Working Capital Management
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- Date Submitted: 06/19/2014 01:12 AM
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Working Capital Management
Strategies of Business Owners
As future business owners it is always to their advantage to hear strategies and past experiences of current business owners has and what lessons they have to share from personal practices. Alan Litchman and Lara Trust, both co-president and owner of Finagle-a-Bagel located in New England, share their strategies they used to manage their working capital along with some of their experiences.
Litchman begins sharing the first thing you, as a business owner, need to really understand, which is banking relationships. Owners have to start with a good bank, and then they can really understand how to model their business plan. Other advice he gives is as an owner at the beginning, you must understand that you will take on debt. Also, understand that location is vital when you are selling any type of product or service, and you have to know your customers and what they will buy so the cash flow will allow the business to service any debt. Understanding what the time frame is for the amount of debt that the business will take on is another pointer they share in the video along with understanding the payback schedule. Other helpful pointers they have for future business owners is to decide what it is going to cost you to borrow money, know what the opportunity cost of using your own money that might be in the stock market when you are putting it into a business. These are decisions that a business owner will need to make frequently.
Trust and Lithchman continues and shares their point of view on long term and short term goals and their experience with the recession. Litchman mentions that in small business you never have any monies, but you know in the long term it is better to own things. The owners of FAB explains how they knew by owning real estate instead of renting in New England where real estate is scarce, benefitted them, because if the owners have a problem they have equity. In...
Strategies of Business Owners
As future business owners it is always to their advantage to hear strategies and past experiences of current business owners has and what lessons they have to share from personal practices. Alan Litchman and Lara Trust, both co-president and owner of Finagle-a-Bagel located in New England, share their strategies they used to manage their working capital along with some of their experiences.
Litchman begins sharing the first thing you, as a business owner, need to really understand, which is banking relationships. Owners have to start with a good bank, and then they can really understand how to model their business plan. Other advice he gives is as an owner at the beginning, you must understand that you will take on debt. Also, understand that location is vital when you are selling any type of product or service, and you have to know your customers and what they will buy so the cash flow will allow the business to service any debt. Understanding what the time frame is for the amount of debt that the business will take on is another pointer they share in the video along with understanding the payback schedule. Other helpful pointers they have for future business owners is to decide what it is going to cost you to borrow money, know what the opportunity cost of using your own money that might be in the stock market when you are putting it into a business. These are decisions that a business owner will need to make frequently.
Trust and Lithchman continues and shares their point of view on long term and short term goals and their experience with the recession. Litchman mentions that in small business you never have any monies, but you know in the long term it is better to own things. The owners of FAB explains how they knew by owning real estate instead of renting in New England where real estate is scarce, benefitted them, because if the owners have a problem they have equity. In...