11 slides excluding reference
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MGT418Week4FinancialManagementPresentation3.pptxFinancial Management Presentation
Outline
Research three critical financial issues that start-up or newly-acquired businesses may face.
Describe potential resolutions for these issues.
Discuss the importance of financing to a new business
Describe best practices for handling working capital and cash flow for a new business.
Financial Issues
A financial problem or issues is a situation in which you are not able to meet your bills on time or afford necessary basic needs
("What Is Financial Problems ", n.d.).
Before going further into detail on a business financial issues, I should explain what financial issue consists of, a financial problem or issues is a situation in which you are not able to meet your bills on time or afford necessary basic needs ("What Is Financial Problems ", n.d.).
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Critical Financial Issues
Cash Flow
Unexpected Expenses
High Interest Rates/Taxes
Debt Service
:
("Business Financing Problems ", 2018).
When starting-up or newly-acquired businesses there are many financial issues that the company may face. The three critical financial issues that a start-up or a newly-acquired business may face is Cash Flow, Unexpected Expenses, High Interest Rates, and Debt Service. The most important issue to any small business entrepreneur is cash flow. Just because sales are good doesn’t mean you’re in the clear. If your money doesn’t come in fast enough to pay your bills when they are due, you’ll have cash flow problems. It does not help a small business to have a profitable upcoming quarter already signed on the dotted line, if the payroll for this Friday does not have sufficient funds to pay your employees. The business must be especially careful with this timing. Maintain lines of credit sufficient to keep your cash flow healthy as necessary and keep a rainy-day account if possible. Use your available credit when you need to tide over your short-term cash crunch but keep a close eye on your long-term profitability to ensure that your overall liquidity is not threatened by the change in costs. Knowing how much money you owe isn’t enough to avoid potential debt problems. The interest on your debt can keep you from getting ahead without realizing it if you don’t analyze your debt-service issues. Every small business should have a tax plan to reduce its annual payments. How you incorporate, whether you use employees or contractors and what type of benefits you provide all affect your tax burden. Missing quarterly payments or filing late or incorrect returns can result in penalties, fines or an expensive audit ("Business Financing Problems ", 2018).
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Potential Resolutions
Create a cash flow budget
Plan for what your small business needs now and for what it may need in the future
Make sure to track your expenses and talk to your financial advisors.
Keep your accounts, and get ready for rainy days.
Set Financial Goals
("Financial Challenges Businesses", 2017).
Some potential resolutions for these issues would consists of creating a cash flow budget to determine when you’ll have large bills to pay and when you’ll need to borrow cash or use credit to meet your obligations. Plan for what your small business needs now and for what it may need in the future, make sure to track your expenses and talk to your financial advisors and Keep your accounts, and get ready for rainy days, and Set Financial Goals In small businesses and startups, the facing financial issues somewhere down the line is extremely high. You need to accept this eventuality and plan for it. It’s always better to keep a percentage of your total startup capital set aside in case of emergencies, rather than pouring it all into your business from the get go. And While startups take time to get off the ground, you still need to build a timeline for your business. Having these projections in place gives you direction, as well as benchmarks to evaluate how your business is progressing ("Financial Challenges Businesses", 2017).
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Importance of Financing
Educate Entrepreneur
Promoting and mobilizing individual
Manage risk in businesses
Operating without investment capital or borrowed money is more difficult
Daily operations and to meet needed expenses and payments.
Many entrepreneurs go about the task of raising capital haphazardly, because they lack experience in this area and because they don’t know much about their choices.1 This shortfall may cause a business owner to place too much reliance on some sources of capital and not enough on others. Entrepreneurs need to have as full an understanding as possible of the alternatives that are available in regard to raising money. And raising money is a balancing act. Although a venture may need to raise money to survive, its founders usually don’t want to deal with people who don’t understand or care about their long-term goals. The need to raise money surprises a number of entrepreneurs, in that many of them launch their firms with the intention of funding all their needs internally. Commonly, though, entrepreneurs discover that operating without investment capital or borrowed money is more difficult than they anticipated. Because of this, it is important for entrepreneurs to understand the role of investment capital in the survival and subsequent success of a new firm. Businesses need finances for daily operations and to meet essential expenses and payments.
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Start-Ups Need Funding
Capital and Cash Flow
Analyze fixed and variable costs
Examine interest payment
Manage inventory.
Improve your receivables collection processes
Reinvest in your business.
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Monitor your cash flow carefully
Review your cash flow management system often
Always maintain a cash reserve
Manage funds better
Collect receivables immediately
Control expenses carefully.
("Effective Management Strategies For Small Businesses", n.d.).
The best practices for handling working capital and cash flow for a new business is putting into work such as Monitor your cash flow carefully, review your cash flow management system often, Always maintain a cash reserve, Manage funds better, Collect receivables immediately, Control expenses carefully. Analyze fixed and variable costs, Examine interest payment, Manage inventory. Improve your receivables collection processes and Reinvest in your business ("Effective Management Strategies For Small Businesses", n.d.).
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Capital & Cash Flow
Thank You
Question
& Concerns ???
References
Business Financing Problems (2018). Retrieved from https://smallbusiness.chron.com
Effective Management Strategies for Small Businesses(n.d.). Retrieved from https://www.firmofthefuture.com/
Financial Challenges Businesses (2017). Retrieved from https://www.stlouisfed.org
What is Financial Problems (n.d.). Retrieved from https://www.igi-global.com
