Friday, May 30, 2008

CAPITAL EQUIPMENT CAN MAKE THE DIFFERENCE BETWEEN "YES" OR "NO"

Make a capital equipment list and keep it up to date. Capital equipment is depreciable items that the business will use up over a period of year or more. Maintaining an updated capital equipment list is useful for insurance as well as tax and inventory purposes, and can make the difference between a “yes” and a “no” on a credit application. Banks and other funding source (trade, SBA, investors) look to collateral as a comfort factor. If you can provide a clean, up-to-date capital equipment list to substantiate your collateral claims, it gives these people a warm, friendly feeling about your business.

Use your cash-flow budget to carefully manage your cash. There are only four sources of cash: net from operations, new debt, sale of fixed assets, and new investment. That’s it. No others allowed. Cash gushes out in innumerable ways, though many are really part of net from operations. In fact, the only dependable and lasting source is from operations. If net from operations continues to be negative, you can only sell off so many assets before you can’t continue to be in business. If it looks like it will be negative, new debt or new or new equity will be hard to come by; investors and bankers aren’t fools. Or won’t be for long.

It all comes down to cash from operations. The reason for a cash-flow budget is to control the outflow of cash, to make sure that the cash you do spend is used for business reasons that fit in with your business plan. The discipline involved here is tremendous: Operating expenses can be controlled. Profits are tied to operating expenses – “A penny saved is a penny earned” – in the most direct ways. You cannot place too much stress in maximizing operations net.

2 comments:

krishna kashyap av said...

This was really good and helpful too. I learnt a lot..Thanks for the post..
Forex Bookmark

Erica Smith said...

Dear,
I want to make 1 guest post in your site, if you permit me. The post contains 350 words above and it is totally unique as it is written by my content writers.

Please contact me at ericasmith568(at)gmail.com soon. Moreover, I will place your link in one of my finance sites.

regards,
Erica Smith

Adverse Credit Remortgage, 100 home equity loan, adverse remortgage, student loan consolidation program, uk homeowner loans, refinance with bad credit, egg credit, refinance with poor credit, employee leasing, loan consolidation, buyer mortgage note, federal loan consolidation, refinancing with poor credit, home equity loan, mortgage rates refinancing, home equity loans, home equity loan rates, homeowner loans, business owner loans, equity loan rates, federal consolidation loan, equity loan, refinancing with bad credit, home equity line of credit rates, refinance poor credit, secured loans, lawyer tax, home loans refinancing, tax attorney, refinancing my home, line of credit home equity, debtfreedirect, refinance comparison, refinancing rates, debt cosolidation, refinancing equity loans, commercial credit counseling, line of credit rates, american relief tax, litigation finance, low interest refinancing, loan settlement, Financing Business, Business Plans, Refinancing Business.