Business Barriers
No business is instantaneously successful. There are multiple obstacles referred to as barriers all owners and managers have to overcome. There are three primary groups of barriers for every business out there.
Finance
Finance is the part of business whereby an individual or a business matches capital resources to needs via various tools of engagement including loans, equity investments, or hybrids. Traditionally finance is thought of as the banking industry but encompasses insurance and brokerage firms too.
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. Compare the production and sales cycle for an automobile to that of ice cream.
Discounts – Various Meanings in Business
The term ‘discounts’ is a broad and varied meaning word when it comes to use in business. It literally has four distinct definitions. Each definition is used within a certain context of business. The first and most dollar expensive use is with original issue discount related to bonds in the market. The second use and most common is as an incentive in business.
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 and sales flow; and 3) planning the inflows and uses (outflows) of cash.
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 this relatively volatile environment an investor can participate for a relatively low investment dollar amount.
Cash Flow – 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.
Front and Back Offices -Differences
The terms ‘Front’ and ‘Back Office’ are used in business to refer to the form of office work conducted. In general the front office interacts with customers/clients and handles the day-to-day activity. The back office is where management leads the organization and handles the underlying financial affairs.
Don’t Flip Them, Finance The Flip!
The rage in real estate for the last 17 years has been flipping houses. Simple tenet of buy low, fix it up and sell high – House Flipping Business Dynamics. What if I told you there was more money to be made with less risk and very little work if you simply finance the deal? You would say I’m crazy. Well, I’m going to show mathematically that I know what I’m talking about.
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 Cross addressing disaster relief in the aftermath of a major natural tragedy.
Syndication
Syndication refers to a group of individuals or business entities working together to achieve a set goal(s). In business, the goals vary. The most common goal is to acquire capital and use the combined power of the group in exercising that capital for a better than average rate of return.