Discussion 2 - Need It In 20 Hours Max

In the world of business, cash is often the key to the success of a firm. While there are other ways to obtain equity and value in a company, cash is the factor that allows a business to continue to make investments and financial decisions which allow for its growth and success in the future. However, a reality for many businesses, especially small businesses starting out and working on growth, is that cash flows may be tough to come by as they are focusing on building a brand and establishing a name for themselves. There are options for struggling businesses in need of a temporary cash increase, though. First, since many small businesses are being rejected for bank loans, there are alternative methods by which banks and capital companies are providing money to firms with the agreement that they will receive a percentage of future revenues from those companies. In order to maintain the affordability of these deals, the company receiving the capital is required to make payments based on month cash flows, which allows that company to only pay what they can afford. Another method for increasing cash flow is to sell excess capacity of operations to other firms which may accept alternative currencies in exchange for cash, which allows the company in need of cash to utilize resources already available for cash now. Finally, crowdfunding is another alternative method for increasing cash flows, and is also a method of advertising to gain additional visibility for name and purpose of the company (Bagga, 2018).

During this time when cash flow is limited, it is important to express to stakeholders what is being done in the interim, and what the long term plan is with regard to the project being worked and how it will provide positive impacts to the company and the industry alike. Being transparent with the stakeholders is key to their continued support and confidence in the firm (Boyce, 2015).

References

Bagga, B. (2018, July 10). 3 Unique Ways Small Businesses Can Increase Cash Flow. Retrieved

from https://www.business.com/articles/increase-cash-flow/

Boyce, C. (2015, February 6). How to Explain Cash Flow to Your Stakeholders. Retrieved from

https://www.entrepreneur.com/article/242345