startup
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* This article was originally published here
* This article was originally published here
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