Working Capital

Keeping Your Business On The Right Track

A business plan is a roadmap that sets out your route for the development of your business. It doesn’t tell you just about the current state of the business, its strengths and its weaknesses, it will also show up the opportunities and what needs to be done to stay ahead of the competition.

You might think you know all this now and don’t have to write it down. But what if something happened to you and someone else had to take over the operation? What would they need to know so it was still there and profitable when you returned? This is the kind of information contained in your business plan and its good insurance against the unknown.

It clarifies your objectives

What are your goals? These will be in your business plan, the original goals you had plus any additional objectives that arise in the course of business. Your business plan spells out the goals and shows the milestones along the way that tell you how close you are to achieving them. Goals are flexible and can be as varied as achieving a certain level of turnover or simply acquiring new customers. It’s important, however, that each is presented in the same way – as a target with milestones or indicators that will let you measure how near you are to achieving it.

Protecting Your Most Important Assets. Your Intellectual Property Rights.

When you think about protecting company assets, several things probably come straight to mind, such as land, buildings, machinery, inventory and vehicles. In many instances companies overlook their intellectual property (IP), which can be one of their most valuable assets. By understanding the different types of intellectual property and how they can be protected against infringement you can help your business stay ahead of the competition.

Your business 'intellectual property' can include:

Ten Cash Flow Tips

1. Know your business’ balance sheet thoroughly.

This may sound obvious, but, as your accountant can confirm, many business people don’t know how cash flow works and its significance to keeping their operation afloat. Many owners focus on their business’ profit and loss statement alone. It’s a potentially fatal mistake because healthy profits can mask an impending cash flow crisis. Profit and loss statements don’t usually contain the information required to make an adequate cash flow projection. For that, you’re going to need a structured balance sheet that includes all the influencing factors including debts, interest payments, inventory and so on. This is the basis for your cash flow projection which represents an “educated guess” at the likely incomings and outgoings over the period of time you have selected to map out.

Cash Flow Quickeners

Cash flow is often called "the lifeblood of a business," and for several good reasons. But the flow of cash into most businesses is uneven and there can be times when a constrained cash flow creates serious problems, even if the long term situation is positive.

There are, however, ways to improve the cash flow of any small business and remove some of the worries about bills not being paid or not having enough on hand to pay wages. These mainly involve no more than adjustments to what you're already doing and so aren't difficult to implement.

Keep inventories as low as possible

Inventories are expensive in many ways. There's the interest paid on money borrowed to acquire items that are awaiting sale. There are also the costs for storage space and handling, as well as insurance expenses and the "opportunity cost" of what money spent on inventory could be earning elsewhere. In some cases, inventories are so badly managed that much of the material becomes obsolete before it can be sold.

Why More Businesses Are Turning To Online Training

As more people turn to the internet for news, entertainment and social interaction, online training, also known as e-learning, is being chosen by more businesses to deliver the knowledge their employees need to achieve organizational goals. With many benefits to both a business and its employees, it’s easy to understand why e-learning continues to grow in popularity.

Benefits to the organization

Lower cost. Research has shown that e-learning is 40-60% less expensive than classroom learning. When employees learn online there are no instructor fees, room costs, and travel and meal expenses. For general knowledge, there are many “off-the-shelf” solutions that are very cost-effective, while customized e-learning programs are often more economical than in-class training.

Consistency. For companies with many locations, employees may receive inconsistent training content delivered with variable effectiveness depending on their particular instructor’s knowledge, interests and capabilities. The standardization of e-learning alleviates these issues.

Being Smart About Business Loans

Most businesses operate to some extent on borrowed money, but borrowing too much means you’re paying more in interest than you need to. Borrowing too little means you’re under financed and won’t have enough capital to accomplish what you want to do. That’s why you have to work out, as near as possible, just how much money you will really need, and when you’ll need it, before you talk to anyone about borrowing funds for your business. And of course you’ll also have to work out how to repay what you’re borrowing. Here’s a process for estimating your borrowing requirements.

Check your business plan

Start by taking a good look at your business plan. It should be an overall guide to both the amount you need to borrow and to the times when funds will be needed. And if you don’t have a business plan that tells you this kind of information, create one before going any further.