Business and Finance

Investment Diversification

If your money for you, but we’re in a recession, and it is all about diversification of investment in those days. You can not talk to all your eggs in one basket like that. You must be smart and you need to diversify. You must consider all options and use them as much as possible.

Stocks

Stocks are risky these days, but they are always an option. The fact is that … There is no overnight success stories to get rich quickly shares. It’s all about playing safe. If you Google Mart or whale or something like investment, a profit is guaranteed. Develop and expand these companies, while the yield is much longer than investing in a number of small businesses that could explode during the night, it is much safer and less risky.

Buy and sell

There are many things you buy or sell, can almost double your money. It depends on what you do best. If your consumer electronics, please visit the auction sites, and the dead video game systems and computer repair, buy and sell in the same place twice what you pay for. You can do the same thing in cars, buy clunkers and repair. If you invest money you can buy old houses and go on the market.

Starting a Business

you may think, this is risky in this day and age, but the truth is the internet and make your own case for zero money. No business credit, no rent, a business before, you do not even need to buy a product directly. You can start with a tee-shirt design business on sites like CafePress, you get the money you make from here to start your own shirts to buy sales. You could make videos and a video sharing site that shares ad revenue with content providers to provide. There are many opportunities for a company without charge or to start a small investment, then review it.

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Cash Flow Management Issues Relating To Funding And Investment In A Credit Crunch

There is a fundamental difference between cash flow and net profit. Net profit is the bottom line of the profit and loss account measuring the net growth in financial value. Cash is the business liquidity and closely related to the changes in the value of the current business assets in the balance sheet representing the amount of money the business has at its disposal to generate further business.

Stock control management

The objective is to reduce the level of stock which uses working capital within the business.

Stock control is a major potential area where every business can become more efficient in its cash requirements. Stock comprises of four main elements, raw materials, work in progress, finished goods and consumable stores.. Each area can be managed to reduce the working capital requirement with an appropriate stock management system being adopted.

Raw material stocks can be reduced by setting a just in time stock control policy, negotiating better delivery schedules and reviewing order quantities with a view to reducing the value of stock held before it is required for production or sales.

Work in Progress is mainly a manufacturing area and governed by the manufacturing process however a review of the policies can produce efficiencies if excess products are left lying around waiting to be finished or excess materials are on the shop floor waiting to be used.

Standard levels of finished stock should be set to satisfy the requirement to supply all customers on time but avoid excess stock. Delivery schedules might be reviewed to ensure delivery times can be shortened to reduce the requirement for higher stock levels. Ideally the stock should come in one door and be invoiced out the other door the same day.

In some businesses consumable stores may be significant and where any significant working capital investment is required the policy should be reviewed to save cash by introducing stock control measures.

Profit margin management

The objective is to sell more cash flow friendly products.

Given a range of products within a business the gross profit and stock requirements and funding requirements may be variable. During a credit crunch the products offering the highest gross profit, fastest turn round and most economic use of working capital would offer the best options to reduce the credit crunch effect.

A sound management policy would be to review all products in terms of the working capital requirements and levels of gross profit margins with a view to concentrating sales growth in these product areas.

Financial investment management

The objective is to reduce the draining effect of capital investment in the business to protect the working capital requirements.

There are many cash flow issues in this area but consideration may be given to how fixed asset purchases are financed. In days of the credit crunch it may be safer to lease or buy major items on hire purchase than to buy outright. Different and alternate methods of financing investments can broaden the funding options open to a business and reduce the strain on working capital.

Consideration might be given to delaying the purchase of non essential renewable assets. For example the business may have a policy to replace the delivery vehicle or representatives car every three years. Delaying the replacement by six months saves valuable cash resources and protects the cash flow. Read the rest of this entry »

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