Blog   Tagged ‘small business owners’

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 financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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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 financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Financial Words of the Week (Small Business Month): Recurring Revenue

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FWOTW

As we enter 2015, many business owners will be looking for ways to find to keep making money in their industry.  Recurring revenue is the segment of a company’s profits expected to return the next year. It does not include one-time payments from customers. Predictability and stability of revenue is key and is often a challenge for business owners. If you can move from a 0 percent recurring revenue model to one of 10 percent, you will dramatically increase the value of your organization.

Examples of recurring revenue are monthly service contracts and subscriptions. As a business owner, how can you overcome the challenge of having customers who are hesitant to commit to long-term arrangements, but showing them the value in these contracts? Think proactively instead of reactively when it comes to products or services you can offer. The more proactive, the more value consumers can see.

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Scarred by Great Recession, small business owners are still playing it safe

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SmallBusinessOwners

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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