Recent Articles

Finance

Cash is theFinance life blood of every business, without cash, you are dead in the water. Fuel your company with cash, learn how to properly maintain sufficient funds to operate from time period to time period. Learn about cash flow, how to calculate cash flow, where to find cash, negotiate cash agreements and if it all works out, withdraw cash for the profits you have earned.

This site and this page is designed to help provide information, guidance, and help for the small business owner.  There are no quick answers to your questions and if you desire one … well, this is not the site.  These articles are in-depth and educational in nature.  Read them with the idea of learning like you did in school.

For those of you interested in finding financing for your business, may I suggest the following site:  Dabney Financial

FEATURE ARTICLES:

  • Cash Counts

    “How are you going to pay for this?” I asked? My client responded, “I still have checks” which meant he didn’t have any cash. He had the ability to write a check but no cash to back it up. I can’t stress enough how important cash is in any business operation. The reality is, cash ...
  • How to Find Investment Capital – The Family Connection

    Twenty Dollar billThere is one responsibility of all business entrepreneurs that is loathed more than any other.  It’s asking for money.  First off, you have to find financial resources and then you have to ask for money.  This article is dedicated to finding money and how to ‘ask’ for the money from a family member.  It is easier ...
  • How to Find Investment Capital – The Vendor Connection

    All vendors look for avenues to expand their market share or maintain their market share.  Many times it is to their benefit to provide start-up capital to potential point of sale opportunities.  If they can assure themselves of a long term buyer of their product or service, then they will give serious consideration to a new ...
  • The Different Types of Bank Loans

    Bank LoanThere are many different types of bank loans, each having their own respective purpose.  All bank loans are categorized into two distinct groupings; secured and unsecured loans.  Within in each category of loans there are several different sub-types of bank notes used to make a loan.  Both categories require the owner of the small business ...
  • Inventory – How to Finance

    In financing a small business, there are a multitude of tools available.  One way to finance inventory is by using the 30 day pay program with your vendors.  Another tool is seasonal payment program and a third tool is exercising a line of credit tied to receivables or sales history.  The following sections describe and ...
  • Small Business Administration – Capital, Development & Contracting

    The Small Business Administration (SBA) is an agency of the federal government that provides loans, counseling and procurement opportunities with the federal government.  Simply stated: “The SBA helps Americans start, build, and grow businesses”.  No other resource exists that is as dynamic and beneficial to the small business owner as the SBA. Most small business owners ...
  • Common Stock – Definition

    A document indicating ownership in a corporation is often referred to as common stock.   It identifies an equity position in a business.  The document or certificate is commonly referred to as a security and provides certain rights to the holder (owner).  These rights include voting and residual value upon liquidation of the company. There is a ...
  • Insolvency and Bankruptcy – Know the Difference

    Every business owner needs to know the difference between insolvency and bankruptcy.  Often these two terms are misunderstood and improperly used in conversation.  You need to know their correct meaning because both are used in civil law and both have different issues to address during the process.  In addition, understanding these two terms builds a ...
  • The Federal Reserve System

    No other federal government creation is more misunderstood than the Federal Reserve System.  The Federal Reserve’s primary purpose is to act as the central banking system for the United States.  Formed in 1913, the Federal Reserve was tasked by Congress with three primary functions.  One – maximize employment in the United States.  Two – stabilize ...
  • Lease or Buy

    Fixed assets are normal in business operations.  However, financing those assets is the critical issue.  If you buy the asset outright, you tie up capital that can be used to expand operations or keep overall costs low in operating the company.  You can buy the asset paying a down payment and borrowing funds from a ...
  • Capital Account – Business Partnerships and Limited Liability Companies

    A ‘Capital Account’ is a term used in partnership and in limited liability company business formats.  It refers to the individual balances in the equity section of the balance sheet.  The basic formula for value is beginning balance plus contributed capital plus earnings from the current accounting period less any withdrawals.  However, there is more ...
  • Recourse and Nonrecourse Types of Loans

    When a lending institution loans money they mostly fear nonpayment of the debt.  Often these loans were implemented due to a third party’s endorsement.  To qualify the endorsement the bank may require the third party guarantee the debt.  This is known as having ‘Recourse’ in getting the debt paid.  When the third party is completely ...
  • Crowdfunding in Small Business

    The process of collecting a large pool of investors, each contributing or investing a small amount of dollars for a highly focused project is referred to as crowdfunding.  The crowd is financing the project or goal.  This is very similar to how large non-profits address significant events worldwide.  A good example is the American Red ...
  • Convertible Debt

    In poker, deuces are often called the wild card.  You can use the card as a ‘Two’ or as any other card in the deck.  In effect, you can convert the card to something else.  Well, convertible debt uses the same principle in business.  The holder of the convertible instrument has a choice, continue to ...
  • Cash Flows – Introduction

    Insolvency is defined as the inability to pay liabilities as they come due. To meet the demand of creditors cash is required. For most small businesses there are as little as a single source to multiple sources of cash. Think about these two extreme examples: * Food Vendor  – an extremely small business with one primary source of cash ...
  • Working Capital

    Cash is the lifeblood of every business. Without cash a business operation can come to a standstill. Cash is one component of working capital, a term referring to current assets (Gross Working Capital) less payables and accrued expenses. The term is usually used in finance referring to the dollar value of flexibility management has to address expansion or endure ...
  • Penny Stocks- Introduction

    Those small publicly traded businesses with share prices of less than $5 and capitalization of less than $50 million are referred to as penny stocks. Penny stocks may trade on any of the major stock exchanges. For investors the risk is generally greater and the chance of instant success is remote at best. To counter ...
  • Working Capital Management – Fundamentals

    Working capital management is a function of finance whereby management ensures adequate cash is available to meet operational needs over the typical working capital cycle.   The underlying elements of working capital management include 1) understanding the different forms of current assets and current liabilities and their corresponding cash cycles; 2) recognizing the relationships of production ...
  • Debt or Equity in Small Business – Fundamentals

    Small business books and manuals explain the formula used to determine whether additional debt increases the return for investors commonly known as return on investment (ROI).   I find this laughable in our modern economic times given the low cost of financing.   For well qualified individuals, money can be borrowed at less than 6% ...
  • Working Capital Cycle

    The college textbook definition of working capital is current assets minus payables and accrued expenses.  The term explains the dollar value of flexibility a business operation has to take advantage of immediate opportunities or endure sudden or long-term setbacks.  Since it is a balance sheet based formula the value is a function of a moment ...
  • Working Capital Management – Production and Sales Flow

    There is no single management style to address the multitude of working capital cycles existing in the various business sectors and the underlying industries.   Taking raw resources and turning them into consumer goods has different time frames depending on the item produced.   In addition, the sales period varies from product to product.   ...