Blog   Tagged ‘opportunities’

Financial Words of the Week (Small Business Month): Working Capital

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FWOTW

Working capital is a financial measure of cash that is calculated as Current Assets divided by Current Liabilities. Working capital is a common measure of a company’s liquidity. Current assets are your company’s most liquid assets, such as cash and other items that could be quickly turned to cash.  Current liabilities are obligations that are due within a year.  A positive working capital usually indicates that the company is able to pay off its short-term liabilities quickly.

Current assets and current liabilities include four areas that are critical for working capital management:

  • cash
  • inventory management
  • accounts payable – Remember to negotiate discounts with vendors and suppliers for a net 10 or 30-day payment.
  • accounts receivable – With money your clients owe you, consider ways to speed up payment that will impact your working capital.
    • Communication – when do you follow up on past-due items? Could you make a 10-day courtesy call? Do you have standard collection practices based on the size of your clients?
    • Eliminate any manual processes within your organization to prevent delays.
    • Shorten payment terms, and potentially provide a discount for paying promptly.
    • Email invoices and allow for Electronic Funds Transfer (EFT) payment.

Consider these ways to positively impact on your working capital and the strength of your business.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Financial Words of the Week (Small Business Month): SWOT Analysis

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FWOTW

Now that we’ve entered Q3, it’s 2015 planning time for small business owners. What better way to plan than by returning to the method you probably learned in business school: a SWOT analysis? SWOT stands for strengths, weaknesses, opportunities and threats. This analysis will lead to better awareness of your organization and insight into areas of growth, especially heading into a new year.

Strengths and Weaknesses

This should be an internal review. What are you doing well that is separating you from your competition (talent, product, process, etc)?  Understanding your company’s weaknesses is just as important and sometimes difficult to discover. Think of objections you might get during the sales process.  Keep your strengths in mind as you review your business as you might be able to leverage them to offset a weakness in your organization.

Opportunities and Threats

Many businesses are great at evaluating internally, but are challenged to look externally. Looking beyond your direct competition is important. How could government, technology, talent allow for an opportunity for growth in your market?

SWOT

Once the analysis is complete, ask for feedback from your senior leaders.  Develop a plan that will allow you to minimize your threats and capitalize on your opportunities.  Assign owners to these projects and take your business to the next level.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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