Category: Blog eCommerce Blog

Often considered an essential element of understanding your businesses profitability – working out costumer lifetime value (LTV) can offer a benchmark when assigning ad spends and target customer acquisition cost in digital marketing campaigns. Before measuring your customer lifetime it’s important to understand exactly what LTV is. Put simply, customer lifetime value is a metric

How To Prepare Your Business For Series A?Series A is undertaken for developing a scalable and sustainable business. Startups undertake series A for the purpose of financing and capital raising. Usually, it is the second stage of financing for startups.To prepare for the series, the following steps must be considered for a good outcome:Step 1: Write up a business plan, considering the financial forecasts grounded in the performance to date. This plan must be double-checked by any other founder of a startup, any investor, or accountant for the reason of checking numbers.Step 2: Search for a suitable investor for your business. An investor identified must be keen to invest in your company or industry type, having the necessary funds to invest at your required level of business.Step 3: Paperwork must be completed, related to the registration of the company, corporate structure, IP-related legal documents, liabilities of the company, shared ownership, and related to regulatory compliance. All these documents must be prepared for the purpose of due diligence for the investor.Step 4: Reach out to the investor for the purpose of initial meetings. This must be accomplished by providing an executive summary of the business to the investor. One thing to keep in mind is that emails based on persistent follow-ups may work out, but if one asks for warm introductions it is much better. It’s even better if one has created an investor network by this point, as generic emails won’t make a better pitch line to investors.Step 5: Narrow down the list of investors one wants for negotiation purposes. At least two should have options that are open, as it will help with comparing terms later on in selecting a more suitable optionStep 6: Engage with a venture capital lawyer. It is an important step, as they have the expertise you need to draw up contracts, make agreements for business valuation, negotiating i investment terms and setting up term sheets between both parties involvedBottom line: In preparing for series A, it should be kept in mind that as it is about the first time of developing a scalable business, one must have solid preparation of showing evidence about their attitude of task-oriented behavior, as well as the facts and figures to help reflect growth potential for investment return. This will all help in influencing the investor in funding your business.

Investors play the role of pillars for a business start-up. There are many investors available in the start-up business market. All of them have different terms, policies, and investment criteria. Before dealing with any investor, you must know about all their capital rules and expectations they have for your business. Here are some ways you can get a loyal investor:Venture CapitalistsVenture capitalists are investors who provide private money to raise a business. Venture capitalists are not part of any investment organization or providing investment through a partnership. They have their own money to invest in the start-up business, and in-return they just lend you money and in-return get a profit, according to the predefined rules. You can easily contact any venture capitalist around you. Some websites provide the facility to ask for investment from these investors. Also, you can use social media platforms to find them. And if they will consider your business profitable for investment then they would like to invest.Online platformsThere are many online fundraising platforms through which you can get money for investment. These platforms offer loans for business or donations. Some of the popular platforms is SeedInvest, StartEngine, and CircleUp, etc. You can get loans from such platforms, and you can monthly pay them some profit as a capital.Social MediaSocial media has now become a great source of business advertisement. You can share posts about your business and products. Through this people will get a chance to know more about your business. In this way, you can contact your social media friends for investment. The more they would know about your business, the more they will trust you for investment.Business planBefore investing in a new business, investors check the business plan. If investors would find your business plan interesting, then they will surely invest in your business. Your business plan should be strong enough that investors do not doubt the loss of their investment.Tip: investors like to invest in businesses that have more chances of profit, therefore it is vital that your business is somewhat high in market demand.Equity FinancingEquity financing is an investment method, where a person invests in your business for a share in the business. You can easily access equity investors online or from your friends and family. This investment method can be an effective way to enhance your business.Choose investors and an investment method carefully, because if you want to do a partnership with any investor, there are different rules to be followed and they will get profits according to the shares they have in your business. However, if you want to be the only owner of the business, then avoid investors who look for a partnership, i.e., venture capitalization and equity financing are not suitable.

Lifetime value (LTV) is the total revenue that a customer spent on a business in its lifespan. It is also known as Customer Lifetime Value (CLV). The calculation of LTV is very important to estimate the economic condition and profit of a business. Lifetime Value is a key component to determine the market value of a company. As with each new customer, the revenue increases so it can give a clear view of the value of each customer. Customer Acquisition Cost (CAC) is the amount you invest to get a new customer. If your lifetime value is greater than CAC then it means that you are getting more revenue as compared to the cost that you are spending to get new customers. So, for the establishment of your business, Customer Acquisition Value (CAC) should be less than the Customer Lifetime Value (LTV).How to measure LTV?Customer Lifetime Value is not just limited to the relationship of a customer and company until the time of purchase, but it is the long-term relationship, determined by how much revenue was curated by one customer over a number of touchpoints. There are many ways to calculate LTV but it can be calculated through this simple formula given below.Lifetime Value (LTV)= ???????????????????????????????? ???????????????????????????? O???????????? A G???????????????? P???????????????????? ÷ Churn R???????????? Of A C???????????????????????? O???????????? A G???????????????? P????????????????????‘Customer revenue over a given period’ means how much revenue you get from a customer in a specific period, such as 15 days or one month etc. Whereas, churn rate is the percentage of customers who leave you after a specific period.Suppose that if your customer revenue is $4,000K and the churn rate is 100% then the total LTV can be calculated as:Lifetime Value (LTV) = 4,000K ÷ 100Lifetime Value (LTV) = £40KIn the monthly calculation of LTV, if the values of both revenues and churn rates are greater, there will be very little variation in LTV. If your LTV is less than the CAC, then you must think about where you should put effort to avoid a loss in business. You can easily grow your business to try and keep your LTV higher than your CAC.