Business

Businesses can do much to prepare for the impact of the many hazards they face in today’s world including natural hazards like floods, hurricanes, tornadoes, earthquakes and widespread serious illness such as the H1N1 flu virus pandemic. Human-caused hazards include accidents, acts of violence by people and acts of terrorism. Examples of technology-related hazards are the failure or malfunction of systems, equipment or software.

Ready Business will assist businesses in developing a preparedness program by providing tools to create a plan that addresses the impact of many hazards. This website and its tools utilize an “all hazards approach” and follows the program elements within National Fire Protection Association 1600, Standard on Disaster/Emergency Management and Business Continuity Programs. NFPA 1600 is an American National Standard and has been adopted by the U.S. Department of Homeland Security.

The five steps in developing a preparedness program are Program Management, Planning, Implementation, Testing and Exercises, and Program Improvement. Find out more about the five steps below.

Program Management

  • Organize, develop and administer your preparedness program
  • Identify regulations that establish minimum requirements for your program

Find more information on Program Management here.

Planning

  • Gather information about hazards and assess risks
  • Conduct a business impact analysis (BIA)
  • Examine ways to prevent hazards and reduce risks

Find more information on Planning here.

Implementation

Write a preparedness plan addressing:

  • Resource management
  • Emergency response
  • Crisis communications
  • Business continuity
  • Information technology
  • Employee assistance
  • Incident management
  • Training

Find more information on Implemenation here.

Testing and Exercises

  • Test and evaluate your plan
  • Define different types of exercises
  • Learn how to conduct exercises
  • Use exercise results to evaluate the effectiveness of the plan

Find more information on Testing and Exercises here.

Program Improvement

  • Identify when the preparedness program needs to be reviewed
  • Discover methods to evaluate the preparedness program
  • Utilize the review to make necessary changes and plan improvements

Find more information on Program Improvement here.



Personality Test – Jung, Briggs Myers Types

Types of business

Take free, tried-and-true personality test to identify your Jung, Briggs Myers personality type and obtain its description. Discover career choices and schools suitable for your type. Read more.

Carl Jung characterized people using three criteria:

  • Extraversion – Introversion
  • Sensing – Intuition
  • Thinking – Feeling

Isabel Briggs Myers added a fourth criterion:

The first letters of the different combinations of the four criteria denote personality type formula. For example:

ISTJ – I ntrovert S ensing T hinking J udging

Upon completing the Jung Typology Test you will obtain your type formula, the strength of each of the preferences and the description of your type. It may help you to identify your lifestyle both in general, and with respect to specific areas of activity. You will also obtain a list of the most suitable career choices based on your personality, along with some educational institutions where you can receive a relevant degree or training. « less

Jung Marriage Test

Types of business

Are you compatible with your soul mate? Looking for a perfect dating partner? Will you have a good and stable relationship? The answer is in the Jung Marriage Test . Read more .

A good and stable relationship between partners is conducive to a happy marriage, and we often don’t know what the underlying cause of our conflicts is. The ability to assess the likelihood of a healthy long term relationship is one of the main challenges in dating and matchmaking. Jung Marriage Test™ addresses this challenge. The test identifies potentially successful and potentially problematic matches by comparing and analysing personality types of the partners. Personality type is defined by the three criteria introduced by Carl Jung:

  • Extraversion – Introversion
  • Sensing – Intuition
  • Thinking – Feeling

And the fourth criterion added by Isabel Briggs Myers *:

The different combinations of these four criteria define sixteen possible personality types. The type formula is denoted by the first letters of the combination, e.g.

ENFP – Extravert iNtuitive Feeling Perceiving

Once you know the type formula and strengths of the preferences of both partners (or prospective partners), it is possible to calculate the index of compatibility (MatchIndex) between the partners. The MatchIndex represents potential for a successful and mutually satisfying long term relationship.

A high MatchIndex ensures a good and stable long-term relationship. If the partners’ MatchIndex is low, then in the vast majority of cases the relationship will be subject to conflict.

Upon completing the test, you will get a MatchIndex for your couple as well as tips on how to maintain a healthy and stable relationship and avoid “bumps”.« less

Entrepreneur Profiler

Types of business

Starting up or running a small business? Determine the kinds of businesses and franchises that are most favorable for you with the Small Business Entrepreneur Profiler Read more.

One of the most important factors that determine the success of a small business is the right choice of line of business from personality fit standpoint, i.e. the extent to which it corresponds with your personality’s “business type”. We distinguish several basic personality business types, such as business leader, freelancer, analyst etc.

The knowledge of your personality’s business type is crucial. If the nature of the business does not match up with your personality’s business type, you run the risk of losing your business, together with all the money and effort invested, never mind all the frustration and loss of self-confidence incurred. At the end of the test, you will obtain:

  • your personality’s business type and its description including strong and weak points
  • what kind of business partner, in terms of his or her personality’s business type, you can benefit from partnering with
  • a list of the most favourable occupations you are most likely to succeed as a small business, alone or in a partnership
  • some examples of franchises that match up your personality’s business profile

« less

Organizations and Business Users

Types of business

Apply advanced Jung’s, Briggs Myers’ typology for pre-employment assessment, team building, personal and professional development of employees and more. Visit HRPersonality.com

Risk Attitudes Profiler

Types of business

Why does trouble stick to you? Can you control your fortune? How can you leverage the knowledge of your “risk type”? You’ll find the answers in the Risk Attitudes Profile . Read more .

Some people want stability, order and safety in their life. Others have an unconscious drive for a dynamic life, keen excitement, and risk-taking. The reason for many life troubles and lost fortunes is the huge gap between a person’s inherent attitudes toward risk and his or her actual lifestyle, occupation, objectives and how he/she realizes those objectives.

Knowing your own “risk profile” and risk attitude index is crucial because inconsistencies between your natural risk attitudes and your life lead to stress and emotional discomfort, negatively affect your career and business, your private life, and your confidence in your abilities.

At the end of the test, you will obtain your risk attitude index, the description of your risk type, its strong and weak points, ways of personal growth and strategies for success. « less

Career Development Assessment

Types of business

Leverage your personality traits for your success in the workplace, in business, or in a team setting. Complete career development assessment now to obtain your personal Career Development profile

Visionary Test

Types of business

Are you a person with a clear, distinct vision of the future? Can you easily and realistically foresee how things are going to develop? Discover how much of a visionary you are with the Visionary Test

Assertiveness Test

Types of business

Do you actively struggle for your rights and defend your views and opinions, or do you tend to give up defending your rights and comply with the rules imposed on you? Discover how assertive you are and learn how to assert yourself with the Assertiveness Test.

Morals Test

Types of business

Do you adhere to high moral standards all the time or do you change your moral standards based on circumstances? Discover how moral you are with the Morals Test.

Role Model Profiler

Types of business

We intentionally, or unconsciously, try to follow the behaviors of our role models, regardless of how our own traits match up with theirs. It helps to have a role model whose traits are similar to our own. Use the Role Model Profiler to find a role model that shares your personality traits.

Political Performance Indicator

Types of business

Don’t know whom to vote for in the election? Do you want a more objective assessment of presidential candidates Donald Trump and Hillary Clinton? The Political Performance Indicator will help you.

Click Here to get all Humanmetrics tests (except Career Development Assessment ) at the discounted price.



business intelligence (BI)

Types of business

  • Share this item with your network:

Business intelligence (BI) is a technology-driven process for analyzing data and presenting actionable information to help executives, managers and other corporate end users make informed business decisions.

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BI Buyer: Compare Products from Leading Vendors

Planning to invest in a BI tool? You need to know the market first! Explore must-have features, benefits, leading vendors, peer reviews courtesy of TrustRadius on popular products Birst, SAS, TIBCO and Information Builder, and much more.

By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.

You also agree that your personal information may be transferred and processed in the United States, and that you have read and agree to the Terms of Use and the Privacy Policy.

BI encompasses a wide variety of tools, applications and methodologies that enable organizations to collect data from internal systems and external sources; prepare it for analysis; develop and run queries against that data; and create reports, dashboards and data visualizations to make the analytical results available to corporate decision-makers, as well as operational workers.

Business intelligence vs. data analytics

Sporadic use of the term business intelligence dates back to at least the 1860s, but consultant Howard Dresner is credited with first proposing it in 1989 as an umbrella phrase for applying data analysis techniques to support business decision-making processes. What came to be known as BI tools evolved from earlier, often mainframe-based analytical systems, such as decision support systems and executive information systems.

Types of business Comparison of BI and advanced analytics

Business intelligence is sometimes used interchangeably with business analytics; in other cases, business analytics is used either more narrowly to refer to advanced data analytics or more broadly to include both BI and advanced analytics.

Why is business intelligence important?

The potential benefits of business intelligence tools include accelerating and improving decision-making, optimizing internal business processes, increasing operational efficiency, driving new revenues and gaining competitive advantage over business rivals. BI systems can also help companies identify market trends and spot business problems that need to be addressed.

BI data can include historical information stored in a data warehouse, as well as new data gathered from source systems as it is generated, enabling BI tools to support both strategic and tactical decision-making processes.

Initially, BI tools were primarily used by data analysts and other IT professionals who ran analyses and produced reports with query results for business users. Increasingly, however, business executives and workers are using BI platforms themselves, thanks partly to the development of self-service BI and data discovery tools and dashboards.

Types of BI tools

Business intelligence combines a broad set of data analysis applications, including ad hoc analytics and querying, enterprise reporting, online analytical processing (OLAP), mobile BI, real-time BI, operational BI, cloud and software-as-a-service BI, open source BI, collaborative BI, and location intelligence.

BI technology also includes data visualization software for designing charts and other infographics, as well as tools for building BI dashboards and performance scorecards that display visualized data on business metrics and key performance indicators in an easy-to-grasp way.

Data visualization tools have become the standard of modern BI in recent years. A couple leading vendors defined the technology early on, but more traditional BI vendors have followed in their path. Now, virtually every major BI tool incorporates features of visual data discovery.

BI programs may also incorporate forms of advanced analytics, such as data mining, predictive analytics, text mining, statistical analysis and big data analytics. In many cases, though, advanced analytics projects are conducted and managed by separate teams of data scientists, statisticians, predictive modelers and other skilled analytics professionals, while BI teams oversee more straightforward querying and analysis of business data.

Business intelligence data is typically stored in a data warehouse or in smaller data marts that hold subsets of a company’s information. In addition, Hadoop systems are increasingly being used within BI architectures as repositories or landing pads for BI and analytics data — especially for unstructured data, log files, sensor data and other types of big data.

Before it’s used in BI applications, raw data from different source systems must be integrated, consolidated and cleansed using data integration and data quality tools to ensure that users are analyzing accurate and consistent information.

BI trends

In addition to BI managers, business intelligence teams generally include a mix of BI architects, BI developers, business analysts and data management professionals. Business users are also often included to represent the business side and make sure its needs are met in the BI development process.

To help with that, a growing number of organizations are replacing traditional waterfall development with Agile BI and data warehousing approaches that use Agile software development techniques to break up BI projects into small chunks and deliver new functionality to business analysts on an incremental and iterative basis. Doing so can enable companies to put BI features into use more quickly and to refine or modify development plans as business needs change or as new requirements emerge and take priority over earlier ones.

BI for big data

BI platforms are increasingly being used as front-end interfaces for big data systems. Modern BI software typically offers flexible back ends, enabling them to connect to a range of data sources. This, along with simple user interfaces, makes the tools a good fit for big data architectures. Users can connect to a range of data sources, including Hadoop systems, NoSQL databases, cloud platforms and more conventional data warehouses, and can develop a unified view of their diverse data.

Because the tools are typically fairly simple, using BI as a big data front end enables a broad number of potential users to get involved rather than the typical approach of highly specialized data architects being the only ones with visibility into data.

Next Steps

Learn how business intelligence and analytics tools can benefit corporate strategies and operations, and what you should know before buying them.

Continue Reading About business intelligence (BI)

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E-mail Disclaimer: Under Florida law, e-mail addresses are public records. If you do not want your e-mail address released in response to a public records request, do not send electronic mail to this entity. Instead, contact this office by phone or in writing.



Business

Businesses can do much to prepare for the impact of the many hazards they face in today’s world including natural hazards like floods, hurricanes, tornadoes, earthquakes and widespread serious illness such as the H1N1 flu virus pandemic. Human-caused hazards include accidents, acts of violence by people and acts of terrorism. Examples of technology-related hazards are the failure or malfunction of systems, equipment or software.

Ready Business will assist businesses in developing a preparedness program by providing tools to create a plan that addresses the impact of many hazards. This website and its tools utilize an “all hazards approach” and follows the program elements within National Fire Protection Association 1600, Standard on Disaster/Emergency Management and Business Continuity Programs. NFPA 1600 is an American National Standard and has been adopted by the U.S. Department of Homeland Security.

The five steps in developing a preparedness program are Program Management, Planning, Implementation, Testing and Exercises, and Program Improvement. Find out more about the five steps below.

Program Management

  • Organize, develop and administer your preparedness program
  • Identify regulations that establish minimum requirements for your program

Find more information on Program Management here.

Planning

  • Gather information about hazards and assess risks
  • Conduct a business impact analysis (BIA)
  • Examine ways to prevent hazards and reduce risks

Find more information on Planning here.

Implementation

Write a preparedness plan addressing:

  • Resource management
  • Emergency response
  • Crisis communications
  • Business continuity
  • Information technology
  • Employee assistance
  • Incident management
  • Training

Find more information on Implemenation here.

Testing and Exercises

  • Test and evaluate your plan
  • Define different types of exercises
  • Learn how to conduct exercises
  • Use exercise results to evaluate the effectiveness of the plan

Find more information on Testing and Exercises here.

Program Improvement

  • Identify when the preparedness program needs to be reviewed
  • Discover methods to evaluate the preparedness program
  • Utilize the review to make necessary changes and plan improvements

Find more information on Program Improvement here.



Business

Businesses can do much to prepare for the impact of the many hazards they face in today’s world including natural hazards like floods, hurricanes, tornadoes, earthquakes and widespread serious illness such as the H1N1 flu virus pandemic. Human-caused hazards include accidents, acts of violence by people and acts of terrorism. Examples of technology-related hazards are the failure or malfunction of systems, equipment or software.

Ready Business will assist businesses in developing a preparedness program by providing tools to create a plan that addresses the impact of many hazards. This website and its tools utilize an “all hazards approach” and follows the program elements within National Fire Protection Association 1600, Standard on Disaster/Emergency Management and Business Continuity Programs. NFPA 1600 is an American National Standard and has been adopted by the U.S. Department of Homeland Security.

The five steps in developing a preparedness program are Program Management, Planning, Implementation, Testing and Exercises, and Program Improvement. Find out more about the five steps below.

Program Management

  • Organize, develop and administer your preparedness program
  • Identify regulations that establish minimum requirements for your program

Find more information on Program Management here.

Planning

  • Gather information about hazards and assess risks
  • Conduct a business impact analysis (BIA)
  • Examine ways to prevent hazards and reduce risks

Find more information on Planning here.

Implementation

Write a preparedness plan addressing:

  • Resource management
  • Emergency response
  • Crisis communications
  • Business continuity
  • Information technology
  • Employee assistance
  • Incident management
  • Training

Find more information on Implemenation here.

Testing and Exercises

  • Test and evaluate your plan
  • Define different types of exercises
  • Learn how to conduct exercises
  • Use exercise results to evaluate the effectiveness of the plan

Find more information on Testing and Exercises here.

Program Improvement

  • Identify when the preparedness program needs to be reviewed
  • Discover methods to evaluate the preparedness program
  • Utilize the review to make necessary changes and plan improvements

Find more information on Program Improvement here.



Personality Test – Jung, Briggs Myers Types

Types of business

Take free, tried-and-true personality test to identify your Jung, Briggs Myers personality type and obtain its description. Discover career choices and schools suitable for your type. Read more.

Carl Jung characterized people using three criteria:

  • Extraversion – Introversion
  • Sensing – Intuition
  • Thinking – Feeling

Isabel Briggs Myers added a fourth criterion:

The first letters of the different combinations of the four criteria denote personality type formula. For example:

ISTJ – I ntrovert S ensing T hinking J udging

Upon completing the Jung Typology Test you will obtain your type formula, the strength of each of the preferences and the description of your type. It may help you to identify your lifestyle both in general, and with respect to specific areas of activity. You will also obtain a list of the most suitable career choices based on your personality, along with some educational institutions where you can receive a relevant degree or training. « less

Jung Marriage Test

Types of business

Are you compatible with your soul mate? Looking for a perfect dating partner? Will you have a good and stable relationship? The answer is in the Jung Marriage Test . Read more .

A good and stable relationship between partners is conducive to a happy marriage, and we often don’t know what the underlying cause of our conflicts is. The ability to assess the likelihood of a healthy long term relationship is one of the main challenges in dating and matchmaking. Jung Marriage Test™ addresses this challenge. The test identifies potentially successful and potentially problematic matches by comparing and analysing personality types of the partners. Personality type is defined by the three criteria introduced by Carl Jung:

  • Extraversion – Introversion
  • Sensing – Intuition
  • Thinking – Feeling

And the fourth criterion added by Isabel Briggs Myers *:

The different combinations of these four criteria define sixteen possible personality types. The type formula is denoted by the first letters of the combination, e.g.

ENFP – Extravert iNtuitive Feeling Perceiving

Once you know the type formula and strengths of the preferences of both partners (or prospective partners), it is possible to calculate the index of compatibility (MatchIndex) between the partners. The MatchIndex represents potential for a successful and mutually satisfying long term relationship.

A high MatchIndex ensures a good and stable long-term relationship. If the partners’ MatchIndex is low, then in the vast majority of cases the relationship will be subject to conflict.

Upon completing the test, you will get a MatchIndex for your couple as well as tips on how to maintain a healthy and stable relationship and avoid “bumps”.« less

Entrepreneur Profiler

Types of business

Starting up or running a small business? Determine the kinds of businesses and franchises that are most favorable for you with the Small Business Entrepreneur Profiler Read more.

One of the most important factors that determine the success of a small business is the right choice of line of business from personality fit standpoint, i.e. the extent to which it corresponds with your personality’s “business type”. We distinguish several basic personality business types, such as business leader, freelancer, analyst etc.

The knowledge of your personality’s business type is crucial. If the nature of the business does not match up with your personality’s business type, you run the risk of losing your business, together with all the money and effort invested, never mind all the frustration and loss of self-confidence incurred. At the end of the test, you will obtain:

  • your personality’s business type and its description including strong and weak points
  • what kind of business partner, in terms of his or her personality’s business type, you can benefit from partnering with
  • a list of the most favourable occupations you are most likely to succeed as a small business, alone or in a partnership
  • some examples of franchises that match up your personality’s business profile

« less

Organizations and Business Users

Types of business

Apply advanced Jung’s, Briggs Myers’ typology for pre-employment assessment, team building, personal and professional development of employees and more. Visit HRPersonality.com

Risk Attitudes Profiler

Types of business

Why does trouble stick to you? Can you control your fortune? How can you leverage the knowledge of your “risk type”? You’ll find the answers in the Risk Attitudes Profile . Read more .

Some people want stability, order and safety in their life. Others have an unconscious drive for a dynamic life, keen excitement, and risk-taking. The reason for many life troubles and lost fortunes is the huge gap between a person’s inherent attitudes toward risk and his or her actual lifestyle, occupation, objectives and how he/she realizes those objectives.

Knowing your own “risk profile” and risk attitude index is crucial because inconsistencies between your natural risk attitudes and your life lead to stress and emotional discomfort, negatively affect your career and business, your private life, and your confidence in your abilities.

At the end of the test, you will obtain your risk attitude index, the description of your risk type, its strong and weak points, ways of personal growth and strategies for success. « less

Career Development Assessment

Types of business

Leverage your personality traits for your success in the workplace, in business, or in a team setting. Complete career development assessment now to obtain your personal Career Development profile

Visionary Test

Types of business

Are you a person with a clear, distinct vision of the future? Can you easily and realistically foresee how things are going to develop? Discover how much of a visionary you are with the Visionary Test

Assertiveness Test

Types of business

Do you actively struggle for your rights and defend your views and opinions, or do you tend to give up defending your rights and comply with the rules imposed on you? Discover how assertive you are and learn how to assert yourself with the Assertiveness Test.

Morals Test

Types of business

Do you adhere to high moral standards all the time or do you change your moral standards based on circumstances? Discover how moral you are with the Morals Test.

Role Model Profiler

Types of business

We intentionally, or unconsciously, try to follow the behaviors of our role models, regardless of how our own traits match up with theirs. It helps to have a role model whose traits are similar to our own. Use the Role Model Profiler to find a role model that shares your personality traits.

Political Performance Indicator

Types of business

Don’t know whom to vote for in the election? Do you want a more objective assessment of presidential candidates Donald Trump and Hillary Clinton? The Political Performance Indicator will help you.

Click Here to get all Humanmetrics tests (except Career Development Assessment ) at the discounted price.



types of business

Types of business

How to Calculate Marginal Revenue

Types of business

What Are the Four Types of Utility Marketing?

Types of business

What Is Wrong When the iPhone Screen Goes Black Stays Like That?

Editor’s Picks

Types of business

How to Calculate Accumulated Depreciation of Inventory

Types of business

5 Most Common Advertising Techniques

Types of business

Examples of Employee Development Goals

Types of business

How to Make the Check In Feature Work for Facebook

Types of business

How to Delete a Table in Google Docs

Types of business

Examples of Product Life Cycle Phases

Types of business

How to Journalize Dishonored Notes

Types of business

Horizontal Vertical Marketing Conflicts

Types of business



#business investment

#

The Two Types of Investments You Can Make In a Small Business

Equity and Debt Are The Choices on the Small Business Investment Menu

When you make a small business investment, you have two choices: Do you take equity (an ownership stake) or debt (lend money in exchange for interest income and future repayment)? Both have their own advantages and disadvantages. Betsie Van Der Meer/Taxi/Getty Images

Updated August 22, 2016

Investing in a small business has always been, is currently, and most likely always will be one of the most popular ways individuals and families begin the journey to financial independence ; a way to create, nurture, and grow an asset that, when intelligently run under the right conditions, throws off surplus cash to provide not only a good standard of living, but to fund other investments. Still, it isn t uncommon, at least in nations with an entrepreneurial history such as the United States, for a small business owner to have never owned a publicly traded share of stock or a mutual fund. opting, instead, to put everything into their own restaurant, dry cleaning business, or sporting goods store.

Frequently, this small business grows to represent the most important financial resource the family owns, other than their primary residence.

In today s economic and political climate, these types of small business investments are often structured as either a limited liability company or a limited partnership. with the former being the most popular due to the fact it combines many of the best attributes of corporations and partnerships. In years past, sole proprietorships or general partnerships were more popular, which provide no protection for the owners personal assets outside of the company.

Whether you are considering investing in a small business by founding one from scratch or buying into an existing company, there are typically only two types of positions you can take: 1.) Equity, or 2.) Debt. Though there may be countless variations, all investments come back to those two foundations.

Equity Investments in Small Businesses

When you make an equity investment in a small business. you are buying an ownership stake. Equity investors provide capital, almost always in the form of cash, in exchange for a percentage of the profits and losses. The business can use this cash for a variety of things, including funding capital expenditures to expand, reducing debt, buying out other owners, building liquidity, or hiring new employees.

In some cases, the percentage of the business the investor receives is proportional to the total capital he or she provides. For example, if you kick in $100,000 in cash and other investors kick in $900,000, totaling $1,000,000, you might expect 10% of any profits or losses because you provided 1/10th of the total money. In other cases, especially when dealing with an established business or one put together by a key manager, this would not be the case. Consider the investment partnerships Warren Buffett ran in his 20 s and 30 s. He had limited partners contribute nearly all of the capital, but profits were split 75% to limited partners, in proportion to their overall share of the capital, and 25% to him as the general partner, despite having put up very little of his own money. The limited partners were fine with this arrangement because Buffett was providing expertise.

An equity investment in a small business can result in the biggest gains, as well as the most risk. If expenses run higher than sales, the losses get assigned to you.

A bad quarter, or year, and you might see the company fail or even go bankrupt. However, if things go well, your returns can be enormous. Virtually all of the research on millionaires in the United States shows that the single biggest classification of millionaires are self-made business owners. If you want to rank among the top 1% of wealth. owning a profitable business in a niche market that churns out dividends each year is your best chance, statistically.

Debt Investments in Small Businesses

When you make a debt investment in a small business, you loan it money in exchange for the promise of interest income and eventual repayment of the principal. Debt capital is most often provided either in the form of direct loans with regular amortization or the purchase of bonds issued by the business. which provide semi-annual interest payments mailed to the bondholder.

The biggest advantage of debt is that it has a privileged place in the capitalization structure. That means if the company goes bust, the debt has priority over the stockholders (the equity investors). Generally speaking, the highest level of debt is a first mortgage secured bond that has a lien on a specific piece of valuable property or an asset, such as a brand name. For example, if you loan money to an ice cream shop and are given a lien on the real estate and building, you can foreclose upon it in the event the company implodes. It may take time, effort, and money, but you should be able to recover whatever net proceeds you can get from the sale of the underlying property that you confiscate. The lowest level of debt is known as a debenture, which is a debt not secured by any specific asset but, rather, but the company s good name and credit.

Which Is Better: An Equity Investment or a Debt Investment?

There is no simple answer to this question. If you had been an early investor in McDonald s and bought equity, you d be rich. If you had bought bonds, making a debt investment, you would have earned a decent, but by no means spectacular, return on your money. On the other hand, if you buy into a business that fails, your best chance to escape unscathed is to own the debt, not the equity.

All of this is complicated by an observation that famed value investor Benjamin Graham made in his seminal work, Security Analysis. Namely, that equity in a business that is debt-free cannot pose any greater risk than a debt investment in the same firm because, in both cases, the person would be first in line in the capitalization structure.

The Preferred Equity Debt Hybrid

Sometimes, small business investments straddle the ground between equity investments and debt investments, modeling preferred stock. Far from offering the best of both worlds, preferred stock seems to combine the worst features of both equity and debt; namely, the limited upside potential of debt, with the lower capitalization rank of equity. There are always exceptions to the rule.